How Conservatives and Liberals Buy Luxury Goods

SAGE is proud to feature a fascinating summary by authors Jeehye Christine Kim of Hong Kong University of Science and Technology, Brian Park of Georgia State University, and David Dubois of INSEAD. They recently published their paper, titled “How Consumers’ Political Ideology and Status-Maintenance Goals Interact to Shape Their Desire for Luxury Goods,” in the November 2018 issue of Journal of Marketing

[Reblogged from the American Marketing Association Scholarly Insights: How Conservatives and Liberals Buy Luxury Goods]

Is there such a thing as Rolex Republicans? In our new study, we say the answer is decidedly yes.

Our research team analyzed the luxury goods market, which notched $262 billion in sales in 2017, to understand an under-explored trend—how political ideology influences the purchase of high-end goods.

While marketers spend tens of millions trying to trigger aspirational buying, chances are they either don’t target consumers’ political aspirations or do so delicately. There’s a good reason—doing so could antagonize prospective buyers, with uncertain rewards. Witness athletic goods manufacturer Nike’s move to hire Colin Kaepernick as the face of its new campaign. While the company earned extensive media coverage and is experiencing a sales rebound, the move polarized other groups, such as investors.

Yet marketers may want to take note of our study, which investigates how political ideology, such as being conservative or liberal, affects buying patterns when individuals either want to maintain status or advance it. Since luxury goods is a hyper-competitive market, marketers are continually seeking ways to expand their customer base, engage with customers, and activate emotional buying triggers.

We hypothesized that since ideology shapes views about social hierarchy, it would also influence consumption behaviors related to social hierarchy. We further hypothesized that conservatives, who seek social stability, would have a greater desire for luxury goods when their status maintenance goals were activated. This study is different from past research that focuses on status maximizing as a single objective by recognizing that it has two parts: status maintenance and status advancement. However, it builds on prior research finding that conservatives differentiate themselves through products that signal they are better than others (vertical signaling), whereas liberals differentiate themselves through products that signal their uniqueness (horizontal signaling). In other words, Rolex Republican, meet Lululemon Liberal.

We conducted six studies in the U.S. market to test and validate our hypotheses. Key findings include:

– Conservatives view status maintenance as more important than liberals.

– Conservatives prefer luxury goods more than liberals when they seek to maintain social status (e.g., when their current status is high), but this behavior does not occur in the absence of a status goal or when a status advancement goal is activated.

– Conservatives with high-status positions increased luxury goods purchases, regardless of whether they attained the position via income or education.

– When conservatives are temporarily made to think about maintaining social status (e.g., via print ad message), they desired luxury goods more than liberals.

In the first study, we analyzed 21,999 consumers who bought luxury cars between October 2011 and September 2012. Of the buyers, 33% identified themselves as Republicans, 31% as Democrats, and 36% did not disclose their political affiliation.

Republicans with high socioeconomic status (SES) were 9.8% more likely to purchase a luxury car than their high-SES Democrat peers. Thus, a luxury car seller could expect to gain a 14.45% increase in sales targeting high-SES Republications than high-SES Democrats.  Subsequent studies focused on different products, including high-fashion clothing, eyewear, and headphones, validating these overall findings.

Our research empowers marketers to target consumers by political ideology, deepening their segmentation strategies for higher sales and profitability. For example, brands could run targeted marketing campaigns on conservative media platforms (e.g., Fox News); in conservative geographies (e.g., Texas); or online, targeting consumers with conservative digital footprints. If brands do not currently emphasize status maintenance messages, they could change communications to resonate with high-SES conservatives. For example, a message such as Rolex’s “Class is forever,” might motivate high-SES conservatives more than Aston Martin’s claim that cars will “add value” to their lives.

Many brands will be willing to go all-in on their desired demographic. For example, Jeep, the car most desired by Democrats, only sponsors left-leaning media. Others will likely need to toe a more nuanced line to drive sales with key demographics, without alienating others. While it may be more profitable to sell luxury goods to Rolex Republicans, it is likely that Lululemon Liberals also contribute to the bottom line.

