INTRODUCTION: ANALYZING

ACCUMULATED KNOWLEDGE AND

INFLUENCING FUTURE RESEARCH

OVERVIEW

Review of Marketing Research, now in its seventh volume, is a fairly recent

publication covering the important areas of marketing research with a more
comprehensive state-of-the-art orientation. The chapters in this publication
review the literature in a particular area, offer a critical commentary,
develop an innovative framework, and discuss future developments, as well
as present specific empirical studies. The first six volumes have featured
some of the top researchers and scholars in our discipline who have reviewed
an array of important topics. The response to the first six volumes has been
truly gratifying, and we look forward to the impact of the seventh volume
with great anticipation.

PUBLICATION MISSION

The purpose of this series is to provide current, comprehensive, state-of-the-

art articles in Review of Marketing Research. Wide-ranging paradigmatic or
theoretical, or substantive agendas are appropriate for this publication. This
includes a wide range of theoretical perspectives, paradigms, data (qualitative,
survey, experimental, ethnographic, secondary, etc.), and topics related to the
study and explanation of marketing-related phenomenon. We reflect an
eclectic mixture of theory, data, and research methods that is indicative of a
publication driven by important theoretical and substantive problems. We
seek studies that make important theoretical, substantive, empirical,
methodological, measurement, and modeling contributions. Any topic that
fits under the broad area of ‘‘marketing research’’ is relevant. In short, our
mission is to publish the best reviews in the discipline.
Thus, this publication bridges the gap left by current marketing research
publications. Current marketing research publications such as the Journal of
xiii
xiv INTRODUCTION

Marketing Research (USA), International Journal of Marketing Research

(UK), and International Journal of Research in Marketing (Europe) publish
academic articles with a major constraint on the length. In contrast, Review
of Marketing Research will publish much longer articles that are not only
theoretically rigorous but also more expository, with a focus on
implementing new marketing research concepts and procedures. This will
also serve to distinguish this publication from Marketing Research magazine
published by the American Marketing Association (AMA).
Chapters in Review of Marketing Research should address the following
issues:
 Critically review the existing literature.
 Summarize what we know about the subject – key findings.
 Present the main theories and frameworks.
 Review and give an exposition of key methodologies.
 Identify the gaps in literature.
 Present empirical studies (for empirical papers only).
 Discuss emerging trends and issues.
 Focus on international developments.
 Suggest directions for future theory development and testing.
 Recommend guidelines for implementing new procedures and concepts.

CHAPTERS IN THE FIRST VOLUME

The inaugural volume exemplified the broad scope of the Review of

Marketing Research. It contained a diverse set of review chapters covering
areas such as emotions, beauty, information search, business and marketing
strategy, organizational performance, reference scales, and correspondence
analysis. These chapters were contributed by some of the leading scholars in
the field, five of them being former editors of major journals (Journal of
Marketing and Journal of Consumer Research).
Johnson and Stewart provided a review of traditional approaches to the
analysis of emotion in the context of consumer behavior. They reviewed
appraisal theory and discussed examples of its application in the contexts of
advertising, customer satisfaction, product design, and retail shopping.
Holbrook explored and reviewed the concept of beauty as experienced by
ordinary consumers in their everyday lives. His typology conceptualized
everyday usage of the term ‘‘beauty’’ as falling into eight categories
distinguished on the basis of three dichotomies: (i) extrinsically/intrinsically
Introduction xv

