John C. Groth

Liquidity, exchange listing, and common stock performance

Abstract The liquidity of securities—the relationship between volume of trading and changes in market price—has won increasing recognition as an element of investment strategy in recent years. Relatively high liquidity is deemed to be a desirable characteristic of a stock, especially for the institutional investor, who typically trades in large volume. Thus, firms can generally be expected to seek means of enhancing the liquidity of their shares. One of the supposed means of accomplishing this is by listing ones stock on a national securities exchange. This paper examines the relationship of common stock liquidity to both exchange listing and price behavior during major up and down movements in the market. Our conceptual and empirical analyses indicate that liquidity is linked to price behavior; and we suggest that the view held by at least some corporate officers—that exchange listing increases liquidity—may be erroneous. More specifically, it appears that when the amount of firm capitalization is taken into account, exchange listing does not result in greater stock liquidity.

Service quality: perceived value, expectations, shortfalls, and bonuses

Focuses on the perceived value of a service by a customer, the perceived quality and value of a service, and the role of expectations, shortfalls, and bonuses in the valuation process. Considers on the implications of key relationships in the marketing and delivery of services. Characterizes customer perception of the perceived value of a service and quality of service in multivariate space. This model yields a value vector that summarizes the perceived value of a service and service quality to a customer. The perceived value vector summarizes the aggregate effects of variables of influence on perceived value. Relates service delivery to customer expectations. In this context, illuminates important issues related to exante versus ex post expectations. Introduces the concept of expectations‐delivery variance (EDV). Examines the concept of delivery shortfalls as well as delivery excess, with excess leading to bonus fulfillment. Shortfalls and bonuses have residual effects. Asserts that shortfalls and bonus effects have asymmetric affects in terms of residual influence on future perceptions of customer expectations of service value.

The Exclusive Value Principle – A Concept for Marketing

Codifies a unique marketing and valuation principle: the exclusive value principle (EVP). This principle relates value creation to “psychic space”. Psychic needs can create enormous margins and other benefits. One can influence price/demand as well a create, stimulate, or help define a need for a customer. Attractive margins result from psychic needs as opposed to pure utility fulfilment. Focuses on psychic needs and relationships to price, margins, risk, value. Provides an overview of psychic dimensions and a multidimensional characterization of utility‐psychic space. Principles and perspectives offered are useful in identifying evaluating, targeting and focussing marketing strategy, plans and in product/service design and delivery of customer needs. Recognition of special factors related to psychological dimensions are critical in matching products and services to needs and are fundamental to delivering products and services in the exclusive value category that offer unusual opportunities for profit. Re...

Service quality: guidelines for marketers

In this second paper in the series, the authors focus on special factors related to the perceived value of service and service quality. The article examines issues in the application of the concepts introduced in the first paper. A bank services scenario illustrates the concepts and guidelines for application useful to the marketing professional seeking to enhance quality of service. The conceptual relationships and fresh ideas touch on an array of topics including factors such as: critical factors, utility and psychic influences and perceived value; needs‐match uncertainty and needs‐match variance; perceptions‐reality divergence and perceptions‐reality variance; and service quality variance, service risk and quality risk. The paper provides a scenario to illustrate the application of a number of the concepts. It is rich with ideas and relationships which provide stimuli and seeds for future research. An appendix provides an excellent review of concepts and terms.

What Blocks Creativity? A Managerial Perspective

Barriers and inhibitors block creativity and suppress or drive into hiding the creative talents of individuals and limit or destroy “creative willingness.” The paper reports on perceived blocks to creativity based on “face to face” input from over 1700 people, 67 groups, over a ten-year period.

Cost Management and Value Creation

The value of a company is a function of many variables. Costs are of special importance since managers can influence costs. Success at cost management has a phenomenal effect on value because of the relationships between costs, business risk, financial risk, and valuation. These relationships are non‐linear. Consequently, success in cost management yields amplified benefits in terms of value creation. In a counter sense, shortcomings in cost management result in an intensified eradication of value. Last, improved profits derived from cost management are “higher quality” increments to profits. Interestingly, the same non‐linear phenomenon holds: an increment to profits that results from costs management will have a greater addition to company value than an equal increment in profits that results from higher sales or higher sales price per unit. These reasons attest to the importance of attention to costs in value creation. Focuses on benefits of cost management in terms of: the reduction of business risk; ...

Capital structure: perspectives for managers

Understanding capital structure and its practical implications is important to the professional manager regardless of functional area of expertise. The seminal work in the area of capital structure earned the researchers Nobel Prizes. In subsequent years, researchers have provided much additional and very important work on capital structure theory. Decodes capital structure theory and its implications in a manner useful to the practitioner. Explains the conceptual issues, consequences, and implications. Managers face an uncertain world that does not co‐operate with many of the assumptions of theory. Suggests practical strategies for applying capital structure theory to increase firm value. Relates the attendant choices and management of capital structure to the value generation cycle of the company. Includes a section on the important issues in capital structure for companies in emerging and transition economies.

Critical Factors in Exploiting Technologies

Technology offers great opportunities to firms. Successfully bringing the benefits of technology to market and realizing favourable returns requires a careful balance and management of a host of factors. The critical test of such efforts occur where and when technology “meets the market”, resources and great efforts will yield returns only if one meets the market. Focuses on push versus pull marketing forces and their importance in technology assessment, policy, strategy, and the management of efforts to exploit technology successfully. It defines characteristics of push versus pull forces, addresses the importance of economic, social, political and technical forces, and discusses factors of importance to the marketing analyst and strategist. It provides force assessment guidelines and an evaluation and scoring worksheet to evaluate and summarize factors that will determine the success or failure of a technology based effort. In addition, this assessment scheme is useful in a variety of other situations a...

Capital, economic returns and the creation of value

Focuses on sources of capital to an organization, investment and flows of capital within an organization, interaction with markets, the generation of economic returns, and the potential for the creation of value. Illustrates how the creation of value provides benefits to employees, shareholders, and society. Provides numerical illustration of the dollar value of a capital project to employees, shareholders and separately to society. Provides the foundation for understanding concepts such as economic value added, a practical understanding of how economics works, especially in terms of allocation of capital, invested capital, flowing capital, and returns on capital. Traces the creation of value to the markets for goods and services.

Assessing the Risks New Products Face

OVERVIEW:New products that mesh with their external environment have a better chance of succeeding than those that do not. Companies that assess the external environment for potential new products effectively are more likely to market commercial winners than firms performing this activity ineffectively. Unfortunately, R&D programs often fail to recognize the importance of the external environment. Consequently, the authors provide a framework for companies to use to develop external environmental profiles for their new product candidates. Operational guidelines for developing these profiles are included, and recommendations as to how companies should scan their external environments are offered.