Read the latest research from the Journal of Marketing, the Journal of Marketing Research, the Journal of Public Policy and Marketing, and the Journal of International Marketing today!

Social Media Strategists: Here Is the Science Behind Scheduling Content

[Reblogged from the American Marketing Association, Social Media Strategists: Here Is the Science Behind Scheduling Content]

Reaching customers has never been easier – or more challenging. Today’s customers are digitally wired and use social media platforms such as Facebook, Instagram, and Twitter to connect with friends, family, colleagues, influencers … and brands. In 2017, users consumed about 5.53 billion hours per day of social media content, up by 264 percent in the past five years. It’s no wonder that online ad-supported content platforms maintain a significant presence on social media. CNN, for example, posts around 47 Tweets per day. In the U.S., firms are expected to spend more than $37 billion on social media advertising by 2020.

Developing strategic social media schedules enables content platforms to generate traffic to their own websites, grow their audiences, and increase their online advertising revenues from impressions channeled through link clicks of social media posts. That’s a difficult challenge, however: the average engagement with a Facebook post is 0.16 percent; with Instagram, 1.73 percent; and Twitter, 0.046 percent. A new study in the Journal of Marketing seeks to boost social media profitability by providing managers with the tools they need to fine-tune scheduling to their goals.

Content platforms need to consider issues such as when to post content, how much content to post, and how much to spend on targeted content advertising (TCA). While social media is integral to brands’ digital growth, there is little research literature to guide managers’ scheduling strategies. A social media manager charged with posting 10 stories in one day with a budget to promote four of them can position the posts in more than seven trillion ways. While existing software can help with automating the publishing of messages on multiple social media platforms, it does not address optimal scheduling of posts for a social media platform and budgeting for targeted content advertising.

Our research team drew from literature on circadian rhythms in information processing capabilities to build a novel theoretical framework on social media scheduling and explain how scheduling attributes affect the link clicks metric. We hypothesized that most users’ working memory availability would be highest in the morning, lowest in mid-afternoon, and moderate in the evening and that their desire to engage with content would follow the same pattern. We also hypothesized that the use of TCA and content type (such as content with high-arousal emotions or content requiring high cognitive processing) would differentially affect link clicks by time of day.

We tested our hypothesis using a model based on 366 days of Facebook post data from a top-50 U.S. newspaper, totaling 5,706 posts. We also built an algorithm that allows social media managers to optimally plan social media content schedules and maximize gross profits.

Our study findings suggest that online ad-supported content platforms such as CNN, ESPN, and Wall Street Journal can significantly enhance their profits by posting content that follows the biological responses of their audiences’ sleep-wake cycles and help them target content types to when the audience is most naturally receptive to it.

Key findings include:

– We reaffirm commonly held wisdom that time of day is crucial to engagement. For example, posting content in the morning resulted in an 8.8 percent increase in link clicks over posts scheduled for the afternoon and 11.1 increase over those scheduled in the evening.

– The algorithm demonstrates the impact of time of day, TCA, and content type on link clicks and how these variables interact. For example, we demonstrate that employing TCA in the afternoon generates 21 percent more link clicks than doing so in the morning. TCA at night decreases link clicks by 9.7 percent, leading to advertising losses.

– Posting content that contains high-arousal negative emotions in the morning is 1.6 percent more effective at generating link clicks than posting it in the afternoon or evening.

– We present a novel optimizer that works as a decision-support tool for social media managers to help them schedule content on social media more profitability. For example, simply arranging posts without allocating additional budget for TCA can help the firm increase gross profits by 8 percent.

​Our research will help managers optimize their companies’ social media strategies by making posting decisions based on brain science as opposed to “spray and pray” techniques or arbitrary rules of thumb. About 73 percent of the managers we interviewed were interested in using this tool to improve scheduling effectiveness.

