Although one of an organization's goals is to bond consumers to its brand, that bond can sometimes be tainted, say researchers from the Boston University School of Management in Massachusetts. Even worse, marketers are often unaware of the unfavorable connections even loyal customers have to their company, according to marketing professor Susan Fournier and doctoral student Claudio Alvarez.
They point to the first-time symphony ticket buyer who feels "stalked" by relentless phone calls for donations or a frequent flyer who feels mistreated by his chosen airline. In fact, Fournier and Alvarez find that consumers have negative relationships with brands more often than they do positive relationships— by about 55 percent to 45 percent, respectively.
The pair conducted two studies, involving participants in four countries, to study four dimensions of brand relationships: "positive/negative," "significant/ superficial," "equal/unequal power," and "deliberate/not under my control." In the process, they asked participants to describe their relationships to particular brands by assigning them to one of 27 different categories, such as "flings" and "broken engagements." They also could choose descriptions such as "addict to dealer," which might be apt for companies that sell cigarettes or alcohol, or "stalker to prey," which might summarize how they feel about credit card companies that lure consumers into charging purchases.
The researchers hold that managers must be aware of any negative brand relationships among their customers so that they can mitigate damage to their reputations— or avoid it altogether. "Managing negatives," they note, "may actually be more important for brand equity development than cultivating positive connections with brands."
"Relating Badly to Brands" appeared in the April 2013 issue of the Journal of Consumer Psychology.
On the way to financial recovery after the 2008 economic crisis, U.S. officials are running into an especially frustrating obstacle: Too many corporations are sitting atop record levels of cash that they could use to refuel the economy. In fact, firms in the S&P 500 stock index now have US$1 billion in reserve, according to Standard & Poor's Capital IQ. The reason why firms are so unwilling to spend is the basis of a study by finance professors Jarrad Harford of the Foster School of Business at the University of Washington in Seattle, Sandy Klasa of the Eller College of Management at the University of Arizona in Tucson, and William Maxwell of the Cox School of Business at Southern Methodist University in Dallas, Texas.
The researchers find that firms' apparent stinginess is a matter of "once bitten, twice shy." Firms are still skittish after banks all but stopped issuing loans after the 2008 crash—they want to maintain a comfortable reserve in case banks tighten lending practices in the future.
The authors note that while banks offer A-rated companies loans that mature in 20 to 30 years, they often offer B-rated companies loans that come due in just ten. They find that the average bond maturity for U.S. corporations decreased from 16.6 years in the 1985– 1989 time frame to 11.3 years in 2005–2008. "What happens if you cannot refinance?" asks Maxwell. "If capital markets turn against you, you're done. The A-rated firm rolls over its debt regularly. The smaller, B-rated firm does not have this capacity."
The authors conclude that "these findings highlight the usefulness of considering timevariation in the supply of credit when conducting research about what drives corporate financial policy choices."
"Refinancing Risk and Cash Holdings" is forthcoming in the Journal of Finance.
James Scott, assistant professor of statistics at the University of Texas at Austin McCombs School of Business, has received a National Science Foundation CAREER Award, which includes US$400,000. The funding will support his current research involving the creation of software that solves difficult data-analysis problems such as forecasting disease rates.
The American Marketing Association's Marketing and Society Special Interest Group has given its Lifetime Achievement Award to Ronald P. Hill, Richard J. and Barbara Naclerio Chair Professor of Marketing and Business Law at the Villanova School of Business in Pennsylvania. Hill was recognized for his body of research on restricted consumer behavior, marketing ethics, corporate social responsibility, and public policy.
The Federation of European Securities Exchanges has awarded its 2013 De la Vega Prize to French researchers Laurence Lescourret of ESSEC Business School and Sophie Moinas of Toulouse School of Economics for their paper "Liquidity Supply Across Multiple Trading Venues." In their study, the co-authors use a model to analyze the behavior of global dealers in a fragmented global market.
