--- (1994 December), "Building A Brand: The Saturn Story," California
Management Review, 36, 114-133.
In January 1985, Saturn Corp. was announced by General Motors' (GM) Chairman Roger Smith, who called it the key to GM's long-term competitiveness, survival, and success as a domestic producer. Within its first 2 years, Saturn created one of the strongest automobile brands. How and why GM was able to accomplish this unique feat is explained. This feat involved creating a world-class product, developing a team-oriented organization outside the GM fold, selling the company not the car, creating a new retailing strategy and relationship with the customer, and a consistent communication effort. Ironically, Saturn's success raises difficult strategic issues as to its future management and its role in the future of GM. The Saturn story is thus not only about how GM created a strong brand under adverse circumstances, but about how to handle success.
Aaker, David A., and Robert Jacobson (1994 July), "Study Shows Brand-building
Pays Off For Stockholders," Advertising Age, 65, 18.
Research shows that brand building for 34 major US corporations paid off where it really counts - for the shareholder. Making use of the Equitrend database created by Total Research Corp., the researchers examined the extent to which brand equity provides information about firm performance that influences stock prices above and beyond that contained in current-term return on investment (ROI). It was found, as widely acknowledged, that stock return is positively related to changes in ROI. It was also found that changes in brand equity matter, too. While not quite as large as the response to ROI, the results depict a strong positive association between brand equity and stock return. The results suggest that the conventional wisdom - that the financial community downplays non-financial measures - needs to be examined closely.
--- (1994 May), "The Financial Information Content Of Perceived Quality,"
Journal of Marketing Research, 31, 191-201.
A study investigates whether movement in a firm's stock price, that is, a measure of firm value, is associated with information contained in perceived quality measures. In a model that also allows for the effect of economywide factors and a firm's return on investment, a positive relationship is found between stock return and changes in quality perceptions. These results imply that the quality measure contains information, incremental to that reflected by current-term accounting measures, about future-term business performance. It is suggested that managers should convey information to the stock market, such as the brand's quality image, useful in depicting the long-term prospects of the business. By doing so, the stock market will rely less on short-term measures of business performance, and managers will be freer to undertake strategies necessary for ensuring the long-term viability of their firms.
Jacobson, Robert, and David Aaker (1993 October), "Myopic Management Behavior
With Efficient, But Imperfect, Financial Markets: A Comparison Of Ifnormation
Asymmetries In The U.s. And Japan," Journal of Accounting &
Economics, 16, 383-405.
Often the strategies that enhance the long-term competitiveness of a firm diminish current-term earnings. Because stock market participants rely on current-term results as indicators of long-term performance, managers typically have incentives in the presence of asymmetric information about business performance to behave myopically. Differences in timing between the US stock market and the Japanese stock market in impounding accounting information are empirically assessed, in an effort to gain insights into possible cross-national differences in asymmetric information between managers and investors. The results indicate that the Japanese stock market incorporates information earlier than does the US stock market. This is consistent with the hypothesis that Japanese investors are better informed than their US counterparts. It is suggested that larger information asymmetries in the US may be creating incentives for a short-run management style that is detrimental to long-term competitiveness.
Stayman, Douglas M., and David A. Aaker (1993 May), "Continuous Measurement Of
Self-report Of Emotional Response," Psychology & Marketing, 10,
A promising method recently introduced in the measurement of emotional responses to advertising has been the continuous measurement of specific feelings through a "warmth monitor" introduced by Aaker, Stayman, and Hagerty (1986). Research extending their work in 2 ways is reported. First, it tests whether the warmth monitor method distinguishes feelings from the global reactions that are more commonly measured with continuous self-report measures. Second, it tests the extension of the method to a general emotion monitor that measures feelings other than warmth. Support is found for the discrimination of feelings and overall liking. Support was found for the validity of a humor, but possibly not an irritation, monitor.
Aaker, David A., and Kevin Lane Keller (1993 March), "Interpreting
Cross-cultural Replications Of Brand Extension Research," International
Journal of Research in Marketing, 10, 55-59.
A replication in New Zealand by Sunde and Brodie (1993) of one portion of the Aaker and Keller (1990) brand extension research supports some of the results of the latter. However, Aaker and Keller's finding that extension evaluations would be a function of the interaction of the core brand perceived quality and extension fit and perceptions of the difficulty of making the extension product does not emerge in the replication. The quality fit interaction is clarified by noting that it depends upon the amount of stretch that is involved in the extension. In addition, other possible explanations for the apparent discrepancy such as differences in procedure, stimuli, and culture are discussed.
Jacobson, Robert, and David A. Aaker (1993 March), "Composite Dependent
Variables And The Market Share Effect," Marketing Science, 12, 209-212.
Farris, Parry and Ailawadi (1992; FPA) demonstrate that bias can arise in a regression involving a composite dependent variable where a subset of components of the dependent variable are used as explanatory factors. They correctly observe that the Jacobson and Aaker (1985; JA) model has explanatory factors that are also components of the ROI dependent variable and, as such, subject to composite variable bias. However, FPA's attempt to replicate JA's analysis and assess composite variable bias is flawed by a mistake in their analysis, that is, their disaggregate models do not follow the JA aggregate specification. The purpose of the note is to correctly assess the extent to which the JA estimate of the market share effect is affected by composite variable bias and to suggest approaches for modeling a composite dependent variable in the presence of unobservable factors.
Aaker, David A. (1992 September), "Managing The Most Important Asset: Brand
Equity," Planning Review, 20, 56-58.
