Entrepreneurial opportunities, implicit contracts and market making for complex consumer goods

This article extends the theory of entrepreneurial opportunity exploitation, outlining how under certain conditions, opportunity exploitation is dependent on market making innovations. Where adverse selection and moral hazard characterize markets, consumers are likely to withdraw regardless of product quality. In order to overcome consumer resistance, entrepreneurs must signal credible commitments. But because consumers purchase without fully specifying requirements, entrepreneurs' commitments take the partial form of implicit contracts, creating strong mutual commitments to repeated transactions. These commitments enable novel markets to function, but introduce additional costs. This article illustrates the theory with the historic case of Singer in sewing machines

Food marketing technology and contingency market valuation

Marketing activities are introduced into a rational expectations model of the food marketing system. The model is used to evaluate effects of alternative marketing technologies on the distribution of the benefits of contingency markets in agriculture. Benefits depend on two parameters: the cost share of farm inputs and the elasticity of substitution between farm and nonfarm inputs in food marketing. Over a broad spectrum of technologies, consumers are likely to be the net beneficiaries and farmers the net losers from the provision of contingency markets

The potential inefficiency of using marketing margins in applied commodity price analysis, forecasting and risk management

This paper examines the implications of using marketing margins in applied commodity price analysis. The marketing-margin concept has a long and distinguished history, but it has caused considerable controversy. This is particularly the case in the context of analyzing the distribution of research gains in multi-stage production systems. We derive optimal tax schemes for raising revenues to finance research and promotion in a downstream market, derive the rules for efficient allocation of the funds, and compare the rules with an without the marketing-margin assumption. Applying the methodology to quarterly time series on the Australian beef-cattle sector and, with several caveats, we conclude that, during the period 1978:2 - 1988:4, the Australian Meat and Livestock Corporation optimally allocated research resources.

Green marketing in housing: reality or rhetoric?

All new homes in the UK will be required to be zero carbon from 2016. Housing sector bodies and individual housing developers are championing a transition from traditional marketing to green marketing approaches to raise consumer awareness of the benefits of low and zero carbon homes. On-site sales teams on housing developments form a central interface between the developer and potential buyers. These teams, then, have a critical role in the success or otherwise of the developers’ green marketing strategies. However, there is a dearth of empirical research that explores the actual attitudes and practices of these teams. An exploratory case study approach was adopted. The data collection consisted of reviewing relevant company documentation and semi-structure interviews with the on-site sales teams from six housing developments. The findings from two case studies suggest that the sales teams do have potential to forge a bridge between the design / production and consumption spheres in the way that consumers understand and appreciate, but further work is required. The sales teams’ practices were constrained by the incumbent, traditional marketing logic that rotates around issues such as location and selling price. The sales teams appeared to adopt a strategy of a restriction of information about the benefits of low and zero carbon homes to not disturb the prevailing logic. Further, the sales teams justify this insulating mechanism by the argument that consumers are not interested in those benefits. This rhetoric may be driving a real wedge between the design / production and consumption spheres to the detriment of the consumer and, in the longer term, the house builder itself.

The level of compliance with the International Code of marketing of breast-milk substitutes: does it matter to stock markets?

The present paper explores, theoretically, and empirically, whether compliance with the International Code of marketing of breast-milk substitutes impacts on financial performance measured by stock markets. The empirical analysis, which considers a 20-year period, shows that stock markets are indifferent to the level of compliance by manufacturers with the International Code. Two important issues emerge from this result. Based on our finding that financial performance as measured by stock markets cannot explain the level of compliance, the first issue refers to what alternative types of mechanisms drive manufacturers who comply the least with voluntary codes such as the International Code. Conversely, from our finding that stock markets do not reward the most compliant, the second issue raised is an inherent weakness of stock markets to fully incorporate social and environmental values.

The STRATADAPT scale: a measure of marketing strategy adaptation to international business markets

Purpose – The development of marketing strategies optimally adjusted to export markets has been a vitally important topic for both managers and academics for about five decades. However, there is no agreement in the literature about which elements integrate marketing strategy and which components of domestic strategies should be adapted to export markets. The purpose of this paper is to develop a new scale – STRATADAPT. Design/methodology/approach – Results from a sample of small and medium-sized industrial exporting firms support a four-dimensional scale – product, promotion, price, and distribution strategies – of 30 items. The scale presents evidence of composite reliability as well as discriminant and nomological validity. Findings – Findings reveal that all four dimensions of marketing strategy adaptation are positively associated with the amount of the firm's financial resources allocated to export activity. Practical implications – The STRATADAPT scale may assist managers in developing better international marketing strategies as well as in planning more accurate and efficient marketing programs across markets. Originality/value – This study develops a new scale, the STRATADAPT scale, which is a broad measure of export marketing strategy adaptation.

Diagnosing and treating operational and implementation barriers in synoptic marketing planning

Strategic marketing planning is now widely adopted by business-to-business organizations. While marketing planning principles are well established, practitioners attempting to implement the process often find their progress impeded by a variety of barriers. These barriers are explored through a review of published evidence and case study analysis of several organizations. This analysis exposes three levels of barriers to effective business-to-business marketing planning, relating to (i) organizational infrastructure, (ii) the planning process and (iii) implementation. These barriers reflect the synoptic nature of planning in many organizations. The findings lead to the development of a practitioner-oriented diagnostic and treatment tool which guides managers through the marketing planning process. Although this diagnostic deals specifically with issues which are relevant to the marketing planner, its wider implications for strategic planning are also explored.