motivated; (ii) thing(s)/person(s)-based; and (iii) concrete/abstract. Xia and

Monroe first reviewed the literature on consumer information search, and
then the literature on browsing. They proposed an extended consumer
information acquisition framework and outlined relevant substantive and
methodological issues for future research. Hunt and Morgan reviewed the
progress and prospects of the ‘‘resource-advantage’’ (R-A) theory. They
examined in detail the theory’s foundational premises, showed how R-A
theory provides a theoretical foundation for business and marketing strategy,
and discussed the theory’s future prospects. Bharadwaj and Varadarajan
provided an interdisciplinary review and perspective on the determinants of
organizational performance. They examined the classical industrial organi-
zation school, the efficiency/revisionist school, the strategic groups school,
the business policy school, the PIMS paradigm, the Austrian school, and the
resource-based view of the firm. They proposed an integrative model of
business performance that modeled firm-specific intangibles, industry
structure, and competitive strategy variables as the major determinants of
business performance. Vargo and Lusch focused attention on consumer
reference scales, the psychological scales used to make evaluations of
marketing-related stimuli, in consumer satisfaction/dissatisfaction (CS/D)
and service quality (SQ) research and proposed social judgment–involvement
(SJI) theory as a potential theoretical framework to augment, replace, and/or
elaborate the disconfirmation model and latitude models associated with
CS/D and SQ research. Finally, Malhotra, Charles, and Uslay reviewed the
literature focusing on the methodological perspectives, issues, and applica-
tions related to correspondence analysis. They concluded with a list of the
creative applications and the technique’s limitations.

CHAPTERS IN THE SECOND VOLUME

The second volume continued the emphasis of the first by featuring a broad
range of topics contributed by some of the top scholars in the discipline. The
diverse chapters in the second volume can all be grouped under the broad
umbrella of consumer action. Bagozzi developed a detailed framework for
consumer action in terms of automaticity, purposiveness, and self-
regulation. MacInnis, Patrick, and Park provided a review of affective
forecasting and misforecasting. Ratchford, Lee, and Talukdar reviewed the
literature related to use of the Internet as a vehicle for information search.
They developed and empirically tested a general model of the choice of
information sources with encouraging results. Miller, Malhotra, and King
xvi INTRODUCTION

reviewed the categorization literature and developed a categorization-based

model of the product evaluation formation process, which assists in the
prediction of set membership (i.e., evoked, inert, or inept). Lam and
Parasuraman proposed an integrated framework that incorporated a more
comprehensive set of various individual-level determinants of technology
adoption and usage. Recently, marketing has come under increased pressure
to justify its budgets and activities. Lehmann developed a metrics value
chain to capture the various levels of measurement employed in this respect.
Finally, Oakley, Iacobucci, and Duhachek provided an exposition of
hierarchical linear modeling (HLM).

CHAPTERS IN THE THIRD VOLUME

Bolton and Tarasi described how companies can effectively cultivate customer
relationships and develop customer portfolios that increase shareholder value.
They reviewed the extensive literature on customer relationship management
(CRM), customer asset management, and customer portfolio management,
and summarized key findings. They examined five organizational processes
necessary for effective CRM: making strategic choices that foster organiza-
tional learning; creating value for customers and the firm; managing sources
of value; investing resources across functions, organizational units, and
channels; and globally optimizing product and customer portfolios.
Chandrasekaran and Tellis critically reviewed research on the diffusion of
new products primarily in the marketing literature and also in economics
and geography. While other reviews on this topic are available, their review
differs from prior ones in two important aspects. First, the prior reviews
focus on the S-curve of cumulative sales of a new product, mostly covering
growth. Chandrasekaran and Tellis focused on phenomena other than the
S-curve, such as takeoff and slowdown. Second, while the previous reviews
focus mainly on the Bass model, Chandrasekaran and Tellis also considered
other models of diffusion and drivers of new product diffusion.
Eckhardt and Houston reviewed, compared, and contrasted cultural and
cross-cultural psychological methods. They presented the underlying concep-
tions of culture that underpin both streams, and discussed various methods
associated with each approach. They identified the consumer research
questions best answered using each approach and discussed how each
approach informs the other. Finally, they examined how consumer research
can benefit from understanding the differences in the two approaches. While
cultural and cross-cultural perspectives adopt distinct views about culture and
Introduction xvii