Although young music lovers may say they prefer to listen to the newest songs from up-and-coming bands, they're more likely to respond to familiar tunes that radio stations play over and over again. That's according to a paper by Morgan Ward, marketing professor at the Cox School of Business at Southern Methodist University in Dallas, Texas; Joseph Goodman, assistant professor of marketing at the Olin Business School at Washington University in St. Louis, Missouri; and Julie Irwin, marketing professor at the McCombs School of Business at the University of Texas, Austin.
The researchers asked 386 music listeners in the U.S. to rate their agreement or disagreement with statements such as "Radio is too repetitive" and "Radio should play more new music." As the researchers expected, the majority expressed a strong desire to hear new music on the radio.
However, a series of subsequent studies contradicted those results. In one study, the researchers asked 244 undergraduates to listen to a pair of current songs—one played on the radio more often, one less often. When asked to state a preference, participants more often chose songs with which they were most familiar.
Another study showed that this preference for familiar music increases when participants have to perform a mental task. The researchers assigned 276 students either to memorize 20 words (high load), four words (low load), or no words. Then, all were asked to choose one of five radio stations to listen to as they completed the task. The stations were described with statements such as "We play the hottest top-ten songs!" or "We play the songs of tomorrow that you've never heard!" Although students in all three groups often chose stations playing familiar music, those in the "high load" group were even more likely to do so.
These findings show that music outlets should focus on broadcasting familiar songs "even if consumers say they want more novelty," the researchers write in their conclusion. They note that their findings could also apply to the food, entertainment, and film industries. They conclude that, in a world where consumers are beset by choices and information overload on a daily basis, the familiar can offer a much-needed reprieve.
"The Same Old Song: The Power of Familiarity in Music Choice" is under review.
The Powerful See Themselves in Others
Researchers from the University of Utah's Eccles School of Business in Salt Lake City and the University of Southern California's department of psychology in Los Angeles find that those in power often mistakenly assume that those they lead share their own traits, attitudes, and emotions. The researchers call this social projection "self-anchoring."
The researchers found the powerful not only project themselves on others, but assume their groups share only their negative traits, attitudes, and feelings—not the positive. "Perhaps they want to say, 'Yes, I'm not the greatest person, but everyone in my group is just like me.' That may excuse the negativity, or give it an acceptable context," says lead author Jennifer Overbeck of the Eccles School.
Self-anchoring may help powerful people make decisions more quickly, but it also can lead them to believe that they represent those they lead more than they actually do, the authors write. Rather than think of themselves as self-centered or autocratic in their actions, they would rather believe that what they want to do is already aligned with the desires of the group.
When involved in group decisions, managers should question whether consensus exists or whether they only believe it exists, the authors note. They recommend that companies train managers to use a "systematic process for gathering input and feedback" to gauge the group's true perspective, especially for sensitive issues.
"One for All: Social Power Increases Self-Anchoring of Traits, Attitudes, and Emotions" appeared in the August 2013 issue of Psychological Science.
If salespeople want to impress potential customers, they'll need to stop trying to convey a sense of warmth and instead display the appearance of wealth, according to researchers Lisa Bolton, an associate professor of marketing in the Penn State Smeal College of Business in University Park, and Maura Scott and Martin Mende, assistant professors of marketing at Florida State University's College of Business in Tallahassee.
For their recent study, the three examined how buyers reacted to sellers' conspicuous consumption—their obvious displays of wealth in their personal appearances and environments. They found that although buyers felt less warmth toward sellers that displayed clear signals of wealth, they also perceived these sellers as more competent.
However, the researchers emphasize that such perceptions are most helpful in "exchange-based" buyer-seller relationships that emphasize efficiency and value, such as those between consumers and financial advisors. In "communal" buyer-seller relationships built on nurturing and caring, such as those between doctors and patients, a display of wealth could imply a sense of self-promotion and undermine the relationship.
"Both warmth and competence matter," the researchers write, "but their relative importance varies with the norm guiding the buyer-seller relationship."
"Judging the Book By Its Cover? How Consumers Decode Conspicuous Consumption Cues in Buyer-Seller Relationships" appeared in the June 2013 issue of the Journal of Marketing Research.
