Journal of Marketing 74(5): 1-17 Abstract Many firms are now using referral marketing campaigns to harness the power of word of mouth and to increase referrals to acquire new customers. Prior research has identified a method of computing the value of referrals using only a customer's actual past referral behavior to compute customer referral value (CRV). In this article, the authors develop and test a new four-step approach to compute CRV. In addition, they determine the behavioral drivers of CRV and then identify the most effective methods of targeting the most promising customers on the basis of their customer lifetime value (CLV) and CRV scores. The authors illustrate and test this approach through four separate field experiments with firms from two industries: financial services and retailing. They find that to maximize profitability, it is critical to manage customers in terms of both their CLV and CRV scores and that understanding the behavioral drivers of CRV can help managers better target the most profitable customers with their referral marketing campaigns.

The Sustainability Liability: Potential Negative Effects of Ethicality on Product Preference

(2010-08-16)

Journal of Marketing 74(5): 18-31 Abstract Manufacturers are increasingly producing and promoting sustainable products (i.e., products that have a positive social and/or environmental impact). However, relatively little is known about how product sustainability affects consumers' preferences. The authors propose that sustainability may not always be an asset, even if most consumers care about social and environmental issues. The degree to which sustainability enhances preference depends on the type of benefit consumers most value for the product category in question. In this research, the authors demonstrate that consumers associate higher product ethicality with gentleness-related attributes and lower product ethicality with strength-related attributes. As a consequence of these associations, the positive effect of product sustainability on consumer preferences is reduced when strength-related attributes are valued, sometimes even resulting in preferences for less sustainable product alternatives (i.e., the sustainability liability). Conversely, when gentleness-related attributes are valued, sustainability enhances preference. In addition, the authors show that the potential negative impact of sustainability on product preferences can be attenuated using explicit cues about product strength.

Managing Distributors' Changing Motivations over the Course of a Joint Sales Program

(2010-08-16)

Journal of Marketing 74(5): 32-47 Abstract Ensuring joint program participation by distributors is essential to channel management. Although studies confirm that firms can promote distributor participation by attending to their participation motivations, the authors argue that distributors may change their motivations over the course of a joint program, driven by an increase of program-related information and how their peer distributors behave. Drawing insights from the information asymmetry literature, the authors postulate that distributors' ex ante commitment is driven by their motivation to avoid losses, and after they participate, their ex post adaptation reflects rent-seeking motivations. This study also examines how the participation of peer distributors operates as an information signal that moderates the motivation-participation link for the focal distributor. In the context of an actual sales program, this study confirms the postulate of motivation shift and the salience of network-based information in distributors' program participation. The results show that a manufacturer needs to manage its distributors' participation in a discriminant, process-oriented, and system-sensitive manner by addressing the latter's diverse motivations, changing goals in the joint program, and influences from peer distributors.

The Stopping Power of Advertising: Measures and Effects of Visual Complexity

(2010-08-16)

Journal of Marketing 74(5): 48-60 Abstract Advertising needs to capture consumers' attention in likable ways, and the visual complexity of advertising plays a central role in this regard. Yet ideas about visual complexity effects conflict, and objective measures of complexity are rare. The authors distinguish two types of visual complexity, differentiate them from the difficulty of comprehending advertising, and propose objective measures for each. Advertisements are visually complex when they contain dense perceptual features (feature complexity) and/or when they have an elaborate creative design (design complexity). An analysis of 249 advertisements that were tested with eye-tracking shows that, as the authors hypothesize, feature complexity hurts attention to the brand and attitude toward the ad, whereas design complexity helps attention to both the pictorial and the advertisement as a whole, its comprehensibility, and attitude toward the ad. This is important because design complexity is under direct control of the advertiser. The proposed measures can be readily adopted to assess the visual complexity of advertising, and the findings can be used to improve the stopping power of advertisements.