There are 2 major reasons why companies should build strong brands. The first is that in American businesses, strategists have become too focused on managing short-term financials and designing cost and sales programs, rather than learning how to build and manage assets that will pay off in the future. Second, companies that have strong brands have an alternative to competing on price and specifications. A strong brand has 4 dimensions: 1. awareness, 2. associations, 3. perceived quality, and 4. brand loyalty. Every company, in developing a measure for its brand equity, must think through where it stands on each of these dimensions. In building a strong brand, there are 5 considerations that are helpful: 1. a clear identity, 2. a corporate brand, 3. integrated, consistent communications, 4. customer relationships, and 5. symbols and slogans. These 5 elements are valuable assets that can be keys to reevaluating and developing corporate strategy.
--- (1992 July), "The Value Of Brand Equity," Journal of Business
Strategy, 13, 27-32.
Investment to build or maintain strong brands can be difficult to justify when considering the short-term financial outlook. However, brand equity generates considerable value for a company. Brand loyalty is a key consideration when placing a value on a brand because a loyal customer base can be expected to generate a predictable sales and profit stream. It generates value mainly by reducing marketing costs. These brand assets can create value for a firm by: 1. enhancing the efficiency and effectiveness of marketing programs, 2. providing higher margins for products by permitting premium pricing and reducing reliance on promotions, 3. strengthening brand loyalty by increasing customer satisfaction and providing reasons to buy the product, 4. providing higher margins for products by permitting premium pricing and reducing reliance on promotions, 5. providing a platform for growth by brand extensions, and 6. giving leverage in the distribution channel.
Aaker, David A., and Douglas M. Stayman (1992 May), "Implementing The Concept
Of Transformational Advertising," Psychology & Marketing, 9,
According to Wells (1980) and Puto and Wells (1984), transformational advertising is advertising that works primarily by developing associations with the brand use experience that transforms that experience into something different than it would be in the absence of advertising. Transformational advertising creates, alters, or intensifies feelings that occur with the brand use experience. However, transformational advertising is extremely difficult to test and use empirically for several reasons, including that there is a hypothesized interaction between the use experience and the exposure. Nevertheless, the transformational model of advertising effects has shown considerable promise in providing insight into an important class of advertising. The study suggests that there may be a useful role for projective techniques in advancing the understanding of how and when transformational advertising works through focusing on use experiences and attempting to control for possible intervening effects of more general attitudes.
Aaker, David A. (1992 April), "Whatever Happened To . . .," Across the
Board, 29, 29-31.
Executives often fail to recognize that delivering high quality is not enough to gain a marketplace advantage; there must be a perception among customers that high quality exists. Profits for the Joseph Schlitz Brewing Co. fell steadily, from $48 million in 1974 to a negative $50 million in 1979. In Schlitz's Milwaukee plant in 1974, the "accelerated batch fermentation" process was finally put in production after 10 years of development. For some time the company had reduced costs by substituting corn syrup for barley malt. The fact that Schlitz was attempting to save money by going to less-expensive ingredients and processes was difficult to keep quiet and defend, especially since Anheuser-Busch Cos. had made the explicit decision to keep using the more expensive ingredients. In addition, Schlitz's CEO died in 1977, and legal problems in 1978 led to the loss of 4 top marketing people. Still, the collapse of the Schlitz brand equity was caused largely by the loss of the perceived quality of the product. This loss turned out to be irreversible.
Keller, Kevin Lane, and David A. Aaker (1992 February), "The Effects Of
Sequential Introduction Of Brand Extensions," Journal of Marketing
Research, 29, 35-50.
A laboratory experiment examined factors affecting evaluations of proposed extensions from a core brand that has or has not already been extended into other product categories. The perceived quality of the core brand and the number, success, and similarity of intervening brand extensions, by influencing perceptions of company credibility and product fit, were hypothesized to affect evaluations of proposed new extensions and evaluations of the core brand itself. The results indicated that evaluations of a proposed extension when there were intervening extensions differed from evaluations when there were no intervening extensions only when there was significant disparity between the perceived quality of the intervening extension and the perceived quality of the core brand. A successful intervening extension increased evaluations of a proposed extension only for an average quality core brand. An unsuccessful intervening extension decreased evaluations only for a high quality core brand.
Aaker, David A. (1990 September), "How Will The Japanese Compete In Retail
Services?," California Management Review, 33, 54-67.
In the Japanese retail service sector, efficiency and customer service have long been common objectives of quality control circles. Therefore, it seems reasonable that Japanese firms could enter the US market and dominate competitors by implementing methods and programs that have been established and proved in Japan. To test this hypothesis, a study was carried out of 8 Japanese firms from 3 industries - banking, hotels, and automobiles - that have major retail operations in both California and Japan. In Japan, firm operations are characterized by, among other things, personalized off-site service, a customer service culture supported by detailed training, and labor-intensive service. It was found that Japanese firms do not export their service systems and culture to the US despite the fact that they are engaged in difficult competitive arenas. Two principal explanations emerged: 1. The firms feel that the Japanese approach is not feasible in the US. 2. There is a clear lack of motivation to do so even assuming that it is feasible.
Aaker, David A., and Douglas M. Stayman (1990 August), "Measuring Audience
Perceptions Of Commercials And Relating Them To Ad Impact," Journal of
Advertising Research, 30, 7-17.
