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Madhu mithafpm02005Strategic MarketingManaging market relationshipsRelationship spectrum
Building market relationships- Canada Pacific HotelsFirst, they changed their orientation from processing group needs to catering to individual requirements Second, they invested in relation-specific knowledge and skills, which were embedded in their databases, routines, and procedures Third, they realigned the organization around team-based processes that cut across functions.
Elements of market relating capabilityOrientation: A relationship orientation pervades all parts of the organization's mind-set, values, and norms and thus influences all interactions with the customer--before, during, and after the sale.Eg- medical equipment firmsKnowledge and Skills: Assimilated employee experience, Databases and transaction files, Management systems and routinesIntegration and Alignment of ProcessesEg: United States Automobile Association
The Role of Firm Resources in Returns to Market DeploymentIntroductionResource possession view: focusing on those resources that create and sustain competitive advantage Market deployment- degree of action directed towards managing organizational resources in the workplaceEg- advertising, distribution and promotionObjective- Moderating effect of firm resources on the deployment-performance relationship
Direct Effects of Firm Resources and Market Deployment on Performance Resource-based view of the firm emphasizes that a key source of competitive advantage is by firm-specific, difficult-to-imitate resources Market deployment significantly influences performanceModerating Role of Firm Resources on Returns to Market Deployment Market deployment depends on type and level of resources thus resources play a moderating role in the deployment, performance relationshipNull effect- deployment gives same marginal return regardless of resourcesPositive moderating effect- firms with higher level of resources attain greater returns from market deploymentH1: The level of intangible marketing resources has a positive effect on returns to market deployment, with diminishing marginal returns.H2: The level of intangible technological resources has a positive effect on returns to market deployment, with diminishing marginal returns Negative moderating effect- firms with lower level of resources attain greater returns from market deploymentH3: The level of financial resources has a negative effect on returns to market deployment, with diminishing marginal returns.
Methodolgy- Data sourcesEffects of market deployment on performance- weekly scanner data from AC NielsenModerating role of accumulated resources- resource measures annually for 1997 and 1998 from multiple sources, including Compustat, Corporate Affiliations Plus, and the U.S. Patent and Trademark database
Measures of market deploymentMarket deployment: two levels- distribution action and coupon activityDistribution action- the breadth and depth of a brand's distribution coverage Coupon activity - the degree of coupon intensity for a brand over timethe total coupon circulation multiplied by the effective face value of the coupons
Measure of resourcesintangible marketing resources - overall score of brand equity using four factors: the number of a brand's line extensions, share of category requirements, price premium, and intangible valueintangible technological resources- composite index derived from patent citations and patent depreciation financial resources- level of liquid assets accumulated by a firmResultsIntangible marketing resources exhibit positive, diminishing marginal effects on returns to distribution-related market deployment and on returns to coupon-related market deployment, which is consistent with H1 Level of accumulated intangible technological resources has a positive, diminishing marginal effect on returns to distribution; effects for returns to coupon-related market deployment however is insignificantLevel of financial resources has a negative, diminishing marginal effect on returns to distribution-related and coupon-related market deployment
investigates if the firms channel expansions influence firm valueFirm value creation through major channel expansions: evidence from an event study in the United States, Germany and china-Channel ExpansionsChannel- A set of internal and external channel entities that facilitate the movement of goods and services from point of production to point of sale of customers.Each channel has its own process through which customers can select and purchase goods with specific levels of services and convenience.Channel expansion occurs in 2 ways:Increase in distribution intensityEstablishment of new channel
Channel ExpansionsIncrease in distribution intensity- expansion of number of channel entities within an existing channel eg: wholesales, retailersEstablishment of new channel- addition of a new channel to the firms existing channel systemFirm valueFirm value is measured by abnormal stock returns, i.e changes in a firms market value in response to channel expansion
Firm value can be perceived from 2 sides,Supply side ( firm)Demand side ( customers)
Supply side mechanismsDemand side mechanismsChannel expansionsEnlarge a firms market coverage by targeting additional customer segments or geographical regions.Add to the level and variety of channel functions a firm provides to its customers
Methodology- Event study of 240 announcements of Chinese, U.S and German firms from 2000 to 2010
Conceptual framework
ResultsChannel expansions affect firm value. Establishment of new channel positively influences firm value. Increase in distribution intensity positively influences firm value in firms with high market share and negatively influences firm value in turbulent conditions.Thank you