psychological processes, it is possible to view them as complementary rather

than incompatible. Several suggestions by Malhotra and colleagues can be
useful in this respect (Malhotra, 2001; Malhotra, Agarwal, & Peterson, 1996;
Malhotra & Charles, 2002; Malhotra & McCort, 2001; Malhotra, Ulgado,
Agarwal, Shainesh, & Wu, 2005). For example, one can start with an etic
approach and then make emic modifications to adapt to the local cultures.
Alternatively, one can start with an emic perspective and then make etic
adaptations to get an understanding across cultures. This systematic theory
building and testing process is illustrated by Kim and Malhotra (2005).
Grewal and Compeau synthesized research from consumer behavior,
psychology, and applied economics to address how price as an information
cue affects consumers’ responses in the context of other information cues.
They developed a conceptual framework, using adaptation-level theory and
transaction utility theory, that synthesized prior research on price, reference
price, and other information cues and their effects on consumers’ price
expectations, evaluations, and behavioral intentions. Their conceptual
model contributes to our understanding of the way imperfect information
affects consumers’ decision processes, goes well beyond the original price–
perceived quality paradigm, and integrates knowledge from consumer
research, psychology, and applied economics.
Sayman and Raju provided a review of research on store brands. Their
review focused on integrating research in key areas and identifying
directions for future research. There is limited theoretical and empirical
research regarding optimal counterstrategies of national brands against
store brands; studies tend to focus on one aspect, and national brand quality
is typically assumed to be exogenous. Researchers have, by and large,
focused on me-too-type store brands. Future research should consider
premium store brand products as well.
Merunka and Peterson examined an intrapersonal aspect of language,
namely whether the structure of a language, per se, influences the thoughts
of those who speak it. They reviewed empirical research conducted over the
past half-century on the effects of language structure on a variety of mental
activities. They found support for the weak form of the linguistic relativity
hypothesis, the notion that the structure of a language does indeed influence
(but not determine) cognition. The estimation of independent and joint
effects of language is difficult at best. We need comprehensive studies that
incorporate the order in which bilinguals acquire their respective languages,
how they acquire their languages, and when they acquire their languages.
Future research should also compare the possible influence of a single
language on mental processing across different cultures.
xviii INTRODUCTION

Belk discussed the implications of getting visual for research, teaching,

and communicating. He identified basic opportunities, threats, and
consequences of becoming visual. Several techniques for collecting visual
data were discussed in the realm of interviewing as well as observation. We
might well be entering a Golden Age of visual and multimedia marketing
research, and Belk helps us to get a good handle on it.

CHAPTERS IN THE FOURTH VOLUME

Consistent with the first three volumes, the fourth volume also features a
broad array of topics with contributions from some of the top scholars in
the field. These chapters fall under the broad umbrella of the consumer and
the firm.
Louviere and Meyer consider the literature on behavioral, economic, and
statistical approaches to modeling consumer choice behavior. They focus on
descriptive models of choice in evolving markets, where consumers are likely
to have poorly developed preferences and be influenced by beliefs about
future market changes. They call for a better alliance among behavioral,
economic, and statistical approaches to modeling consumer choice
behavior. Economic and statistical modelers can constructively learn from
behavioral researchers and vice versa.
Folkes and Matta identify factors that influence how much an individual
consumes on a single usage occasion by drawing on research in consumer
behavior as well as allied disciplines. They develop an integrated framework
to understand how, and at what stage, various factors affect usage quantity
based on Gollwitzer’s (1996) ‘‘action goals’’ model. Initially, factors such as
a product’s price and social norms influence consumption-related goals and
their perceived desirability and feasibility. In the next phase, factors such as
self-control strategies and product instructions influence the implementation
of the goal. Finally, the consumer’s motivation to use feedback, and the type
of feedback about consumption, has an influence on subsequent goal
setting.
Kumar and Luo also examine consumption, but from a modeling
perspective. In order to allocate scarce marketing resources efficiently and
effectively, it is important for a firm to know what to sell, when to sell, and
to whom. Kumar and Luo review how the purchase timing, brand choice,
and purchase quantity decisions have been modeled historically, as well as
the issues within each decision that have been addressed. A vast majority of
these studies use scanner data or transaction data. Since recent research has
Introduction xix