Audience perceptions of commercials were measured and related to the impact of the advertisements. A data set of 80 commercials shown during a one-week sweep was tested using the Bruzzone Research Corp. mail questionnaire method with an augmented adjective list and advertisement liking and ad effectiveness scales. Nine dimensions emerged from an individual level factor analysis. When individuals in the data set were aggregated across commercials, 5 factors emerged instead of 9. The implication is that relevant and useful information is lost when the data are aggregated across individuals. The hypothesis that there would be a link between the type of ad and the factors that would affect ads of that type was not supported. The results in assessing the importance of different dimensions of audience perceptions on ad outcomes suggest that a search for the ultimate model or diagnostic test based on perceptual factors will likely be futile.
Aaker, David (1990 June), "Brand Extensions: The Good, The Bad, And The Ugly,"
Sloan Management Review, 31, 47-56.
During the last decade, brand extensions have been the core of strategic growth for a variety of companies. The general perception of quality linked with a name is a key ingredient in a brand's successful extension. When a brand name is added just to provide recognition, credibility, and a quality association, there is often a significant risk that, even if initially successful, a brand extension may be vulnerable to competition. Extensions can and should enhance the core brand, but there is a risk that an extension could stimulate negative attribute association. The extension must fit the brand; a meaningful association that is common to the brand and the extension can provide the basis of fit. An extension usually will create new brand associations, some of which can hurt the brand. The brand association created by the extension can also obscure a sharp image. Possibly, the worst potential result of an extension is a foregone opportunity to create a new brand equity.
Aaker, David A., and Kevin Lane Keller (1990 January), "Consumer Evaluations Of
Brand Extensions," Journal of Marketing, 54, 27-41.
Two studies were conducted to obtain insights on how consumers form attitudes toward brand extensions. In the first study, reactions to a set of 6 actual brands and 20 hypothetical brand extensions were gathered from 107 undergraduate business students who participated in the study as part of a course requirement. Results showed that attitude toward the extension was higher when: 1. there was a perception of "fit" between the 2 product classes along one of 3 dimensions and a perception of high quality for the original brand, or 2. the extension was not regarded as too easy to make. A 2nd study examined the effectiveness of different positioning strategies for extensions by using basically the same procedure as the first study. The 121 student participants came from a different semester's course offering. Findings show that potentially negative associations can be neutralized more effectively by elaborating on the attributes of the brand extension than by reminding consumers of the positive associations with the original brand.
Aaker, David A. (1989 December), "Managing Assets And Skills: The Key To A
Sustainable Competitive Advantage," California Management Review, 31,
The assets and skills of a business provide the basis of a sustainable competitive advantage and long-term performance. The essence of strategic management should be the development and maintenance of meaningful assets and skills, the selection of strategies and competitive arenas to exploit these assets and skills, and the neutralization of competitors' assets and skills. The management of assets and skills involves 3 steps. The first step is the identification of relevant skills and assets by observing successful and unsuccessful firms, key customer motivations, large value-added items, and mobility barriers. The 2nd step is the selection of those skills and assets that will provide an advantage over competitors, that will be relevant to the market, and that will be feasible, sustainable, and appropriate for the future. The 3rd step involves the development and maintenance of those assets and skills and the neutralization of those of competitors.
Mascarenhas, Briance, and David A. Aaker (1989 September), "Mobility Barriers
And Strategic Groups," Strategic Management Journal, 10, 475-485.
A procedure for identifying strategic groups, which is based upon mobility barriers, is recommended and illustrated. The sample of 679 oil-well drilling firms were cluster-analyzed on 3 variables - depth, offshore, and international - using the nearest centroid sorting methods that are efficient for use with large data sets. The results suggest credibility for the strategic group concept motivated by mobility barriers in the oil-well drilling industry. A high degree of group stability was observed; only 2 out of 109 potential moves occurred, indicating that mobility barriers did exist and that the strategic groups were stable. The study also suggests that the selection of strategic, group-defining variables can be idiosyncratic to an industry. Strategic group theorists have posited that more protected groups will have higher profitability. However, this pattern of return or risk-adjusted return across groups was not observed. The point that mobility barriers may be asymmetrical with respect to groups was demonstrated in this industry.
Stayman, Douglas M., David A. Aaker, and Donald E. Bruzzone (1989 June), "The
Incidence Of Commercial Types Broadcast In Prime Time: 1976-1986," Journal
of Advertising Research, 29, 26-33.
A sample of 855 prime-time network commercials that were posttested during the period 1976-1986 and that were segregated by type of commercial on the basis of adjectives that respondents used to describe the commercials is examined using cluster analysis in order to study the incidence of various commercial types. The sample consists of all prime time commercials that ran for at least 4 weeks and that were aired during test weeks spread over the target time period. Just under half (45.5%) of the commercials either provide relatively low levels of reaction or a mildly informative reaction. Over half the commercials have a reaction that would be associated with a feeling response. The amusing-entertaining and warm clusters together involve 45.6% of all the commercials in the sample. Another 7.4% of the commercials are classified as irritating. Some meaningful differences are found across product groups, with consumer nondurable products having a lower incidence of information advertisements and a higher incidence of amusing-entertaining and warm ads.
Mascarenhas, Briance, and David A. Aaker (1989 May), "Strategy Over The
Business Cycle," Strategic Management Journal, 10, 199-210.
An analytical and empirical framework for examining strategy over the business cycle is developed. The data were drawn from the oil-well drilling business for the 1973-1983 period. Strategic groups were identified through a cluster analysis. Companies were observed to adjust their strategies significantly and asymmetrically over business cycle stages. No consistency was found in performance between up markets and down markets. Higher performers during an up market did not consistently achieve higher performance in a down market or lower performance in a down market. A variable-parameter profitability model of strategy in a cyclical industry indicates the importance of a strategy's contemporaneous and intertemporal relationships with performance. Discrepancies were observed in actual strategies and optimal strategies over business cycle stages. For example, though a counter-cyclical investment strategy was observed to enhance profitability, few firms practiced this strategy.
