Category Archives: Papers and Articles

  • Online Trust: A Stakeholder Perspective, Concepts, Implications, and Future Directions

    Shankar_Urban_Sultan_JSIS_2002

    by Venkatesh Shankar, Glen L. Urban, Fareena Sultan

    This article was published in Journal of Strategic Information Systems, 11 (2002), 325-344.

    Online trust is important in both business-to-business (B2B) and business-to-consumer (B2C) e-business.  Consumers and businesses, feeling the pressure of economic downturn and terrorism, increasingly look to buy from and do business with organizations with the most trusted Web sites and electronic networks.  Companies’ perception of online trust has steadily evolved from being a construct involving security and privacy issues on the Internet to a multidimensional, complex construct that includes reliability/credibility, emotional comfort and quality for multiple stakeholders such as employees, suppliers, distributors and regulators, in addition to customers.  Further, trust online spans the end-to-end aspects of e-business rather than being just based on the electronic storefront.  Based on a review of selected studies, we propose a stakeholder theory of trust, articulate a broad conceptual framework of online trust including its underlying elements, antecedents, and consequences, and propose some promising future research avenues in online trust.  This paper will help information systems professionals better understand the online trust perspectives of multiple stakeholders, the antecedents and consequences, thereby enabling them to build more trustworthy Web sites.

  • The Wireless Industry’s Killer ‘B’

    Shankar_ODriscoll_Reibstein_S+B_2003

    by Venkatesh Shankar, Tony O’Driscoll, and David Reibstein

    This article was published in Strategy+Business, 31 (Summer 2003), 68-77.

    We suggest a strategic approach and offer examples of firms successfully using m-business can provide an understanding how mobile technology will impact a firm’s business model and organization. An understanding of where monies are being spent in m-business in the industry as well as in complementary and competitive industries may be valuable as mobile technology’s core value proposition of anything, anywhere, anytime is hacking at the root of the industry-segmented mental model. The future opportunity for m-business truly lies in the cross-industry context rather than within the context of any given industry. Cultivation of the capability to recognize and act upon cross-industry value networks aimed at constantly enhancing customer value may the hallmark of successful firms in the wireless world. While firms need to grab the low-hanging fruits of wireless now, they also should look at changing the ways of doing business in the future mobile environment characterized by cross-industry coordinated value bundles for customers.

  • Online and Mobile Advertising: Current Scenario, Emerging Trends, and Future Directions

    Shankar_Hollinger_MSl_2007

    by Venkatesh Shankar and Marie Hollinger

    This article was published as MSI Report 07-206.

    Online advertising expenditures are growing rapidly and are expected to reach $37 billion in the U.S. by 2011. Mobile advertising or advertising delivered through mobile devices or media is also growing substantially. Advertisers need to better understand the different forms, formats, and media associated with online and mobile advertising, how such advertising influences consumer behavior, the different pricing models for such advertising, and how to formulate a strategy for effectively allocating their marketing dollars to different online advertising forms, formats and media. In this article, we address these issues. We provide an overview of the current scenario with regard to online and mobile advertising. We discuss the emerging trends in these areas and offer our view of the future directions.

  • The Advantages of Entry in the Growth Stage of the Product Life Cycle: An Empirical Analysis

    Shankar_Carpenter_Krishnamurthi_JMR_1999

    by Venkatesh Shankar, Gregory S. Carpenter, and Lakshman Krishnamurthi

    This article was published in Journal of Marketing Research, 36 (May 2009), 269-276.

