ORCID Profile
0000-0001-5011-5269
Current Organisations
KU Leuven
,
Tilburg University
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Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Date: 11-2010
Abstract: To evaluate the success of a new product, managers need to determine how much of its new demand is due to cannibalizing the firm's other products, rather than drawing from competition or generating primary demand. We introduce a time-varying vector error-correction model to decompose the base sales of a new product into its constituent sources. The model allows managers to estimate cannibalization effects and calculate the new product's net demand, which may be considerably less than its total demand. We apply our methodology to the introduction of the Lexus RX300 using detailed car transaction data. This case is especially interesting because the Lexus RX300 was the first crossover sport utility vehicle (SUV), implying that its demand could come from both the luxury SUV and the luxury sedan categories. Because Lexus was active in both categories, there was a double cannibalization potential. We show how the contribution of the different demand sources varies over time and discuss the managerial implications for both the focal brand and its competitors.
Publisher: SAGE Publications
Date: 05-10-2015
Abstract: For service providers, it is essential to understand how their business is affected by the macroeconomy. This is especially pressing for the tourism sector, the world’s largest export service, because the number of incoming visitors is likely to be strongly determined by the business cycles in the countries of origin. Utilizing state-of-the-art business-cycle metrics, we derive novel insights on the relationship between international tourism and the business cycle. We find an excess sensitivity of the sector to economic cycles based on a multidecade data set of international visitors to New Zealand coming from multiple counties and with various visitor purposes. However, we find no asymmetries in the speed of adjustment across contractions and expansions, suggesting a quicker recovery than many other (nonservice) sectors. Moreover, a higher cyclical volatility results in higher growth in the long run. A robustness check for two more destination countries (Australia and Japan) yields comparable insights. The results underscore the need to closely monitor the cyclical sensitivity and long-term growth prospects of the various visitor streams into the country, in order to (i) better tailor the accommodations and services to these streams and (ii) exploit ersification opportunities to reduce the overall cyclical volatility.
Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Date: 07-2010
Abstract: Despite the economic significance of the theme park industry and the huge investments needed to set up new attractions, no marketing models exist to guide these investment decisions. This study addresses this gap in the literature by estimating a response model for theme park attendance. The model not only determines the contribution of each attraction to attendance, but also how this contribution is distributed within and across years. The model accommodates saturation effects, which imply that the impact of a new attraction is smaller if similar attractions are already present. It also captures reinforcement effects, meaning that a new attraction may reinforce the drawing power of similar extant attractions, especially when these were introduced recently. The model is calibrated on 25 years of weekly attendance data from the Efteling, a leading European theme park. Our return on investment calculations show that it is more profitable to invest in multiple smaller attractions than in one big one. This finding is in remarkable contrast with the current “arms race” in the industry. Furthermore, even though thrill rides tend to be more effective than theme rides, there are conditions under which one should consider to switch to the latter.
Publisher: SAGE Publications
Date: 04-2013
DOI: 10.1509/JMR.10.0414
Abstract: Firms are under increasing pressure to justify their marketing expenditures. This evolution toward greater accountability is reinforced in harsh economic times when marketing budgets are among the first to be reconsidered. To make such decisions, managers must know whether, and to what extent, marketing's effectiveness varies with the economic tide however, surprisingly little research addresses this issue. Therefore, the authors conduct a systematic investigation of the business cycle's impact on the effectiveness of two important marketing instruments: price and advertising. To do so, they estimate time-varying short- and long-term advertising and price elasticities for 150 brands across 36 consumer packaged goods categories, using 18 years of monthly U.K. data from 1993 to 2010. The long-term price sensitivity tends to decrease during economic expansions, whereas long-term advertising elasticities increase. During contractions, the long-term own and cross price elasticities increase. Moreover, throughout the observation period, the short-term price elasticity became significantly stronger. Finally, patterns differ across categories and brands, which presents opportunities for firms that know how to ride the economic tide.
Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Date: 09-2017
Abstract: A key conundrum facing organizations is how to adjust marketing budgets in response to the business cycle. While most firms use procyclical spending (spending less during economic contractions), academic studies often recommend countercyclical spending (spending more during contractions), which begs the following question: What is the right thing to do? The spending problem is compounded further when demand is not just driven by one country’s business cycle, but by the (nonsynchronized) business cycles of multiple countries, as is the case for tourism marketing aiming to attract tourists originating from different countries. We derive insights into the best way to allocate marketing budgets across countries under varying economic conditions. We show that the allocation decisions are driven by the procyclical versus countercyclical nature of three factors: unit sales, marketing effectiveness, and per-unit profit contribution. To study how unit sales and marketing effectiveness respond to the business cycle, we develop a transfer function dynamic hierarchical linear model. We also model the responsiveness of the profit contribution to the business cycle. In an application to New Zealand tourism marketing, we find that a reallocation of the government’s marketing budget could yield an increase in tourist revenues of NZD $121 million. Data and the online appendix are available at 0.1287/mksc.2017.1046 .