'Doctor, Doctor...' entrepreneurial diagnosis and market making

Doctor-patient jokes are universally popular because of the information asymmetries within the diagnostic relationship. We contend that entrepreneurial diagnosis is present in markets where consumers are unable to diagnose their own problems and, instead, may rely on the entrepreneur to diagnose them. Entrepreneurial diagnosis is a cognitive skill possessed by the entrepreneur. It is an identifiable subset of entrepreneurial judgment and can be modeled – which we attempt to do. In order to overcome the information asymmetries and exploit opportunities, we suggest that entrepreneurs must invest in market making innovations (as distinct from product innovations) such as trustworthy reputations. The diagnostic entrepreneur described in this paper represents a creative response to difficult diagnostic problems and helps to explain the success of many firms whose products are not particularly innovative but which are perceived as offering high standards of service. These firms are trusted not only for their truthfulness about the quality of their product, but for their honesty, confidentiality and understanding in helping customers identify the most appropriate product to their needs.

How culture and government shape entrepreneurial innovation: the case of Korean and UK online gaming firms

This paper examines institutional sources of product innovation with reference to the online gaming sector of Korea and the UK. It examines the combined impact of formal and informal institutions and their interaction with multiple case studies. Despite the growing importance of innovative products in contemporary entertainment (including interactive games), the ‘informal’ source of innovation has attracted limited attention. By closely looking at the idea exploration, generation and selection process (where creativity plays a major role), we intend to find out how values and public policy affect product innovation. This study shows that the value of Korean and UK online gaming firms (regardless of their different socio-economic contexts) plays an important role in generating product innovation. An additional point is that Korean firms are likely to take advantage of government policy support to overcome inadequate institutional settings in conjunction with the initial conditions of online game development.

Fairness quality: the role of fairness in a social and ethically oriented marketing landscape

Research into the dark side of customer management and marketing is progressively growing. The marketing landscape today is dominated with suspicion and distrust as a result of practices that include hidden fees, deception and information mishandling. In such a pessimistic economy, marketers must reconceptualise the notion of fairness in marketing and customer management, so that the progress of sophisticated customisation schemes and advancements in marketing can flourish, avoiding further control and imposed regulation. In this article, emerging research is drawn to suggest that existing quality measures of marketing activities, including service, relationships and experiences may not be comprehensive in measuring the relevant things in the social and ethically oriented marketing landscape, and on that basis does not measure the fairness which truly is important in such an economy. The paper puts forward the concept of Fairness Quality (FAIRQUAL), which includes as well as extends on existing thinking behind relationship building, experience creation and other types of customer management practices that are believed to predict consumer intentions. It is proposed that a fairness quality measure will aid marketers in this challenging landscape and economy.

Diversifying into technical clothing manufacture as entrepreneurial learning: a situated learning theory perspective

Purpose – The purpose of this paper is to demonstrate analytically how entrepreneurial action as learning relating to diversifying into technical clothing – i.e. a high-value manufacturing sector – can take place. This is particularly relevant to recent discussion and debate in academic and policy-making circles concerning the survival of the clothing manufacture industry in developed industrialised countries. Design/methodology/approach – Using situated learning theory (SLT) as the major analytical lens, this case study examines an episode of entrepreneurial action relating to diversification into a high-value manufacturing sector. It is considered on instrumentality grounds, revealing wider tendencies in the management of knowledge and capabilities requisite for effective entrepreneurial action of this kind. Findings – Boundary events, brokers, boundary objects, membership structures and inclusive participation that addresses power asymmetries are found to be crucial organisational design elements, enabling the development of inter- and intracommunal capacities. These together constitute a dynamic learning capability, which underpins entrepreneurial action, such as diversification into high-value manufacturing sectors. Originality/value – Through a refinement of SLT in the context of entrepreneurial action, the paper contributes to an advancement of a substantive theory of managing technological knowledge and capabilities for effective diversification into high-value manufacturing sectors.

Knowledge dissemination in the global service marketing community

Purpose– The evolution of the service marketing field was marked by the emergence of a global, vigorous and tolerant community of service marketing researchers. This paper seeks to examine the history of the service marketing community and argues that it may be an archetype for building the emergent global service research community. Design/methodology/approach– The study combines qualitative and quantitative approaches. The authors interviewed four pioneering service scholars and also collected descriptive data (e.g. Authorship, Affiliation, Title, Keywords) of all service related articles published in 13 top peer‐reviewed marketing and service journals over the last 30 years (5,432 articles; 6,450 authors). In a dynamic analysis the authors mapped global collaboration between countries over time and detected clusters of international collaboration. Findings– Findings suggest a growing international collaboration for the USA and the UK, while for other countries like Israel the global collaboration started from a high level and decreases now. Further, the service marketing community never became polarized and there were always contributions from researchers all over the world. Research limitations/implications– As the global service research community is developing, service marketing becomes a research neighborhood within the broader service research community. Simultaneously, other research neighborhoods are emerging within this new community (e.g. service arts, service management, service engineering, service science). Originality/value– Anchored on the social evolution and biological evolution metaphors, this study explains the evolution of the service marketing field from both qualitative and quantitative perspectives. Furthermore, it explains the development of the service marketing community as an archetype for building the global service research community.