    Empirical research on sequential brand entry shows market share advantages for pioneers arising from a direct impact of order or timing of entry on market share and indirect effects of order of entry on a brand’s market response.  Analyses demonstrating these effects implicitly assume that a brand’s diffusion and market response parameters are independent of the stage of the life cycle in which a brand enters.  In this paper, we examine how the stage of market life in which a brand enters affects its sales through brand growth and market response, after controlling for the order of entry effect and time-in-market.  We develop a dynamic brand sales model in which brand growth and market response parameters vary by stage of life cycle entry, i.e., by pioneers, growth-stage and mature-stage entrants.  We estimate the model using data on 29 brands from six pharmaceutical markets. Our results reveal advantages associated with entering during the growth stage.  Brands that enter in the growth stage of the product life cycle reach their asymptotic sales level faster than pioneers or mature-stage entrants, are not hurt by competitor diffusion, and enjoy a higher response to perceived product quality than pioneers and mature-stage entrants. We find that pioneers reach their asymptotic sales levels more slowly than later entrants, and pioneer’s sales, unlike later entrants’ sales, are hurt by competitor diffusion over time.  On the positive side for pioneers, buyers are most responsive to marketing spending by pioneers.  Mature-stage entrants are most disadvantaged; they grow more slowly than growth-stage entrants, have lower response to product quality than growth-stage entrants, and have the lowest response to marketing spending.  We outline the implications of these results.

  • Late Mover Advantage: How Innovative Late Entrants Outsell Pioneers

    Shankar_Carpenter_Krishnamurthi_JMR_1998

    by Venkatesh Shankar, Gregory S. Carpenter, and Lakshman Krishnamurthi

    This article was published in Journal of Marketing Research, 35 (February 1998), 54-70.

    Although pioneers outsell late movers in many markets, in some cases, innovative late entry has produced some remarkably successful brands that outsell pioneers.  The mechanisms through which innovative late movers outsell pioneers are unclear.  To identify these mechanisms, we develop a brand-level model in which brand sales are decomposed into trials and repeat purchases.  The model captures diffusion and marketing mix effects on brand trials and includes the differential impact of innovative and non-innovative competitors’ diffusion on these effects.  We develop hypotheses on how the diffusion and marketing mix parameters of the brands will differ by market entry strategy (pioneering, innovative late entry, and non-innovative late entry).  We test these hypotheses using data from 13 brands in two pharmaceutical product categories.  The results show that an innovative late mover can create a sustainable advantage by enjoying a higher market potential and a higher repeat purchase rate than either the pioneer or non-innovative late movers, by growing faster than the pioneer, by slowing the pioneer’s diffusion, and by reducing the pioneer’s marketing spending effectiveness.  Innovative late movers are asymmetrically advantaged in that their diffusion can hurt the sales of other brands, but their sales are not affected by competitors’ diffusion.  In contrast, non-innovative late movers face smaller potential markets, lower repeat rates and less marketing effectiveness compared to the pioneer.

  • An Empirical Analysis of Determinants of Retailer Pricing

    Shankar_Bolton_MS_2004

    by Venkatesh Shankar and Ruth N. Bolton

    This article was published in Marketing Science, 23 (Winter 2004), 28-49.

    This paper empirically investigates the determinants of retailers’ pricing decisions with a focus on competitor factors. We classify the different types of pricing strategies based on four underlying dimensions.  These dimensions are price consistency, price-promotion intensity, price-promotion coordination, and relative brand price.  We develop and estimate a simultaneous equation model of how each of the underlying dimensions of retailers’ pricing strategies is influenced by variables representing the market, chain, store, category, brand, customer and competition. Our empirical analysis is based on optical scanner data that describe 1364 brand-store combinations from six categories of consumer packaged goods in fiveU.S.markets over a two year time period. The four underlying pricing dimensions are statistically related to: (1) competitor price and deal frequency (competitor factors), (2) storability and necessity (category factors), (3) chain positioning and size (chain factors), (4) store size and assortment (store factors), (5) brand preference and advertising (brand factors), and (6) own price and deal elasticities (customer factors).  Competitor factors explain the most variance in retailer pricing strategy, followed by category and chain factors.  Only in the cases of price-promotion coordination and relative brand price, do category and chain factors explain much variance in retailer pricing.  Store, brand and customer factors capture an insignificant proportion of explained variance in retailer pricing. These findings are useful to retailers in profiling alternative pricing strategies.  They can also help manufacturers make informed decisions about the levels of marketing support spending for their brands that are appropriate for different retailers.  We outline the managerial implications based on the results.