Stephen Anderson-Macdonald, a doctoral candidate at London Business School, is studying the most effective ways to assist microentrepreneurs in South Africa and Ghana—many of whom live on less than US$2 a day. Through an ambitious research project, Anderson- Macdonald wants to address largely ineffective foreign aid and microlending efforts by developing new approaches that will help owners of very small enterprises achieve profitability and scale.
In Ghana, Anderson- Macdonald and LBS professors are working with a local institution, Financial Republic, to test a new loan product tied to the purchase of assets such as equipment, construction, or vehicles. They will offer this loan to more than 3,500 businesses; then they will compare its effectiveness to that of typical cash loans not tied to asset purchases.
In South Africa, Anderson- Macdonald has partnered with Building Bridges, an NGO founded by LBS management professor Michael Hay, to offer mini-MBA training sessions in either marketing and sales or finance and accounting to about 1,000 microentrepreneurs. The researchers will compare outcomes for these trainees to outcomes of members of a control group that received no training.
Conducting such a large-scale research project requires a great deal of entrepreneurial initiative and legwork, says Anderson- Macdonald. In addition to traditional research tasks, he and his team also must continuously raise funds, complete grant reports, conduct market research, train survey teams, negotiate partner relationships, and travel internationally. "This type of risky research project does not move forward if people do not roll up their sleeves and get their hands dirty— often quite literally," says Anderson-Macdonald. "It requires getting out of the 'ivory tower' and spending time in the field talking with entrepreneurs and community stakeholders. This has been one of the most important points I've learned from running our randomizedcontrolled trials."
Anderson-Macdonald plans to expand his examination of microlending practices to Uganda and Malawi. He is working with Rajesh Chandy, an entrepreneurship professor at LBS, and Bilal Zia, an economist at The World Bank. To support the project, Anderson- Macdonald and LBS have secured funding from organizations such as The World Bank, USAID, and the U.K.'s Department for International Development.
• INSIDER LAUNCH
DePaul University's Kellstadt Graduate School of Business in Chicago has launched The Business Education Insider, an online resource for national data, survey results, news, articles, and conference information pertaining to graduate business education, particularly programs for working professionals. The site, www.business educationinsider.com, tracks trends in graduate business programs in areas such as recruiting, enrollment, and student experience. For more information or to read BEI's first survey about parttime MBA program innovation, visit www.business educationinsider.com.
• MEASURING RISK
The Yale School of Management has launched the Yale Program on Financial Stability to provide case studies, research, and training to regulators in macroprudential financial regulation, which focuses on identifying, measuring, and managing systemic risk in financial markets. Established with a grant from the Alfred P. Sloan Foundation, the program also includes the creation ofthe Systemic Risk Institute and an annual conference. The program is directed by Andrew Metrick, deputy dean and Michael H. Jordan Professor of Finance and Management. For information, visit som.yale.edu/ypfs.
• CHINA STUDIES
Global publisher Emerald and the International Association for Chinese Management Research (IACMR) invite submissions to their Chinese Management Research Fund Award. Submissions should address the dissemination of knowledge for the social good in mainland China. The lead researcher must be based in mainland China. The winner will receive £2,000 and two runners up will receive £500. Cover letters and summaries of fewer than 2,000 words must be submitted online at ww2.emerald insight.com/ awards/iacmr.htm by January 6, 2014. Results will be announced in March.
• CARS AND CANCER
Yongtao Guan of the University of MiamiSchool of Business Administration, along with colleagues from the Yale School of Public Health, has received a US$453,000 grant from the U.S. National Cancer Institute of the National Institutes of Health. The grant will be used to identify potential links between cancer risks and the proximity of homes to heavy automobile traffic, using the latitude and longitude of addresses rather than less precise aggregated ZIP code data. The objective of the research is to develop software to help the public and policymakers assess the cancer risk in certain environments and to help city planners choose locations for new roads, schools, parks, and neighborhoods.
• CRISIS STUDY
Stephen Kinsella of the University of Limerick's Kemmy Business School in Ireland has received €650,000 to support a three-year study of the evolution of debt and demography in the European Union and to examine the European economy. He will collaborate with Nobel Laureate and economist Joseph Stiglitz of Columbia University in New York.