In addition, this research can help these managers make a case for targeted advertising investments and then allocate budgets effectively across multiple initiatives, using data to drive profitability. Given that companies are increasingly running analytics-driven businesses, these metrics and tools can help win approval for strategies, defend budgets, and deliver on commitments.

Read the full article.

From: Vamsi Kanuri, Yixing Chen, and Shrihari Sridhar, “Scheduling Content on Social Media: Theory, Evidence and Application,” Journal of Marketing, 84 (November).​

Read the latest research from the Journal of Marketing, the Journal of Marketing Research, the Journal of Public Policy and Marketing, and the Journal of International Marketing today!

Read the Latest Issue of the Journal of International Marketing!

We are excited to feature the latest issue of the Journal of International Marketing!

Journal of International Marketing is a peer-reviewed journal that is dedicated to advancing international marketing practice, research, and theory. Contributions addressing any aspect of international marketing are welcome. Aimed at both international marketing/business scholars and practitioners at senior- and mid-level international marketing positions, the journal’s prime objective is to bridge the gap between theory and practice in international marketing.

The newest issue features fascinating research ranging from global and market exports. Here are the abstracts of a few of these articles:

Global Versus Local Consumer Culture: Theory, Measurement, and Future Research Directions

The last few decades have seen the emergence of global consumer culture (GCC) as an important force in the marketplace. Yet, in recent years, powerful political and economic forces suggest that globalization might be stalling, leading to renewed interest in local consumer culture (LCC). This article provides an overview of where the field of international marketing stands on GCC and LCC, and it presents new empirical insights. It elaborates on the roots of GCC and LCC in consumer culture theory, cultural globalization theory, and acculturation theory. This background information sets the context for an in-depth discussion of how international marketers have operationalized consumer attitudes toward GCC and LCC, and their individual-level and national-cultural correlates. The article addresses behavioral and managerial consequences of GCC and LCC and concludes with areas for future research.

Spatial Distance Construal Perspectives on Cause-Related Marketing: The Importance of Nationalism in Russia

Consumers around the globe expect firms to contribute to environmentally and socially responsible causes. Using construal level theory with a spatial distance lens, we examine effects of spatial proximity of the firm (domestic firm vs. foreign multinational corporation [MNC]), cause (domestic vs. global), and consumer cultural identity (locally oriented: nationalism and consumer ethnocentrism; distantly oriented: global identity and global citizenship through global brands) on consumer attitudes toward the firm. Across three studies with a focus on Russia and environmental causes, we consistently find that nationalism moderates consumer attitudes, whereas consumer ethnocentrism, global identity, and global citizenship through global brands do not. When firms engage in cause-related marketing and focus on proximal causes, nationalistic consumers are more favorable toward domestic firms (vs. foreign MNCs). When firms are not engaged in cause-related marketing, consumers with stronger nationalism are more favorable toward domestic firms, and consumers with weaker nationalism are more favorable toward foreign MNCs. Importantly, the effects of nationalism are mitigated when foreign MNCs and domestic firms engage with global causes. Product involvement, environmental concerns, and marketplace skepticism are predictors of attitudes toward the firm. The results highlight the importance of considering the socio-historical-political context of a given country and locally oriented nationalistic beliefs.

Organizing and Implementing Export Pricing: Performance Effects and Moderating Factors

Relatively little is known about pricing in the export business, particularly how to organize and implement export pricing within firms and how these issues affect export performance. Therefore, this study investigates antecedents of export performance, specifically the organizational aspects of export pricing and price adaptation and the moderating role of export market characteristics, including export market turbulence, enforcement of contracts, and corruption ranks of the export market. Using a large-scale survey sample of 295 exporting firms in Austria and Germany and secondary data on the export markets involved, the authors show that both the intensity of internal pricing coordination and price adaptation have a positive effect on export performance. Specifically, in highly turbulent export markets, the intensity of internal pricing coordination contributes to export performance. Furthermore, a high level of horizontal dispersion of pricing authority is advisable in countries in which the enforcement of contracts is difficult.