Stayman, Douglas M., and David A. Aaker (1988 December), "Are All The Effects
Of Ad-induced Feelings Mediated By A Subscript Ad?," Journal of Consumer
Research, 15, 368-373.
The conditions under which attitudes toward the advertisement (AAd) may not mediate completely the impact of feeling responses on persuasive communications are investigated. Warmth, amusement, and irritation are the 3 different specific feeling responses considered. Different exposure levels are used to evaluate the mediating role and AAd over repetition. Subjects were 116 undergraduates, and the design used was a multiple factor repeated measure latin square design. Each subject viewed each of 6 ads at one of 3 frequency levels (one, 2, or 3 exposures per program). Each group of 3 or 4 participants was exposed to the 4 programs in 3 sessions, each separated by one week. A preexposure questionnaire included measures of brand attitudes. Feelings during ads were evaluated through 7-point scales. A series of regressions was run to assess the mediating role of AAd. Results suggested that, for at least some kinds of ad executions, especially those at relatively low exposure levels, ad attitudes did not mediate all of the effect of feeling response.
Jacobson, Robert, and David A. Aaker (1987 October), "The Strategic Role Of
Product Quality," Journal of Marketing, 51, 31-44.
Managers of US companies increasingly are making adjustments to improve product quality. However, relatively little empirical work has been undertaken to quantify the impact of product quality on profitability or other strategic variables. An attempt is made to examine the role of product quality to determine its applicability as a means of gaining a comparative advantage. It is argued that only by allowing for the possibility of feedback between quality and other strategic factors and controlling for firm-specific effects can the role of quality and key hypotheses be evaluated. Using the Profit Impact of Market Strategy (PIMS) database, feedback interactions between product quality and other strategic variables are detected. An overall implication of the analysis is that there is a wide range of strategies based on quality from which a firm might choose. The results suggest the importance of product quality and that the successful implementation of a quality strategy can facilitate increased profitability.
Aaker, David A., and Robert Jacobson (1987 June), "The Role Of Risk In
Explaining Differences In Profitability," Academy of Management Journal,
A study was conducted to examine the role of risk in explaining cross-sectional differences in the profitability of strategic business units (SBU). By applying suggestions of financial theory, risk was disaggregated into 2 components (systematic and unsystematic), which were hypothesized by the capital asset pricing model to have different effects on return. The Profit Impact of Market Strategies (PIMS) database was used because it offered the best opportunity to study the trade-offs between risk and return at the SBU level. All the businesses in the PIMS database that had 5 to 13 annual data points were included in the study. This yielded a total sample of 1,376 businesses. Results indicated that both systematic and unsystematic risk had a substantial, significant, and different impact on return on investment. In addition, the research and strategy implications of the roles of risk are discussed.
Brodie, Roderick J., Cornelis A. de Kluyver, Shelby H. McIntyre, Frank M. Bass,
Dick R. Wittink, David A. Aaker, Robert Jacobson, Gary M. Erickson, and Michael
R. Hagerty (1987), "A Comparison Of The Short Term Forecasting Accuracy Of
Econometric And Naive Extrapolation Models Of Market Share/The Brodie And De
Kluyver Enigma: Introduction To The Commentaries/Misspecification And The
Inherent Randomness Of The Model Are At The Heart Of The Brodie And De Kluyver
Enigma/Causal Market Share Models In Marketing: Neither Forecasting Nor
Understanding?/The Sophistication Of 'Naive' Modeling/Marketing Managers Need
More Than Forecasting Accuracy/Conditions Under Which Econometric Models Will
Outperform Naive Models/Reply To The Commentary," International Journal of
Forecasting, 3, 423-462.
Data for 15 brands from 3 markets are used to examine the predictive ability of econometric market share models. The analysis leads to 3 conclusions: 1. Econometric market share models are not consistently more accurate than simple extrapolation (time series) methods for short-term forecasting. 2. Market share models do not usually capture enough of the important features of the market to be used by themselves as "standalone" forecasting instruments. 3. Apart from differences between markets, there do not appear to be circumstances to indicate where econometric market share models are likely to be more accurate at short-term forecasting. Bass offers an explanation of why econometric market share models with explanatory variables do not always dominate "naive" models, while Wittink points to the need for flexible models for analyzing store-level weekly data. Aaker and Jacobson offer reasons for the relatively high predictive power of a naive market share model.
Aaker, David A., and George S. Day (1986 September), "The Perils Of High-growth
Markets," Strategic Management Journal, 7, 409-421.
The belief that high-growth markets are more attractive than mature or declining markets has become virtually conventional wisdom. In reality, high-growth markets represent substantial risks and challenges as well as opportunities. Six arguments often are used to justify early participation in a high-growth market: 1. Gaining market share is easier. 2. The share gained is worth more. 3. The firm will get a jump on the experience curve. 4. There is less price pressure. 5. Participation ensures access to technology. 6. Aggressive entry will deter future entrants. The counterarguments for each of these are discussed. Seven major risks are identified: 1. more competitors than the market can support, 2. inadequate distribution, 3. insufficient resources to maintain growth, 4. changes in key success factors, 5. changes in technology, 6. competitors entering with better products or cost advantages, and 7. market growth that does not meet expectations.
Aaker, David A., Douglas M. Stayman, and Michael R. Hagerty (1986 March),
"Warmth In Advertising: Measurement, Impact, And Sequence Effects," Journal
of Consumer Research, 12, 365-381.