  • Network Effects and Competition: An Empirical Analysis of the Video Game Industry

    Shankar_Bayus_SMJ_2003

    by Venkatesh Shankar and Barry L. Bayus

    This article was published in Strategic Management Journal, 24 (2003), 375-384.

    Building on the Resource-Based View of the firm, we advance the idea that a firm’s customer network can be a strategic asset. We suggest that network effects are a function of network size (i.e., installed customer base) and network strength (i.e., the marginal impact of a unit increase in network size on demand).  We empirically study these network effects in the 16-bit home video game industry in which the dominant competitors were Nintendo and Sega. In the spirit of the new empirical IO framework, we estimate a structural econometric model assuming the data are equilibrium outcomes of the best fitting non-cooperative game in price and advertising. After controlling for other effects, we find strong evidence that network effects are asymmetric between the competitors in the home video game industry. Specifically, we find that the firm with a smaller customer network (Nintendo) has higher network strength than the firm with the larger customer base (Sega).  Thus, our results provide a possible explanation for this situation in which the firm with a smaller customer network (Nintendo) was able to overtake the sales of a firm with a larger network size (Sega).

     

  • Mobile Marketing in the Retailing Environment: Current Insights and Future Research Avenues

    Shankar Venkatesh Hofacker Naik JIM 2010

    by Venkatesh Shankar, Alladi Venkatesh, Charles Hofacker, and Prasad Naik

    This article was published in the Journal of Interactive Marketing, 24 (2010), 111-120.

    Mobile marketing, which involves two- or multi-way communication and promotion of an offer between a firm and its customers using the mobile, a term that refers to the mobile medium, device, channel, or technology, is growing in importance in the retailing environment. It has the potential to change the paradigm of retailing from one based on consumers entering the retailing environment to retailers entering the consumer’s environment through anytime, anywhere mobile devices. We propose a conceptual framework that comprises three key entities, the consumer, the mobile, and the retailer. The framework addresses key related issues such as mobile consumer activities, mobile consumer segments, mobile adoption enablers and inhibitors, key mobile properties, key retailer mobile marketing activities and competition. We also address successful retailer mobile marketing strategies, identify the customer-related and organizational challenges on this topic, and outline future research scenarios and avenues related to these issues.

  • Innovations in Shopper Marketing: Current Insights and Future Research

    Shankar Inman Mantrala…JR 2011

    by Venkatesh Shankar, J. Jeffrey Inman, Murali Mantrala, Eileen Kelley, and Rozz Rizley

    This article was published in the Journal of Retailing, 87S (1, 2011), S29-S42.

    Shopper marketing refers to the planning and execution of all marketing activities that influence a shopper along, and beyond, the entire path-to-purchase, from the point at which the motivation to shop first emerges through to purchase, consumption, repurchase, and recommendation. The goal of shopper marketing is to enable a win-win-win solution for the shopper-retailer-manufacturer. Shopper marketing has emerged as a key managerial practice among manufacturers and retailers, who are eagerly embracing innovations in the different aspects of shopper marketing. We review current and potential innovations in shopper marketing. We identify the managerial challenges to achieving new win-win-win solutions among shoppers, manufacturers, and retailers in shopper marketing and outline future scenarios and research issues related to these challenges.

  • A Practical Guide to Combining Products and Services

    by Venkatesh Shankar, Leonard L. Berry, and Thomas Dotzel

    This article was published in the Harvard Business Review, November 2009.

    As companies look to the future, they will need to pay increasing attention to hybrid offerings (product and service bundles) if they want to increase their top and bottom lines. Hybrid offerings attract new customers and improve demand among existing customers by offering them superior value. They enable firms to broaden their customer base, boost their revenue and profit streams, and improve liquidity at low risk. Considering the rules of hybrid offerings can help executive identify successful hybrid offerings.