Junhong Min

Choosing the sure gain and the sure loss: uncertainty avoidance and the reflection effect

Purpose – The paper aims to investigate the role of uncertainty avoidance (UA) as a moderator of Prospect Theory’s reflection effect (i.e. the simultaneous choice of a sure gain and a risky loss). We expect that higher-UA consumers, seeking certainty, will shun risk across both gains and losses such that their choices will be inconsistent with the reflection effect. Design/methodology/approach – We report three studies in which participants choose between risk and certainty. We use the stimuli from the original Prospect Theory paper, measure UA using an individual-level scale and conduct controlled experimental (laboratory) studies. Findings – We show that, compared to lower-UA consumers, higher-UA consumers demonstrate the reflection effect less frequently in a variety of settings (small/large stakes and within/between subjects comparisons). Mediation tests reveal that higher-UA consumers anchor on the sure loss and stay with their choice because they prefer the certainty of the sure (smaller) loss to th...

Unusual Product Differentiation: Strategic Use of Trivial Attribute and the Separate Evaluation Mode

Perhaps the most important factor for new product success is to create the product differentiation that provides customers with superior values better than the competitors in the same industry. Not surprisingly, more than 50 % of annual sales in consumer product industries including automobiles, biotechnology, computer software, and pharmaceuticals are attributed to the inclusion of important, noble, or innovative attributes. In marketing, however, little has been studied the relationship between product differentiation created by trivial attributes (e.g., Coca-Cola’s “S” shape bottle, a crystal shape of Folgers’ instant coffee, and Pantene shampoo with vitamins ingredient) and consumer preference. From the managerial perspective, it is very important for firms to properly communicate with the consumers who are uncertain of the true value of the trivial attributes.

Governance Strategy for the Social Relationships Between Alumni and Their Alma Mater

Although prior studies in relationship marketing have greatly enhanced our understanding of alumni-university relationships, there has been considerably little empirical investigation of three managerial problems. The first problem is that while the economic benefits (e.g., profits or costs) of conventional business relationships receive much research attention, the noneconomic benefits or social benefits are not specifically studied (e.g., pride, enjoyment, networking, and friendship). The second problem is that we largely do not know the specific mechanism about how the social benefits created by a university can be converted into the resources that the university wants to obtain. For example, a university may want to know how the alumni homecoming event, the most popular alumni program offered by many universities, will result in alumni participation or monetary support. The last problem is that alumni can easily exit the relationship with their former university whenever the costs required to remain in the relationship with the university are greater than the benefits.

A Study of Understanding When Technology Attributes Can Increase Preference

Technology is one of the most effective marketing strategies for providing companies with sustainable growth and increasing the profitability by differentiating products and services. For example, optical disc technology has successfully differentiated the Blue-Ray DVD market without cannibalizing the traditional DVD market. Recent innovations in 3D technology have rapidly expanded its application areas from movie theaters to computers, HD television, and recently to a projector product category. These technology products are often highly innovative and offer great product differentiation.

Modularization as a Supplier Opportunism Safeguard in Knowledge Process Offshoring Relationships: Theory and Empirical Evidence

Buyers often procure products and services from suppliers in low cost countries like India and China. Such overseas procurement, or offshoring, offers significant direct cost savings vis-a-vis in-house production. Historically, offshoring was primarily confined to manufactured goods. However, in recent years, this practice has spread to the service sector as modern technology has made it possible for geographically dispersed buyers and sellers to interact in real time and exchange data. One area that has witnessed explosive growth is the Knowledge Process Offshoring (KPO) industry comprising services such as marketing and advertising research, financial and management consultancy, research and development, and business and technical analyses, among others. While the main rationale for offshoring knowledge based services centers on direct cost advantages, buyers also have to grapple with an unintended and adverse type of cost inefficiency engendered by supplier opportunism. For example, suppliers have an incentive to expropriate quasi rents by deliberately leaking knowledge based specific assets and diverting them to other clients. Such opportunistic actions expose buyers to significant hidden costs since conventional contractual safeguards breakdown due to information asymmetry, temporal and spatial separation, and vastly different institutional environments facing buyers and sellers. Hence, the overall attractiveness of KPO arrangements is contingent upon effective governance of supplier opportunism. This paper investigates some of the preceding issues by drawing upon Transaction Cost Theory perspectives to develop and empirically test a conceptual model about the antecedents and consequences of supplier opportunism in one KPO setting, i.e., marketing research services. Using an online survey methodology, data were collected from 215 current and future buyers in the market research industry. Results show that suppliers tackle knowledge appropriation hazards by deploying creative non contractual safeguards such as modularization and standardization. Such deterrents curb supplier opportunism and create substantial buyer efficiencies. The paper discusses several managerial and research implications, and outlines the scope for further research.