The Diffusion of Market Orientation Throughout the Organization: A Social Learning Theory Perspective

(2010-08-16)

Journal of Marketing 74(5): 61-79 Abstract This study examines the diffusion of market orientation (MO) as a social learning process to acquire and transfer individual-level MO. Central to the diffusion are important work-group members, or envoys. Through their market-oriented action, top managers serve as market-oriented role models to two important types of observers in work groups--formal middle managers and work-group expert peers. In turn, these observers become top managers' envoys and role models of market-oriented behavior to frontline employees. Empirical results from a three-level data set from a Fortune 500 company support this perspective. While envoys who are neither market oriented nor identified with the firm are the least effective, envoys who are not market oriented but are strongly identified with the firm are also detrimental. Network size hinders the informal route of learning through expert peers but not the formal route through middle managers. By identifying who the important work-group envoys are and under what conditions certain envoys are likely to be most effective, this study helps managers select the best envoys to implement MO.

Sales, Marketing, and Research-and-Development Cooperation Across New Product Development Stages: Implications for Success

(2010-08-16)

Journal of Marketing 74(5): 80-92 Abstract Prior research has identified the integration of marketing with research and development (R&D) as a key success factor for new product development (NPD). However, prior work has not distinguished the sales and marketing functions, even though they are distinctive departments within an organization. Therefore, the authors extend prior research and examine the effect of cross-functional cooperation among sales, marketing, and R&D on NPD performance across multiple stages of the NPD process. The authors use multiple-informant data from 424 sales, marketing, and R&D managers as well as project leaders of 106 NPD projects to test several hypotheses. The results show that the cooperation between sales and R&D and between sales and marketing has a significant, positive effect on overall NPD project performance beyond marketing-R&D cooperation. The authors also find that the effect of cross-functional cooperation among sales, marketing, and R&D on overall NPD project performance varies across stages of the NPD process. More specifically, the authors find that sales-R&D cooperation in the concept and product development stages is critical for greater new product success. Sales-marketing cooperation is important in the concept development stage but has surprisingly less impact in the implementation stage.

How Salary Receipt Affects Consumers' Regulatory Motivations and Product Preferences

(2010-08-16)

Journal of Marketing 74(5): 93-103 Abstract In this article, the authors find that consumers' preferences change as a function of their temporal distance from the receipt of their last salary. The authors propose and test that when consumers have just received their salary (the near-salary condition), they exhibit promotion motivations in their product preferences. However, they exhibit prevention motivations in their product preferences when significant time has elapsed since their last salary receipt (the far-from-salary condition). The authors collected data from two longitudinal studies to validate these findings and to test the underlying process. Using actual purchase behavior and collecting product preference during a one-month period, the authors show that consumers' product preferences change in response to temporal distance from their last salary receipt. The findings suggest to managers that the best time to promote products or messages with a promotion appeal is near to consumers' last salary receipt and that the best time to promote products or messages with a prevention appeal is far from consumers' last salary receipt.

Why Do Older Consumers Buy Older Brands? The Role of Attachment and Declining Innovativeness

(2010-08-16)

Journal of Marketing 74(5): 104-121 Abstract The authors compare three mechanisms that may explain why older consumers tend to prefer older brands. Data are from the French perfume market, in which some market leaders are decades old while hundreds of new entrants launch yearly. The authors reveal monotonically increasing differences across age ranges. Younger consumers have a greater propensity to change their preferred brand, a form of innovativeness that benefits relatively recent entrants, whereas older consumers exhibit a propensity to remain attached for a longer duration to the same preferred brand. Nostalgia for options encountered during an early formative period has only a limited impact. Furthermore, strong heterogeneity emerges: At all ages, some consumers frequently change their preferred brand, whereas others remain attached to it for long periods. It is the proportion of these two behaviors that varies across age ranges. The resultant managerial implications indicate that mature consumers are attractive targets because they likely remain attached to a brand longer, that long-established products may still attract new consumers, and that the success of a new brand among young consumers may be ephemeral.