shown that common method variance may not be a serious problem

(Malhotra, Kim, & Patil, 2006), surveys can also be a useful source of such
data and should be increasingly employed.
Despite the interest in global branding, studies involving brand extension
strategies in foreign markets remain very limited. The fact that so few
studies exist limits our understanding of effective brand extension strategy in
a cross-cultural context. Merz, Alden, Hoyer, and Desai propose a new
conceptual framework and several propositions regarding effective global
brand extension strategy in a cross-cultural context. In doing so, they first
review more commonly examined antecedent variables of (national) brand
extension evaluation. Then, they propose a definition of culture and
subsequently review the existing cross-cultural brand extension research.
Given the growing importance of visual marketing in practice, Wedel and
Pieters review eye-tracking research in marketing and evaluate its
effectiveness. Specifically, they review eye-tracking applications in advertis-
ing (print, TV, and banner), health and nutrition warnings, branding, and
choice and shelf search behaviors. Finally, they discuss findings, identify
current gaps in our knowledge, and provide an outlook on future research.
Singh and Saatcioglu review different approaches for examining role
theory implications for boundary spanners such as salespeople, frontline,
and customer contact employees. They focus on universalistic and
contingency approaches and develop the configural approach by extending
configurational theory principles to role theory. They compare and contrast
different approaches and review literature that has remained less accessible
to marketing researchers.
John considers price contract design templates governing procurement
and marketing of industrial equipment. He argues that price format choices
precede the selection of a price level. These price formats are an integral
aspect of the institutional arrangement devised to govern an exchange. John
reviews institutions, that is, rules of interaction that govern the behavior of
actors in dealing with other actors, with a focus on their pricing elements.

CHAPTERS IN THE FIFTH VOLUME

The existence of two discrete, parallel, interactive cognitive systems

underlying human judgment and reasoning has been postulated in several
psychological and behavioral disciplines (Agarwal & Malhotra, 2005;
Malhotra, 2005). One system is relatively unconscious, based on associa-
tions, and tends to be rapid. The other system is consciously guided, based
xx INTRODUCTION

on symbolic manipulation, and tends to be slower. The two systems

generally operate in parallel, contributing interdependently to decision
outcomes. Bond, Bettman, and Luce review recent developments in
consumer behavior in terms of this dual-system paradigm. They first
examine a variety of frameworks that have been proposed, focusing on both
their commonalities and their application domains. Then, they apply these
frameworks to review selected topics from the recent marketing literature
including persuasion, metacognition, and immersive experiences.
The chasm is a well-accepted paradigm among new products marketing
practitioners that has taken root in the last decade. According to this
paradigm, the market for new products is composed of ‘‘early’’ and
‘‘mainstream’’ markets with a ‘‘chasm’’ in between them. A fundamental
premise of such an approach is that there is a communication break, at least
to some degree, between the consumers in the early adopters and the
mainstream market segment. Libai, Mahajan, and Muller examine empirical
support for the existence of a communication break in the diffusion of
innovations using aggregate product growth data, typically used in the
diffusion of innovation research. They review three alternative models due
to Bass, Rogers, and Moore. Their results provide some support for the
dual-market phenomenon and show the existence of a partial communica-
tion break. As the authors point out, aggregate adoption data are not
sufficient for answering these questions. More in-depth and disaggregate
investigation across various time points should be conducted (Kim &
Malhotra, 2005).
Rajagopalan and Bayus explore two of Eric Raymond’s key open source
product development principles embodied in the bazaar community
development model involving developers and users. They empirically
examine the relationships between project community size (‘‘eyeballs’’) and
development activity, and between development activity and product
adoption. Their analysis supports the premise that ‘‘developer eyeballs’’
are positively related to development activity and that product development
activity is significantly related to the speed of product adoption. Thus, they
find support for some key principles of the open source bazaar. However,
some of their results are contrary to the bazaar model. Therefore,
Raymond’s bazaar community development model involving developers
and users should be revised to accommodate the more typical open source
development project. Future research should explore the applicability of
different new product diffusion models to open source innovations.
The Segmentation–Targeting–Positioning (STP) process is fundamental
to the formulation of marketing strategy (Malhotra, Charles, & Uslay,
Introduction xxi