The results of 3 experiments investigating the advertising attitude effects of feelings of warmth generated by commercials are reported. A continuous measure of felt warmth, called the ''warmth monitor,'' is developed for the experiments. In the first experiment, warmth monitor measures are correlated with skin responses, showing that warmth is an emotion evoking physiological arousal. The 2nd and 3rd experiments assess how warmth influences attitudes toward a commercial. While warmth is found to be a volatile feeling, it also is related positively to liking for an advertisement and purchase intentions. Sequence effects for advertising execution strategies are indicated, such that subjects viewing a warm advertisement that had been preceded by a warm advertisement experience less positive attitudes toward the advertisement than when it is preceded by an advertisement of a different execution strategy. Sequence effects also are identified for humorous and irritating advertisements. No relationship between warmth and advertising recall is discovered.
Jacobson, Robert, and David A. Aaker (1985 September), "Is Market Share All
That It's Cracked Up To Be?," Journal of Marketing, 49, 11-22.
The market share-return on investment (ROI) relationship is investigated to determine the extent of the causal versus spurious association. The data used in the analysis were obtained from the Profit Impact of Market Strategies (PIMS) database of the Strategic Planning Institute. Analysis indicates that a large proportion of this relationship is spurious in the sense that both market share and ROI are the joint result of some 3rd factor(s), such as: 1. value added, 2. capacity utilization, 3. relative quality, 4. real market growth, and 5. relative image. It appears that market share is not generally a key to profitability. It may be that too much emphasis has been placed on market share and that more attention should be directed on product quality, customer satisfaction, management effectiveness, and other fundamentals.
Aaker, David A., and Donald E. Bruzzone (1985 March), "Causes Of Irritation In
Advertising," Journal of Marketing, 49, 47-57.
Irritation in advertising was studied using consumer response data for 524 television commercials. Product class substantially affected irritation in advertising. For instance, commercials for feminine hygiene products were rated as highly irritating regardless of execution style. Commercials for laxatives, women's underwear, and breath fresheners were similarly regarded. Higher socioeconomic level was positively associated with consumer advertising irritation, as were product nonusage and low television viewership. The copy execution factors increasing irritation were: 1. emphasis on product use for sensitive products, 2. use of contrived situations, 3. use of personal denigration, 4. threatening portrayal of valued relationships, 5. graphic portrayal of physical discomfort, 6. poor casting or use of unattractive/unsympathetic characters, 7. creation of tension, and 8. use of suggestive scenes. While irritating commercials commanded higher attentiveness, it is suggested that they are only successful in spite of their irritation. In general, such commercials decrease the credibility of all advertising.
Aaker, David A., and Briance Mascarenhas (1984 September), "The Need For
Strategic Flexibility," Journal of Business Strategy, 5, 74-82.
Businesses must open the avenues of strategic flexibility by adapting to the rapid and uncertain environmental changes that have a meaningful impact on organizational performance. An exploration is given of the concept of flexibility as a strategic option, by addressing the issues of: 1. exactly what flexibility is, 2. how it can be achieved, 3. when it should be exercised as a strategic option, and 4. how it can be measured. Flexibility can be achieved in a variety of ways, and it can involve diversification, investment in underused assets, or a reduction in commitment. A flexibility audit can be performed to illuminate areas of risk and simulate strategic action. The final judgment about the need for flexibility and determination of the most appropriate approach will depend on an analysis of potential changes in the environment and a cost-benefit evaluation of flexibility and its alternatives.
Hagerty, Michael R., and David A. Aaker (1984 June), "A Normative Model Of
Consumer Information Processing," Marketing Science, 3, 227-246.
A normative Expected Value of Sample Information (EVSI) model is developed which specifies how a consumer maximizing the expected value of sample information should engage in information search. The processing cost, the perceived correlation between attributes, and the perceived importance of attributes all affect information choice. Three sets of propositions are derived. In addition, the model is estimated and tested for subjects performing an information display board (IDB) task. The model and its constructs have several important managerial implications for those in the public and private sector who are concerned with helping consumers improve their decision making. It asserts that the role of consumer information is to improve consumer decision making by reducing the uncertainty surrounding evaluations of the alternatives. The value of information will be dependent on the expected differences between alternatives. The model tracks the diminishing returns expected with successive information processing.
Aaker, David A. (1984 March), "How To Select A Business Strategy,"
California Management Review, 26, 167-175.
A business strategy has 2 core elements: 1. the product-market investment decision, and 2. the development of a sustainable competitive advantage. Business strategies are usually evaluated in terms of their impact on sales and profitability objectives. However, because of the difficulty in estimating profit streams and adjusting for risk, it is useful to develop alternative criteria for strategy choice. Any alternative should determine whether the proposed business strategy: 1. is responsive to the external environment, 2. involves a sustainable competitive advantage, 3. relates to other firm strategies, and, if so, how, 4. provides adequate flexibility, 5. is consistent with the business mission and long-term objectives, and 6. is organizationally feasible. Such an effort will help avoid strategic mistakes and lost opportunities, as well as provide a comprehensive and accurate evaluation.
Aaker, David A., and Gary T. Ford (1983 December), "Unit Pricing Ten Years
Later: A Replication," Journal of Marketing, 47, 118-122.