Read the entire issue here!

To submit to the journal click here!

Now at SAGE! Journal of International Marketing

SAGE is proud to partner with the American Marketing Association (AMA), the largest chapter-based marketing association in the world and the essential community for marketers.

The Journal of International Marketing is a peer-reviewed journal dedicated to advancing international marketing practice, research, and theory. Aimed at both international marketing/business scholars and practitioners at senior- and mid-level international marketing positions, the journal’s prime objective is to bridge the gap between theory and practice in international marketing. Ranked 32 out of 140 in Business, the journal has an impact factor of 3.600.

Explore a few articles from the latest issue

How Can International Ventures Utilize Marketing Capability in Emerging Markets? Its Contingent Effect on New Product Development by Min Ju, Jason Lu Jin, and Kevin Zheng Zhou

The Interface of International Marketing and Entrepreneurship Research: Review, Synthesis, and Future Directions by Man Yang and Peter Gabrielsson

A Cross-National Study of Evolutionary Origins of Gender Shopping Styles: She Gatherer, He Hunter? by Charles Dennis, J. Joško Brakus, Gemma García Ferrer, Charles McIntyre, Eleftherios Alamanos, and Tamira King

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Structuring Big-Event Price Promotions for Success

SAGE is proud to feature a fascinating summary by authors Wiebke I.Y. Keller, Barbara Deleersnyder, and Karen Gedenk. They recently published their paper, titled “Price Promotions and Popular Events,” in the January 2019 issue of Journal of Marketing

[Reblogged from the American Marketing Association Scholarly Insights: Structuring Big-Event Price Promotions for Success]

Companies spend significant sums to increase brand awareness at popular events such as the Superbowl, the Olympics, or the FIFA World Cup. In addition to advertising, firms occasionally run price promotions at local retailers. But is this actually a good idea?

A new study in the Journal of Marketing examines consumers’ responses to price promotions during popular events, comparing them to non-event times. Our research team examined 242 consumer packaged goods (CPG) brands and their price promotions during five popular events held in the Netherlands between 2007 and 2011. Since sales promotions constitute a large portion of CPG manufacturers’ total marketing budgets – up to 55% in the U.S. – getting higher-spend event promotions right is core to a brand’s success.

Our team built a multiplicative sales response model that we extended into a hierarchical linear model structure to analyze relative promotion response across brands and events. This research is quite innovative. Past price-promotion research has focused instead on timing of promotions relative to competitors or price and sales patterns related to seasonal and holiday demand cycles.

Key findings include:

– Price promotions offered around popular events often generate a stronger response than the same promotion at non-event times. The price-promotion elasticity is 9.3% larger, on average, during events. 

– In our study, consumer response varied with events. Sales lift ranged from 2.68 for Summer Olympics promotions to 5.44 for Winter Olympics promotions compared to an average sales lift of 3.45 at non-event times.

– Only two out of every four price promotions around events is on target, with promotion activity increasing with a stronger consumer response during events. For one in four, promotion activity is more intense during events, while sales response is tepid, leading to overspending. For the final one in four, promotion activity is less intense even as sales surge, leading to missed sales opportunities.

– Managers should integrate event promotions into their broader marketing campaigns, using advertising and other sponsorship activities to drive event price promotion awareness. This is especially true for event sponsors. In our study, only 8.71% of price promotions during events were supported by advertising.

– Premium-priced brands benefit more from shifting their promotions towards events than brands with a lower price premium. Thus, managers should select brands for event promotions based on brand equity (reflected in relative price) rather than brand popularity.

– While managers often choose to run price promotions in conjunction with high-fit events, competitors do likewise. As a consequence, stores are often cluttered with displays and shelf-tags, potentially reducing promotion impact by lowering consumer brand recognition and recall and product sales.

