Roger A. Kerin

Exploring the brand value-shareholder value nexus for consumer goods companies

It is generally claimed that brand names are a corporate asset with an economic value that creates wealth for a firm’s shareholders. However, the scholarly literature has neither provided a comprehensive theoretical basis for this claim nor documented an empirical relationship between brand value and shareholder value. This exploratory study describes a rationale for, and documents, the statistical strength and functional form of a brand value-shareholder value relationship for publicly held consumer goods companies in the United States. A theoretical argument supportive of a positive relationship between a firm’s accumulated brand value and market-to-book (M/B) ratio was empirically validated. However, even though firms with higher accumulated brand values have higher M/B ratios, the functional form of the relationship was found to be concave with decreasing returns to scale. Theoretical and managerial implications of these findings are outlined, as well as study limitations and directions for future research.

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

Broadening the Scope of Reference Price Advertising Research: A Field Study of Consumer Shopping Involvement

The current understanding of reference pricing requires broadening to reflect contemporary advertising practices and shopping behavior. A content analysis of 13,594 newspaper retail advertisements reveals that it is uncommon for reference pricing to be used alone in advertisements: 87.2% of the advertisements featuring reference pricing also include limited-time availability (i.e., “Three days only!”) or sale announcements in the headline or copy. Using dual-process theories of persuasion as a conceptual framework, the authors conduct three field experiments that compare the conditions under which the use of limited-time availability and sale announcements in advertisements that feature reference prices affects consumer price perceptions and store shopping intentions. The findings yield three insights for reference price advertising. First, reference pricing results in favorable price perceptions and store shopping intentions only when consumers are shopping for a product. Second, when consumers are shopping for a product, reference pricing paired with limited-time availability results in more favorable price perceptions and store shopping intentions than the use of either technique alone. Third, the use of sale announcements and limited-time availability in reference price advertisements has a favorable effect on price perceptions and store shopping intentions when consumers are not shopping for a product.

The Effects of Brand Name Similarity on Brand Source Confusion: Implications for Trademark Infringement

The prevalent legal view with regard to trademark infringement is that consumers who exercise a low (high) degree of care when evaluating goods will be less (more) likely to notice differences among brands and thus conclude they are of (dis)similar origin. The authors argue on the basis of the involvement literature and demonstrate through two field experiments that the effect of degree of care on likelihood of brand source confusion varies by the type of similarity (similar sound versus similar meaning) among brand names. The authors discuss implications for trademark infringement litigation and company brand name evaluation in light of these findings.

Product hierarchy and brand strategy influences on the order of entry effect for consumer packaged goods

Manufacturers focus on becoming more agile, software firms deploy rapid application development tools—everyone is in a hurry. Although we all understand the benefits of being first to market, we understand just as clearly that not all first-to-market products enjoy the same, sustainable benefits from being market pioneers. Why do some pioneering products experience a more significant order-of-entry effect than others? Roger A. Kerin, Gurumurthy Kalyanaram, and Daniel J. Howard examine two factors—product hierarchy and brand strategy—which may influence the magnitude of this effect for new consumer packaged goods. First, they hypothesize that pioneering a new product class offers a greater advantage than introducing a new form to an existing product class. Second, they predict that the order-of-entry effect will be greater for brand extensions than for entirely new brands. Finally, considering both product hierarchy and brand strategy, they expect that the order-of-entry advantage for brand extensions over new brands will be significantly greater within new product classes than for new forms of existing products. These hypotheses are tested using data from the Information Resources, Inc. Behaviorscan® data set. Collected from 2,500 household panel members, 75 supermarkets, and 25 drugstores, this database contains weekly measures of brand trial penetration as well as brand distribution, price, and promotion information in eight geographic markets from the period 1983–1988. The models developed in this study explore the relationships among brand trial penetration, product hierarchy, brand strategy, order of entry, lag time between successive brand entrants, and marketing mix variables (i.e., price, promotion, distribution, and advertising). The study strongly supports all three hypotheses. In particular, the analysis clearly demonstrates that the order-of-entry effect is greatest for a new product class pioneered by a brand extension. Order of entry has the least effect on a new product form pioneered by an entirely new brand. For a company seeking a competitive advantage from being first to market, innovation in product function offers greater potential benefit than innovation in product form. Such a company can also benefit from building on the name and reputation of its established brands. Although the study finds these order-of-entry effects significant, the effects of marketing mix variables such as product price and promotion are consistently stronger.

DECISION-MAKING STYLE AND ACQUISITION OF INFORMATION: FURTHER EXPLORATION OF THE MYERS-BRIGGS TYPE INDICATOR

This study examined whether the Myers-Briggs Type Indicator Thinking-Feeling Scale, which measures the preferred method of judging, is useful in explaining preference for different types of information among intuitive perceivers. Data from 40 graduates indicated that intuitive thinking types and feeling types do differ in their information preference with the principal difference being that thinking types prefer more objective, quantitative data than feeling types.

Measurement and tracking of brand equity in the global marketplace ‐ The PepsiCo experience

The conceptualization and measurement of brand equity, including its sources and outcomes, are a challenging task, particularly in a global marketplace. This paper briefly describes how PepsiCo, Inc. conceptualizes and measures brand equity across brands, countries, and over time. Special attention is given to the EquitrakTM brand equity model developed by PepsiCo, Inc. and the global brand equity tracking methodology employed by the company in 14 countries. The paper concludes with managerial insights obtained from this effort.

Impact of product life cycle stages on barriers to entry

This study focuses on the importance of barriers to entry in five industries and examines the impact of industry and product life cycle stages on barriers to entry. The importance of 25 barriers is measured and tested empirically. The barriers are also factor analyzed and the resulting factor scores are compared among the different industries and different stages of the product life cycle. The results show that statistically significant differences in the importance of barriers are present among the industries and product life cycle stages.

Reference price and scarcity appeals and the use of multiple influence strategies in retail newspaper advertising

The use of scarcity and reference price techniques in 13,594 retail newspaper display advertisements across four major U.S. cities was evaluated in terms of frequency and usage strategies using framing and information‐processing perspectives. One or both of these techniques were found in 22.4% of the ads. Scarcity was used more frequently than reference pricing, and was strongly associated with the use of reference pricing. Limited time availability was found to dominate the use of scarcity tactics. Scarcity and reference pricing were also strongly associated with the use of other attention and persuasion tactics, such as color ads, larger ads, and “Sale” announcements. Given the extensive use of reference pricing and scarcity appeals, their association with each other, and their further association with other commonly recognized advertising tactics, additional research on the use of multiple influence strategies appears warranted. The authors thank Tiffani Oltmanns and Daniel Taraba for their assistance with this project.

The Influence of Social Stratification and Age on Occupational Aspirations of Adolescents

AbstractThis study examines children’s awareness of socially prominent occupations and educational motivation to enter these occupations successfully. Four separate groups of students were analyzed to determine variations in the occupational/educational aspirations: (1) low socioeconomic third graders; (2) high socioeconomic third graders; (3) low socioeconomic eighth graders; and (4) high socioeconomic eighth graders. It was concluded that children form occupational predispositions at a very early age. The study indicates that children from a higher socioeconomic stratum had higher educational goals and the desire to obtain prestige occupations, while lower socioeconomic students had resigned themselves to less education and lower job status.