Numerous consumer surveys were conducted in the 1970s evaluating the introduction of unit pricing into supermarkets. This research was conducted shortly after the introduction of unit pricing into stores; consequently, it was never intended to and currently cannot address the important issue of what happens to unit pricing over time as the concept emerges in a context quite different from that surrounding its introduction. Friedman's study of 2 Safeway stores in the Washington, DC, area has been selected as an appropriate study to replicate. It is shown that reported levels of unit price usage have increased substantially over time for both the city and suburban stores and that disproportionate usage between city and suburban stores has increased dramatically from 1970 to 1980. Relatively lower usage levels in the city store can apparently be ascribed to lower comprehension levels. Thus, a periodic educational campaign could be worthwhile. Methodological implications are also discussed.
Aaker, David A. (1983 January), "Organizing A Strategic Information Scanning
System," California Management Review, 25, 76-83.
Frequently, environmental information that is potentially valuable to strategic planning is not obtained because an organization lacks a formal strategic information scanning system (SISS). Without a SISS, scanning efforts may be misdirected in that the job may be delegated to individuals who lack ready access to information. Furthermore, vital information may not be stored for future reference. Guidelines for organizing a SISS are presented. Initially, the areas of needed information must be determined and information sources identified. Information needs include knowledge of competitors, markets, and environments. Information sources include trade publications, trade shows, and customers and suppliers. Scanning activities must be manageable, with the greatest effort devoted to the most important information areas. The responsibilities for information scanning must be delegated among the individuals who have access to information, such that efforts are not duplicated and information sources are not overlooked. Once information is gathered, it must be processed and stored so that it can be readily accessed and disseminated.
Aaker, David A., and James M. Carman (1982 August), "Are You Overadvertising?,"
Journal of Advertising Research, 22, 57-70.
The advertising response curve does not increase forever; it reaches a point of diminishing returns at which saturation sets in and additional sales gains from marginal advertising become very elusive. This review: 1. discusses the reasons overadvertising might occur, 2. defines the specification, estimation, and measurement problems inherent in determining advertising impact, and 3. assesses the empirical evidence on advertising response to determine the extent to which overadvertising has been observed. There are 2 reasons for overadvertising: 1. the reward structure of those making the budget decisions, and 2. the difficulty of modeling advertising response. The evidence on overadvertising leads to some conclusions that include: 1. There are probably a substantial number of advertisers who should experiment with reduced advertising expenditures. 2. Emphasis placed by advertising agencies on copy quality may be well-directed, since spending the same amount of money on a clever campaign that is difficult to copy probably has a greater impact on sales than an increase in advertising weight using a worn campaign.
Aaker, David A., and J. Gary Shansby (1982 May), "Positioning Your Product,"
Business Horizons, 25, 56-62.
Most marketing managers have had to address the questions of how a new brand should be positioned and if a problem brand can be revived by a repositioning strategy. Marketing managers too frequently make a positioning decision without adequate research. Systematic, research-based approaches to the positioning decision are now available, and an understanding of these approaches can lead to a more sophisticated analysis in which positioning alternatives are more fully identified and evaluated. There are 6 approaches to the positioning strategy: 1. attribute, 2. price/quality, 3. use or applications, 4. product user, 5. product class, and 6. the competitor. The identification and selection of a positioning strategy involves: 1. identifying the competitors, 2. determining how the competitors are perceived and evaluated, 3. determining the competitors' positions, 4. analyzing the customers, 5. selecting the position, and 6. monitoring the position.
Aaker, David A., and Donald Norris (1982 April), "Characteristics Of Tv Commercials Perceived As Informative," Journal of Advertising Research, 22, 61-70.
Aaker, David A., James M. Carman, and Robert Jacobson (1982 February),
"Modeling Advertising-sales Relationships Involving Feedback: A Time Series
Analysis Of Six Cereal Brands," Journal of Marketing Research, 19,
A time-series analysis of the advertising-sales relation was made for 6 brands of cold breakfast cereal with the assumption that feedback was potentially present. However, this relationship was found to be very weak. No lag structures were evident, and the hypothesis test of no causal relationship could not be rejected, except for the advertising-influencing-sales of one brand, and the sales-influencing-advertising direction of another. The danger of applying a misspecified structural model was indicated by estimating the Koyck distributed lag model with the data base. It was concluded that, in situations where lag structure was vital, the a priori assumption of a particular structure in a structural model analysis could produce grossly misleading results. A superior procedure may be in conducting time series analysis first, to obtain some insight into lag structure, and then to test a reasonable, theory-based structural model.
Aaker, David A. (1982 January), "Developing Effective Corporate Consumer
Information Programs," Business Horizons, 25, 32-39.
Despite its advantages, many organizations neglect to implement a consumer information program. An analysis is made of such programs, with emphasis on what they should include, how they should be developed, and their value. Among suggestions for consumer information are: 1. It should be relevant to the consumer. 2. The consumer must not already have this information. 3. It should be substantial enough to motivate the consumer to action. 4. It should be truthful, complete, and easily understood. Consumer information can be of various types. Among the benefits the company might realize from such a program are: 1. improved customer satisfaction, 2. improved firm image, 3. insights into consumerism, 4. more effective advertising and promotion, and 5. improved market performance. The program should be developed in 5 stages: 1. specifying the target segment, 2. determination of consumer information needs, 3. testing of the program, 4. promotion and distribution, and 5. evaluation.
Aaker, David A., and Richard P. Bagozzi (1982), "Attitudes Toward Public Policy
Alternatives To Reduce Air Pollution," Journal of Marketing & Public
Policy, 1, 85-94.
