Torsten Bornemann

Psychological Distance and the Dual Role of Price

When evaluating a product, consumers may interpret price information as either an indicator of quality or an indicator of monetary sacrifice. On the basis of construal level theory, we propose that psychological distance alters the weight consumers attach to these opposing roles of price. Four experiments show (1) that from both a temporally and a socially distant perspective, the price-perceived quality relationship is more pronounced; (2) that from a temporally proximal perspective, the price-perceived sacrifice relationship is more pronounced; (3) that these effects stem from differences in the way consumers mentally construe price information; and (4) that when people initially use price to judge a product for distant future consumption, it receives less attention as an indicator of sacrifice in a later evaluation for near future consumption. These findings have implications for prelaunch communication activities and preference elicitation methods such as conjoint analysis.

The Role of Chief Marketing Officers for Venture Capital Funding: Endowing New Ventures with Marketing Legitimacy

Research on new ventures has indicated that poorly conducted marketing is among the main reasons for new venture failure. To acquire urgently needed initial funding, new ventures strive to conform to investors’ expectations of appropriate marketing capabilities because these capabilities may endow them with legitimacy in the eyes of potential investors. Drawing on organizational legitimacy and human resource theory, the authors argue that the characteristics of the chief marketing officer (CMO) may endow new ventures with marketing legitimacy. Employing a two-stage selection hazard rate analysis to simultaneously account for potential selection bias and right-censored observations, the authors analyze a comprehensive data set of 2,945 high-technology new ventures. Bearing in mind that this research is a first exploratory attempt to illuminate the role of marketing for new venture funding using correlational secondary data, the results indicate that CMO education, marketing experience, and industry experience are positively related to the likelihood of funding. Moreover, the relationships between CMO characteristics and funding are contingent on task-related uncertainty and industry legitimacy. These findings provide initial insights for entrepreneurs, venture capitalists, and public policy makers.

Customer response to interactional service experience: The role of interaction environment

The purpose of this paper is to examine causal attribution in interactional service experiences. The paper investigates how triggers in the environment of a customer-employee interaction influence customer behavioral response to employees’ negative and positive affect. Additionally, it studies the role of sympathy and authenticity as underlying mechanisms of this relationship.,Two scenario-based experimental designs (N1=162; N2=138) were used. Videotaped scenarios served as stimulus material for the manipulation of two focal variables: the employee’s emotional display as either negative or positive and the availability of an emotion trigger in the interaction environment to convey the attribution dimension of cause uncontrollability. The emotion trigger’s visibility was varied in the two studies. Customer response was captured by buying intentions.,Customer responses are more favorable for both positive and negative interactional experiences when customers have access to information on cause uncontrollability (i.e. notice triggers in the interaction environment). Analyses reveal that these effects stem from feelings of sympathy for negative experiences and authenticity for positive experiences.,This research supports the relevance of causal attribution research on interactional service experiences, which have high-profit impact. Moreover, the findings underline the importance of the experience of fact in service interactions and thereby provide a more nuanced view on the discussion of whether service providers should use impression management strategies to engender customer satisfaction even when this behavior is “faked.”

Gambled Price Discounts: A Remedy to the Negative Side Effects of Regular Price Discounts

In the context of price discounts, a special type of price promotion, in which savings depend on the outcome of a gamble and are thus uncertain, has recently achieved some popularity. The question arises as to whether such gambled price discounts (GPDs) incur the negative reference price effect—that is, a downward shift in customers’ internal reference price (IRP)—which is often associated with regular price discounts (RPDs). From several studies, including two longitudinal field experiments, the authors find that GPDs indeed alleviate the negative reference price effect: IRPs and actual repurchasing tend to be lower for RPDs than for GPDs and a no-discount control condition. Moreover, the authors explore the psychological underpinnings of these effects and show that the different consequences of GPDs versus RPDs on IRPs are more pronounced if information regarding product quality is limited. The authors demonstrate that findings are robust to variations of GPD discount levels and the probability of winning.

Over, out, but present: recalling former sponsorships

Purpose This research aims at developing and testing a conceptual model that shows the antecedents of the recall of a former sponsorship. Design/methodology/approach Primary (n=1,146) and secondary data from German professional soccer build the empirical base for this research. Multilevel logistic regression is used for data analysis. Findings Results show that retroactive interferences in the form of replacement sponsors for the same object reduce the recall of a former sponsorship, while the mere passage of time does not have a significant main effect. To counteract such forgetting, the empirical analysis shows that sponsor managers can influence recall of a former sponsorship positively after sponsorship termination by switching to a lower-level sponsorship for the same object or by engaging in subsequent sponsorships with other congruent objects in the same context. Research limitations/implications The focus on one type of sponsorship (sport sponsorship) in one country (Germany) is the main limitatio...

Which Dimensions of Product Design Drive Shareholder Value? The Role of Aesthetic, Ergonomic, and Symbolic Value

“Good design keeps the user happy, the manufacturer in the black, and the esthete unoffended.” This artistic creed of Raymond Loewy, creator of the famous Coca Cola bottle and founder of the industrial design movement, never went out of date (Artzybasheff 1949, p. 5). Quite the contrary, in times of convergence with regard to product functionality and performance, the appearance of a new product emerges as a potential source of competitive advantage and superior value. Astonishingly, only a few studies have attempted to empirically prove Loewy’s statement and to examine the contribution of product design to company performance. Moreover, these studies predominantly use accounting-based and/or subjective performance measures. Yet, the question whether ‘good’ design is also related to firm value still remains to be answered.

The Value Relevance of Chief Marketing Officers for the IPO of Startups

Acknowledging the importance of startups, recent research in marketing has turned to marketing-related determinants of startup success (e.g., Srinivasan, Lilien, and Rangaswamy 2008; Yli-Renko and Janakiraman 2008; Rao, Chandy, and Prabhu 2008). The acquisition of financial resources constitutes the biggest challenge for startups (Zimmerman and Zeitz 2002). The initial public offering [IPO] is a major source of funding for high-technology startups. An IPO is defined as a firm’s first stock offer at a public exchange. An important outcome of an IPO is IPO underpricing, defined as the spread between the per-share offer price and the closing price on the first day of trading. This difference is detrimental to an offering firm’s objective of generating funds, as it shows that the firm could have charged a higher offer price. IPO underpricing is averagely as high as 16% and considerably higher for (a) younger firms and (b) high-technology firms (Loughran and Ritter 2004).