– Low-fit events can also work if brands exploit the element of surprise and provide an event link.

– Brands should avoid being “stuck in the middle,” where event promotions may be seen as part of the event itself, leading to consumer confusion and lower sales.

– To enhance promotion response, managers should carefully choose the right brand-event combinations. They should reallocate promotions towards an event only if brands have a stronger promotion response during that time. The study provides guidelines for which brands, events, and contexts it is beneficial to use price promotions during big events.

Brand managers can use our research to determine whether to run price promotions in conjunction with a specific popular event, which brands are best suited for these promotions, and how to structure these promotions. They also can use insights to decide how to embed events in larger marketing strategies and how much to allocate to these campaigns.

Finally, retailers can use this research to determine which brands to select for price promotions to drive customer response and deliver an exceptional experience.

Read the latest research from the Journal of Marketing, the Journal of Marketing Research, the Journal of Public Policy and Marketing, and the Journal of International Marketing today!

Read the Latest Issue of the Journal of Public Policy & Marketing!

We are excited to feature the latest issue of the Journal of Public Policy & Marketing!

Journal of Public Policy & Marketing (JPP&M) is the premier academic and professional journal that chronicles and analyzes the joint impact of marketing and governmental policies and actions on economic performance, consumer welfare, and business decisions. Written for concerned marketing scholars, policymakers, government officials, legal scholars, practicing attorneys, and executives, JPP&M examines the interface between marketing and public policy and the functioning and performance of the nation’s economy.

The newest issue features fascinating research ranging from Subsistence Marketplaces to Challenges to Native Advertising. Here are the abstracts of a few of these articles:

Subsistence Marketplaces: Challenges and Opportunities

This introductory article is a biennial exercise to reflect on the stream of subsistence marketplaces as a prelude to the special section on this topic following the Sixth Subsistence Marketplaces Conference in 2016. The call for papers was not restricted to conference presentations. At the end of the review process, the special section contained four articles spanning a diverse set of topics. The authors provide an overview of the subsistence marketplaces stream and a background of the conference series. This is followed by a brief introduction to the special issue. They then discuss the what, how, and why for past and future work on subsistence marketplaces.

Living the African Dream: How Subsistence Entrepreneurs Move to Middle-Class Consumer Markets in Developing and Emerging Countries

The subsistence marketplaces literature has generated many insights on how the marketplaces of the poor function. One important issue that has remained understudied is how microentrepreneurs who start their career in poverty manage to break the status quo of subsistence marketplaces and obtain a stable position in the middle classes of developing and emerging countries. This article therefore investigates the business trajectories of entrepreneurs who have entered middle-class markets. The study shows that business development from lower-income to middle-class consumer markets is a stepwise process. Microentrepreneurs begin by serving relatives and acquaintances from their homes, then serve customers that they meet out on the street, and then upgrade their value propositions to target middle-class customers. Some of them further increase their businesses by entering business markets. From a strategic marketing perspective, the authors analyze the changes in resources and stakeholders that underlie the upgrades of the value propositions. The results provide implications for policy makers to create new jobs, generate tax revenues by formalizing businesses, and foster social mobility in emerging markets.

The Challenges Native Advertising Poses: Exploring Potential Federal Trade Commission Responses and Identifying Research Needs

Native advertising is a new form of online advertising that appears in many settings, such as blogs, social media, and entertainment and news publications. Native ads typically blend with their surrounding context, stem from sources or placements that do not signal advertising, lack overtly persuasive or sales-focused messaging, and have less clear material outcomes. Such characteristics raise ethical concerns because native ads are more difficult for consumers to identify and because they challenge concepts that are central to current deceptive advertising policy. Native advertising is a Federal Trade Commission enforcement priority, and the agency has developed guidelines for this new ad form. However, the unique characteristics of native advertising likely require novel approaches to protect consumers. In this article, the authors trace the evolution of regulation relevant to native advertising. They identify shortcomings and propose remedies that the Federal Trade Commission or industry could adopt to prevent consumer harm, detect infractions, and enforce its regulations. The authors also develop an agenda for future research needed to more fully inform public policy and industry response in this arena.