2005). DeSarbo, Blanchard, and Atalay briefly review the STP framework
and optimal product positioning literature. Then these authors present a
new constrained clusterwise multidimensional unfolding procedure for
performing STP, in which the brand coordinates are a linear function of
product characteristics. Their method simultaneously identifies consumer
segments, derives a joint space of brand coordinates and segment-level ideal
points, and creates a link between specified product attributes and brand
locations in the derived joint space. Generalizing the proposed methodology
to the analysis of nonmetric and three-way data would extend the range of
applications for this approach.
Conjoint analysis is one of the most versatile methods in marketing
research. Although this method has been popular in practice, one serious
constraint has been dealing with the large numbers of attributes that are
normally encountered in many conjoint analysis studies. Rao, Kartono, and
Su review 13 methods for handling a large number of attributes that have
been applied in various contexts. They discuss the advantages and
disadvantages of these methods. Based on their analysis, three methods,
that is, self-explicated method, partial profiles method, and upgrading
method, seem to stand out and merit consideration by researchers in this
area. Yet, no single study has systematically evaluated these potential
alternative methods in the context of a specific applied problem. It would be
worthwhile to conduct large-scale empirical and simulation studies to
compare the methods.
Laddering is a qualitative research technique that has great potential to
uncover the factors underlying consumer decision making. However, this
potential has not been realized because the time and costs of this qualitative
technique as well as the lack of standard statistical measures to assess data
and solution quality have been obstacles. Reynolds and Phillips assess the
laddering research practices of both professional and academic researchers.
They propose a set of quality metrics, and demonstrate the use of these
measures to empirically compare the traditional face-to-face interviewing
method with an online one-on-one interviewing approach.
The Internet provides marketers with an expanded set of communications
vehicles for reaching customers (Kim & Malhotra, 2005; Malhotra, Kim, &
Agarwal, 2004). Two of the important and fast-growing elements of this new
communications mix are online advertising and electronic word of mouth
(WOM). Bucklin, Rutz, and Trusov review recent research developments in
marketing that are most relevant to assessing the impact of these
communications vehicles. They first discuss the two major forms of Internet
advertising, display advertisements (also known as banners) and paid
xxii INTRODUCTION

search. Online communities, social networking sites, online referral

programs, product reviews, and blogs all allow WOM to spread faster and
farther than in the past. Research has shown how electronic records of
online WOM (e.g., product reviews) can be connected, via models, to
performance outcome variables such as product ratings and sales levels.

CHAPTERS IN THE SIXTH VOLUME

The sixth volume also reflects an eclectic mixture of theory, measurement,

data, and research methods, reinforcing the mission of Review of Marketing
Research.
The purchase of products is at the heart of much of consumer and
marketing research. Baumgartner provided a review of prior classifications
of purchase behavior discussing their strengths and weaknesses. He
proposed a new, empirically derived typology based on purchase motives.
A classification of 44 different purchase behaviors reflecting various
purchase motives yielded a typology of 8 distinct types of purchase behavior
based on three underlying dimensions. These dimensions were functional
versus psychosocial purchases, low versus high purchase involvement, and
spontaneous versus deliberate purchases. Baumgartner’s typology better
captures the important dimensions underlying different forms of buying
behavior.
Singh and Jain focused on the literature related to the measurement of
customer lifetime value (CLV). They highlighted the issues related to the
context of CLV measurement and proposed a contextual framework for
understanding and categorizing models of CLV. They also reviewed the
major models for measuring CLV in different contexts and discussed their
comparative strengths and weaknesses. Finally, they identified the key issues
that impact CLV but have not been adequately considered in modeling
CLV. These factors included network effects (e.g., WOM effects), cost of
customer acquisition, cost of managing customer relationships, cross-
selling, competition, forecasting and planning, and endogeneity of CLV
drivers.
Sriram and Chintagunta discussed learning models in the context of
consumer choice. Consumers may experience uncertainty when the agent is
new to the context or the choice set has new alternatives. Consumers resolve
uncertainty regarding products or their characteristics in such contexts by
making use of learning models. Sriram and Chintagunta provide a critical
review of the learning literature in marketing and economics, with a focus
Introduction xxiii