Research into public concern with environmental quality has primarily attempted to identify the causes or determinants of this concern. The evidence suggests that concern is associated with: 1. higher levels of education and socioeconomic status, 2. younger age, 3. urban residency, 4. nonminority membership, 5. perceived consumer responsibility, 6. Democrats, 7. liberals, and 8. those less politically alienated. An effort is made to extend this research in several directions. A structural equation model was used to explore the relationships among a set of constructs, including: 1. air pollution, 2. miles driven, 3. political orientation, and 4. demographic characteristics. Thus, the study hypothesizes that whether or not people will advocate certain policy recommendations affecting themselves, industry, and government depends on a number of variables. Interviews were conducted with 521 people. Results show that miles driven had a direct impact on the automobile-associated public policy alternatives. The research supports the hypothesis that the extent to which concern about air pollution generates support for public policy alternatives depends upon the cost of those alternatives.
Aaker, David A., Yasuyoshi Fuse, and Fred D. Reynolds (1982), "Is Life-style
Research Limited In Its Usefulness To Japanese Advertisers?," Journal of
Advertising, 11, 31-36,48.
In the US, life-style research is well accepted as a useful component of the advertising research inventory. While advertising researchers in Japan have made major efforts to apply life-style research, they have concluded that the technique has inherently less potential in Japan than in the US and other countries. An examination is conducted of a set of hypotheses relating to why life-style research may be less useful to Japanese advertisers. A comparison is made of 2 life-style studies, one done in Japan and one done in the US. The comparison indicates that: 1. Age is related to a traditional orientation among Japanese women. 2. There are greater life-style differences across age classes in Japan than in the US. 3. There are interesting differences between the 2 cultures. The findings agree with the argument that demographic variables such as age are effective at explaining life-style differences in Japan. Nevertheless, the explanatory power of the age variable will probably decline over time, therefore, life-style research may become more useful in the future.
Aaker, David A., and Donald E. Bruzzone (1981 October), "Viewer Perceptions Of
Prime-time Television Advertising," Journal of Advertising Research, 21,
People's reactions to television commercials are an important information need for advertisers. Bruzzone Research Co. (BRC) tests television commercials by mail. A questionnaire with photos and scripts of commercials is mailed to a national sample of 1,000 households. Replies generally are received from about 50% of the sample. Analysis is made of 524 prime-time commercials tested by BRC in its quarterly tests. Results of one group of tests suggest that viewer reaction to prime-time advertising is generally positive. Reactions can be captured in part by 4 factors. The ''dislike'' factor partially reflects the fact that viewers seem to resent some advertising, such as that for feminine hygiene products, female undergarments, and stomach and hemorrhoid products. There appear to be 3 distinct ways to create positive attitudes toward a commercial: 1. make it entertaining, 2. make it ''warm,'' and 3. make it personally relevant. Much consistency was discovered with 2 other sets of studies that used different data bases and methodologies.
Aaker, David A., and George S. Day (1980 December), "Increasing The
Effectiveness Of Marketing Research," California Management Review, 23,
The effectiveness of marketing research, often undermined by the poor interface between the manager and the research professional, can be improved through 2 approaches. The first approach-the marketing, planning, and information system (MPIS)-consists of: 1. the strategic plan, which addresses major questions of resource allocation with long-run performance implications, 2. the tactical plan, which specifies in detail the decisions to be made and the actions to develop, implement, and control current marketing programs, and 3. the information system, which contains both marketing data and marketing intelligence. The MPIS will help trigger research, ensure that research is linked to decision-making, and increase the likelihood that the research will make a continuing contribution. The second approach is to specify a research purpose that will identify the necessary decisions, with the goal of insuring that research will be relevant and ultimately useful. This will necessitate the evaluation of decision alternatives, consideration of problems or opportunities, and consideration of the research users.
Aaker, David A., Richard P. Bagozzi, James M. Carman, and James M. MacLachlan
(1980 May), "On Using Response Latency To Measure Preference," Journal of
Marketing Research, 17, 237-244.
Response latency is the span of time taken by a respondent to make a paired comparison selection. Research has shown that response latency measures strength of preference. The faster a selection is made, the stronger the preference for the selected alternative. The purpose of the study was to address two areas: 1. the relative marginal contribution of response latency to the measurement of preference, and 2. the combination of response latency measure with paired comparison and other measures of preference to obtain the best measure of brand preference. A multiple indicator/multiple cause model is utilized.The indicator coefficients could be used to generate values for the latent variable just as factor loadings are used to estimate factor scores. In the model the analysis is performed concurrent with a regression of the causal variables on the factor scores. When the response latencies recorded during the paired comparison procedure are combined with the paired comparisons, the combination furnishes a measure of brand preference that is similar to that found for the constant sum measure used by itself. Figures.
McElroy, Bruce F., and David A. Aaker (1979 September), "Unit Pricing Six Years After Introduction," Journal of Retailing, 55, 44-57.
Aaker, David A., and Richard P. Bagozzi (1979 May), "Unobservable Variables In Structural Equation Models With An Application In Industrial Selling," Journal of Marketing Research, 16, 147-158.
Aaker, David A., and Tyzoon T. Tyebjee (1978 May), "A Model For The Selection Of Interdependent R&D Projects," IEEE Transactions on Engineering Management, 25, 30-36.
Aaker, David A., and Charles B. Weinberg (1975 October), "Interactive Marketing
Models," Journal of Marketing, 39, 16-23.