Publisher: Springer Science and Business Media LLC
Date: 15-07-2017
Publisher: SAGE Publications
Date: 21-02-2022
DOI: 10.1177/00222437211058102
Abstract: The field's knowledge of marketing-mix elasticities is largely restricted to developed countries in the North-Atlantic region, even though other parts of the world—especially the Indo-Pacific Rim region—have become economic powerhouses. To better allocate marketing budgets, firms need to have information about marketing-mix elasticities for countries outside the North-Atlantic region. The authors use data covering over 1,600 brands from 14 product categories collected in 7 developed and 7 emerging Indo-Pacific Rim countries across more than 10 years to estimate marketing elasticities for line length, price, and distribution and examine which brand, category, and country factors influence these elasticities. Averaged across brands, categories, and countries, line-length elasticity is .459, price elasticity is −.422, and distribution elasticity is .368, but with substantial variation across brands, categories, and countries. Contrary to what has been suggested in previous research, the authors find no systematic differences in marketing responsiveness between emerging and developed economies. Instead, the key country-level factor driving elasticities is societal stratification, with Hofstede's measure of power inequality (power distance) as its cultural manifestation and income inequality as its economic manifestation. As the effects of virtually all brand, category, and country factors differ across the three marketing-mix instruments, the field needs new theorizing that is contingent on the marketing-mix instrument studied.
Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Date: 03-2007
Abstract: Product-harm crises are among a firm’s worst nightmares. A firm may experience (i) a loss in baseline sales, (ii) a reduced own effectiveness for its marketing instruments, (iii) an increased cross sensitivity to rival firms’ marketing-mix activities, and (iv) a decreased cross impact of its marketing-mix instruments on the sales of competing, unaffected brands. We find that this quadruple jeopardy materialized in a case study of an Australian product-harm crisis faced by Kraft peanut butter. We arrive at this conclusion by using a time-varying error-correction model that quantifies the consequences of this crisis on base sales, and on own- and cross-brand short- and long-term effectiveness. The proposed modeling approach allows managers to make more informed decisions on how to regain the brands’ pre-crisis performance levels.
Publisher: SAGE Publications
Date: 29-12-2022
DOI: 10.1177/00222429221129200
Abstract: A theory-first paradigm tends to be the dominant approach in much academic marketing research. In this approach, a theory is borrowed, refined, or developed and then tested empirically. In this challenging-the-boundaries article, the authors make a case for an empirics-first approach. “Empirics-first” refers to research that (1) is grounded in (originates from) a real-world marketing phenomenon, problem, or observation, (2) involves obtaining and analyzing data, and (3) produces valid marketing-relevant insights without necessarily developing or testing theory. The empirics-first approach is not antagonistic to theory but rather can serve as a stepping-stone to theory. The approach lends itself well to today’s data-rich environment, which can reveal novel research questions untethered to theory. The present article describes the underlying principles of an empirics-first approach, which consists of exploring a domain purposefully without preconceptions. Using a rich set of published ex les, the authors offer guidance on how to implement empirics-first research and how it can lead to valuable knowledge development. Advice is also offered to scholars on how to report empirics-first research and to reviewers and to editorial teams on how to evaluate it. The ultimate objective is to pave a way for the empirics-first approach to enter the mainstream of academic marketing research.
Publisher: SAGE Publications
Date: 03-2013
DOI: 10.1509/JM.10.0414
Abstract: Product-harm crises are omnipresent in today's marketplace. Such crises can cause major revenue and market-share losses, lead to costly product recalls, and destroy carefully nurtured brand equity. Moreover, some of these effects may spill over to nonaffected competitors in the category when they are perceived to be guilty by association. The extant literature lacks generalizable knowledge on the effectiveness of different marketing adjustments that managers often consider to mitigate the consequences of such events. To fill this gap, the authors use large household-scanner panels to analyze 60 fast-moving consumer good product crises that occurred in the United Kingdom and the Netherlands and resulted in the full recall of an entire variety. The authors assess the effects of postcrisis advertising and price adjustments on the change in consumers’ brand share and category purchases. In addition, they consider the extent to which the effects are moderated by two key crisis characteristics: the extent of negative publicity surrounding the event and whether the affected brand had to publicly acknowledge blame. Using the empirical findings, the authors provide context-specific managerial recommendations on how to overcome a product-harm crisis.
Publisher: SAGE Publications
Date: 02-2005
Location: United States of America
No related grants have been discovered for Marnik Dekimpe.