on models in which consumers update their beliefs in a Bayesian fashion

with the extent of updating being related to their perceived precision of the
signals that aid in such learning. They discussed several possible extensions
of the learning literature with an emphasis on biased signals, changing value
of the unknown entity, and integration of Bayesian and alternative learning
mechanisms. They also identified some directions for future research in this
area.
O’Hern and Rindfleisch discussed customer cocreation in the context of
new product development. Customers are active cocreators of the products
they buy and use, and in some cases, are capable of creating new products
with little help from firms. They identify the origins of this paradigm shift and
present a conceptual typology of four different types of cocreation activity.
Customer cocreation involves two key processes: contribution by way of
submitting content and selection by choosing which of these submissions will
be retained. Using these two processes as a foundation, the authors offer a
conceptual typology of four different forms of customer cocreation. Based on
this emerging paradigm, they offer an agenda for future research. Their
agenda focuses on the impact of customer cocreation on six distinct
domains of inquiry: (1) organizational culture, (2) organizational learning,
(3) organizational dynamics, (4) resources and capabilities, (5) customer
valuation, and (6) brand communities.
Return on marketing investment (ROMI) metric holds promise in
increasing the accountability for marketing spending. However, many
organizations experience several roadblocks to measuring ROMI and using
it to make better marketing decisions and achieve higher performance.
Pauwels and Reibstein discussed the challenges in measuring ROMI. They
defined ROMI as the incremental margin generated by a marketing program
divided by the cost of that program at a given risk level. They discussed 10
such roadblocks, gave examples, and critically examined how research has
addressed and should further address these issues.
The service-dominant (S-D) logic shifts the focus of marketing away from
the production and distribution of goods (goods-dominant logic) toward
service, the application of operant resources (knowledge and skills), as the
basis of exchange. The central tenet of S-D logic is that reciprocal service is
the fundamental basis of economic exchange, that is, service is exchanged for
service. Vargo, Lusch, Akaka, and He gave a review and assessment of the
S-D logic. They presented an S-D logic perspective of the market and
marketing and summarized its current state of development. They clarified
major theoretical misconceptions and reviewed the extension of S-D logic
and its integration with existing knowledge. They provided an assessment of
xxiv INTRODUCTION

the role of S-D logic in the evolution of academic marketing, and identified
directions for future research in this area. Initially, S-D logic was not
developed as a testable theory, and there is a great need to further develop
testable hypotheses based on the service-centered mindset. Moreover, these
hypotheses should be empirically tested in a variety of settings so that a
wealth of findings could accumulate.
Dutta, Bergen, and Ray dealt with costs of price adjustments in
marketing. They reviewed the literature in marketing and economics to
summarize what we know about the nature, magnitude, and the broad
impact of these costs. The literature on the nature and scope of these costs
has been evolving, from simple menu costs to richer decision-making,
organizational, and customer-based costs. These costs have substantial
implications for research in pricing; they influence the magnitude and
frequency of price changes, asymmetric pricing, pass-through in channels,
and price synchronization. The authors also identified some areas of
potential interest, where consideration of price adjustment costs is likely to
yield greater insights into marketing decisions for both researchers and
practitioners. Their basic conclusion was that there are significant domains
of pricing decisions that are under-researched from the perspective of price
adjustment costs. An explicit consideration of these costs should lead to
greater understanding of pricing and also to better pricing decisions.