Read the entire issue here!

To submit to the journal click here!

Kelly Hewett Named Journal of International Marketing Editor in Chief Designate!

[Reblogged from the American Marketing Association. Click here for the original post]

The American Marketing Association is pleased to announce the selection of Kelly Hewett as the next Editor in Chief of the Journal of International Marketing. Her four-year term formally begins on July 1, 2019. Most recently ranked 32/140 in business journals with a 2017 Impact Factor of 3.600, Journal of International Marketing is dedicated to advancing international marketing practice, research, and theory. Aimed at both international marketing/business scholars and practitioners at senior- and mid-level international marketing positions, the journal’s prime objective is to bridge the gap between theory and practice in international marketing.

Kelly Hewett is Associate Professor of Marketing at the University of Tennessee’s Haslam College of Business. Prior to joining UT, she worked for five years at Bank of America, where she was a senior vice president in the firm’s corporate marketing group. Previously, she had a ten-year academic career and also held prior positions in international marketing and marketing research.

Hewett’s research has been published in the Journal of Marketing, the Journal of International Business Studies, the Journal of the Academy of Marketing Science, the Journal of International Marketing, and the Journal of Management Studies, among others. She has served as an Associate Editor for the Journal of International Marketing and serves on the Editorial Review Board for the Journal of Marketing, the Journal of International Business Studies, the Journal of the Academy of Marketing Science, and the International Journal of Research in Marketing.

Hewett has received numerous awards and recognitions for her research, teaching, and service. She has served as a Corporate Trustee for the Marketing Science Institute and as a member of the boards for the Marketing Strategy and Global Marketing Special Interest Groups for the AMA. She currently leads several study-abroad experiences for both graduate and undergraduate students, teaches a Ph.D. seminar on marketing strategy, and teaches in the full-time, Executive, and Professional MBA programs.

“It is a great honor to have been selected as the incoming editor of Journal of International Marketing,” said Hewett. “I am thrilled to be able to leverage my broad-based experience in both marketing and international business, and as both an academic and a practitioner, in helping shape the future of the Journal. My goal is to build on JIM’s legacy in the discipline, and I am committed to publishing high-quality substantive research in international marketing that bridges the gap between theory and practice.”
Hewett takes the reins of the Journal of International Marketing from Constantine S. Katsikeas, who has served as Editor in Chief for nearly six years. The AMA Global Support Center is appreciative of Katsikeas’s incredible stewardship. Originally recruited to fill a three-year term, Katsikeas was asked to remain in the role for an additional three years. Katsikeas and Hewett will work closely to coordinate a smooth transition. Hewett will begin overseeing manuscript review for new submissions starting on April 1, 2019, and be responsible for all new submissions starting on July 1, 2019.

The selection committee consisted of David Griffith (Texas A&M University), Bryan Lukas (University of Manchester), Cheryl Nakata (University of North Carolina at Greensboro), Gaia Rubera (University of Bocconi), Goksel Yalcinkaya (University of New Hampshire), Matt Weingarden (American Marketing Association), and David Stewart (Chair in his role as Vice President of Publications for AMA and Loyola Marymount University).

About the American Marketing Association (AMA)

As the largest chapter-based marketing association in the world, the AMA is trusted by marketing and sales professionals to help them discover what’s coming next in the industry. The AMA has a community
of local chapters in more than 70 cities and 350 college campuses throughout North America. The AMA is home to award-winning content, PCM® professional certification, premiere academic journals, and industry-leading training events and conferences.

Follow the AMA at @AMA_Marketing.

Read the latest research from the Journal of Marketing, the Journal of Marketing Research, the Journal of Public Policy and Marketing, and the Journal of International Marketing today!