CHAPTERS IN THIS VOLUME

Ford, West, Magnini, LaTour, and Polonsky provide a content analysis of

the Journal of Marketing (JM), the Journal of Marketing Research (JMR),
the Journal of Consumer Research (JCR), and the Journal of the Academy of
Marketing Science (JAMS) over the period 1977–2002. They survey 4,463
articles, and their analysis reveals the leading authors, institutions, and
topics. The top three authors based on publications in all the four journals
combined over the 25 years are Morris Holbrook, Elizabeth Hirschman,
and Naresh K. Malhotra. The top three authors in JM are Shelby Hunt,
George Day, and Peter Dickson. The top three authors in JMR are William
Dillion, Paul Green, and Naresh K. Malhotra. The top three authors in JCR
are Morris Holbrook, Elizabeth Hirschman, and Russell Belk. The top three
authors in JAMS are Naresh K. Malhotra, Charles Lamb, and Kenneth
Teas. The top three schools based on publications in all the four journals are
University of Pennsylvania, University of Wisconsin, and Columbia
University. The leading topics are characterized by journal. This study is
Introduction xxv

very significant because it analyzes publications in all the top marketing

journals over an extended period of 25 years.
Houston, Ratneshwar, Ricci, and Malter develop an integrative
conceptualization of how firms set and alter strategic goals, where goals
are defined as ideals of future, desired end states. They incorporate insights
from goal-setting literatures across the disciplines of marketing, manage-
ment, and psychology in an integrative manner. They offer a detailed
examination of goal-setting processes within the context of an integrative
behavioral view of the firm and shed light on the microprocesses by which
resources become intertwined with managerial processes to shape the
strategic efforts that lead to growth of the firm. They develop a framework
that accounts for the internal and external forces that impact the content of
a firm’s goals as well as the dynamic processes by which these goals are
formed and changed over time. In proposing this framework, they offer
useful insights into organizational goals that connect firm resources and
environmental context to firm strategies. They also report a case study of a
Fortune 100 communication firm’s entry into an emerging, high-technology,
new product marketplace. This case study provides illustrative data in
support of their framework.
Anderson, Simester, and Zettelmeyer investigate the problems that firms
confront when introducing an Internet channel. Their work is important as
the complexity of problems can easily lead to misinterpretations and
inappropriate corrective action. They conduct a large-scale study that
presents a unique opportunity to identify the problems and key concerns
that firms face when they transition to an additional channel of distribution,
and the solutions that make the transition successful. Their research
identified three types of problems. The Internet: (1) threatens relationships
between existing channel members, (2) leads to coordination problems, and
(3) destroys traditional segmentation criteria. Their study makes significant
contributions to the literature. It provides managers with a framework to
help anticipate and understand the challenges they can expect when
introducing an Internet channel. Furthermore, it presents a menu of
alternatives that managers can use to address the challenges when they arise.
It also provides a series of questions that managers can ask to help identify
which solutions are appropriate to their firms.
Hada, Grewal, and Lilien highlight one more ‘‘equity’’ in marketing
discipline, namely referral equity. From the perspective of a supplier, a
referral may be considered a recommendation from A (the referrer) to B (the
potential customer) that B should, or should not, purchase from C
(the supplier firm). Thus, a referral is a triadic exchange relationship among
xxvi INTRODUCTION

the referrer, potential customer, and supplier firm. The authors argue that
referrals should be viewed as part of the supplier firm’s marketing and sales
activities. They focus on three types of referrals – customer-to-potential
customer referrals, horizontal referrals, and supplier-initiated referrals. All
three types of referrals have critical roles in a potential customer’s purchase
decision. Referral equity captures the net effect of all referrals for a supplier
firm in the market. Referral equity should be viewed by supplier firms as a
resource that has financial value to the firm as it affects the firm’s cash flows
and profits. The authors offer several strategies firms can use to manage
referrals and build referral equity and outline a research agenda for the
future. By proposing the concept of referral equity, these authors link
referrals to the firm’s financial performance and thus contribute to research
on the marketing–finance interface.
Dholakia reviews research on the question–behavior effect (QBE), the
phenomenon that asking questions influences respondents’ behavior. In this
regard, he covers two distinct research streams, the self-prophecy effect that
concerns socially normative behaviors and the mere measurement effect that
deals with purchase behaviors without socially normative significance. Mere
measurement studies concern purchase behaviors that are normatively
neutral in that acting or not acting does not have socially desirable or
undesirable elements from the consumer’s standpoint. In contrast, self-
prophecy studies exclusively examine socially normative behaviors.
Although there have been recent attempts at integrating these two streams,
the author argues that there are fundamental differences between the two
effects. He also makes distinctions between laboratory- and field-based mere
measurement effects, and between normatively consistent and implicit
attitude-driven, normatively inconsistent self-prophecy effects. For the sake
of advancing knowledge regarding the QBE most efficiently, it seems
prudent to retain the distinct labels of the two effects, rather than
abandoning them in favor of the common ‘‘QBE’’ label. Dholakia reviews
key studies, offers theoretical explanations, and discusses moderators of
each effect. He identifies potentially unanswered questions and research
opportunities, and discusses significant managerial and policy implications.
Malhotra, Jain, Patil, Pinson, and Wu address one aspect of the broad
issue of the psychological foundations of the dimensions of MDS solutions
by focusing on consumer cognitive complexity. Using empirical data from
three independent studies, they show that the dimensionality of MDS
solutions is negatively related to individual differences in the level of
cognitive differentiation and integrative complexity of individuals, and
positively related to the individual’s ability to discriminate within
Introduction xxvii

dimensions. In addition, they also show that MDS dimensionality is affected

by a variety of task-related variables such as perceived task difficulty,
consistency in providing similarity judgments, confidence, familiarity, and
importance attached to the stimuli. They raise the issue of whether MDS can
be validly used to describe complex cognitive processes. Their results
indicate that it may not be appropriate to view the spatial representations
obtained by MDS as an accurate reflection of either consumers’ cognitive
structural characteristics (e.g., cognitive complexity) or the cognitive process
leading to the formation of product judgments, particularly when these
stimuli are complex and involve higher order integrative aspects.
Structural equation models are usually based on the assumption that the
data being analyzed come from a homogeneous population, so that a unique
global model represents all the observations well. However, this assumption
of homogeneity may be unrealistic in many real world applications. Like
structural equation modeling (SEM), the complementary technique of
partial least squares (PLS) path modeling helps researchers understand
relations among sets of observed variables. Rigdon, Ringle, and Sarstedt
point out that like SEM, PLS began with an assumption of homogeneity –
one population and one model – but has developed techniques for modeling
data from heterogeneous populations, consistent with a marketing emphasis
on segmentation. One way to express heterogeneity is through interactions
and nonlinear terms. Additionally, multiple group analysis and latent class
methods can also be employed. Rigdon, Ringle, and Sarstedt review these
techniques for modeling heterogeneous data in PLS. They also illustrate key
developments in finite mixture modeling in PLS using the SmartPLS 2.0
(M3) package. Heterogeneity presents both a challenge and an opportunity.
Ignoring heterogeneity can produce misleading results, and the estimated
parameter may be incorrect for every single respondent. Acknowledging
heterogeneity may well force researchers to collect larger sample sizes, so
that models can be reliably estimated for all meaningful segments. However,
this offers researchers the opportunity to better fit models to the patterns of
variance actually observed in the data, and to better understand the
underlying phenomenon. It should be pointed out that a recent study
comparing alternative approaches to SEM yielded results that indicate
caution should be exercised when using PLS (Hwang, Malhotra, Kim,
Tomiuk, & Hong, 2010).
It is hoped that collectively the chapters in this volume will substantially
aid our efforts to understand, model, and make predictions about both the
firm and the consumer and provide fertile areas for future research. The
Review of Marketing Research continues its mission of systematically
xxviii INTRODUCTION

analyzing and presenting accumulated knowledge in the field of marketing

as well as influencing future research by identifying areas that merit the
attention of researchers.

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Naresh K. Malhotra
Editor