INTERACTIVE MARKETING MODELS ARE PARTICULARLY EFFECTIVE IN SITUATIONS WHERE LINE DECISION-MAKERS ARE MAKING THE DECISIONS, THERE ARE TIME PRESSURES ON DECISION MAKING, WHEN HARD DATA ARE INAPPROPRIATE OR NONEXISTENT AND MANAGERIAL EXPERIENCE COMES INTO PLAY, WHEN DECISION MAKERS ARE GEOGRAPHICALLY DISPERSED, AND WHEN THE RELEVANT MODELS HAVE REQUIREMENTS IN TERMS OF COMPUTER TIME AND FILE-STORAGE CAPACITY THAT ARE COMPATIBLE WITH THE AVAILABLE INTERACTIVE SYSTEM. INTERACTIVE SYSTEMS MAY BE A CRITICAL CATALYST IN THE FUTURE GROWTH OF THE IMPLEMENTATION OF MARKETING MODELS BECAUSE INTERACTIVE SYSTEMS LEAD TO AN INVOLVED DECISION MAKER, AND PERSUADES OTHERS IN HIS ORGANIZATION TO DO SO. THUS INTERACTIVE SYSTEMS CONTRIBUTE TO INCREASED MODEL IMPLEMENTATION BECAUSE OF THEIR SUITABILITY FOR CERTAIN TYPES OF DECISION-MAKING SITUATIONS, THEIR COMPATIBILITY WITH DECISION-CALCULUS MODELING PHILOSOPHIES, AND THEIR ENHANCEMENT OF MANAGERIAL INVOLVEMENT IN MODELS. DIAGRAMS.
Aaker, David A. (1975 February), "Admod An Advertising Decision Model,"
Journal of Marketing Research, 12, 37-45.
'ADMOD' IS AN ADVERTISING DECISION MODEL WHICH FOCUSES UPON SPECIFIC CONSUMER DECISIONS, BY CONSIDERING THE MEDIA-ALLOCATION DECISION, AS WELL AS THE COPY DECISION AND BUDGET DECISION. ADMOD IS DIFFERENT FROM OTHER MEDIA MODELS THAT TRY TO RELATE EXPOSURE LEVELS OF ADVERTISEMENT TO SALES, IN THAT IT TRIES TO ANALYZE SPECIFIC CONSUMER DECISIONS. THE OBJECTIVE FUNCTION OF THE MODEL TRIES TO MAXIMIZE TOTAL EXPECTED PROFIT GENERATED BY A MEDIA SCHEDULE. THIS IS DONE BY TAKING A SAMPLE GROUP AND ANALYZING THE ABILITY OF THE ADVERTISING PROGRAM TO PRECIPITATE A PARTICULAR DECISION ON THE PART OF EACH PERSON, THEN PROJECTING THIS TO THE TOTAL POPULATION. CONSTRAINTS CAN BE IMPOSED ON ANY OF THE VARIABLES, SUCH AS THE NUMBER OF EXPOSURES, THE VEHICLE SOURCE, THE COST AND THE COPY. A HEURISTIC IS USED TO SEARCH THE DIFFERENT MEDIA INSERTION SCHEDULES AND DETERMINE THE HIGHEST LEVEL. CHARTS.
--- (1974 August), "Addendum To 'Management Science In Marketing -- The State
Of The Art'," Interfaces, 4, P 38.
THIS IS A REFERENCE TO AN EARLIER ARTICLE IN THE SAME JOURNAL IN WHICH THE AUTHOR UNINTENTIONALLY IMPLIED THAT LINEAR-PROGRAMMING HAS NO POTENTIAL IN ADDRESSING THE MEDIA DECISION. AS A CORRECTION, IT IS STATED THAT AT LEAST ONE SECOND GENERATION MEDIA MODEL DID USE LINEAR-PROGRAMMING AND LINEAR PROGRAMMING BASED METHODS ARE STILL BEING PURSUED. REFERENCE.
Aaker, David A., and George S. Day (1974 June), "A Dynamic Model Of
Relationships Among Advertising, Consumer-awareness, Attitudes, And Behavior,"
Journal of Applied Psychology, 59, 281-286.
ONE OF THE MODELS OF COMMUNICATION PROCESS IS THE NOTION OF A HIERARCHY OF EFFECTS THAT POSTULATES A CASUAL FLOW FROM COGNITIVE CHANGE TO ATTITUDE CHANGE TO BEHAVIORAL CHANGE. THIS MODEL HYPOTHESIZES THAT IN THE MARKETING CONTEXT ADVERTISING HAS ITS MOST DIRECT AND DISCERNABLE EFFECT ON COGNITIONS AND ATTITUDES, A LESSER EFFECT ON ATTITUDES, AND INFLUENCES BEHAVIOR PRIMARILY THROUGH ITS IMPACT ON COGNITIONS AND ATTITUDES. IN THIS STUDY NINETEEN TELEPHONE SURVEYS, MADE AT TWO- MONTH INTERVALS TO A NATIONAL PROBABILITY SAMPLE OF 1,200 HOUSEHOLDS WHO WERE USERS OF INSTANT COFFEE, YIELDED AGGREGATE MEASURES OF BRAND AWARENESS, ATTITUDES TOWARDS BRANDS, AND ADVERTISING EXPOSURE. THE HIERARCHY MODEL OF COMMUNICATION EFFECTS WAS FOUND TO BE ONLY PARTIALLY CORRECT. TABLE. REFERENCES.
Aaker, David A. (1973 February), "Toward A Normative Model Of Promotional
Decision-making," Management Science, 19, 593.
THIS PAPER PRESENTS A NORMATIVE MODEL OF PROMOTIONAL DECISION-MAKING AND REVIEWS CURRENT LITERATURE IN THE MODEL CONTEXT. THE MODEL EMPHASIZES THE LONG-RUN IMPACT OF PROMOTIONS AND DRAWS UPON STOCHASTIC BUYER-BEHAVIOR MODEL TECHNOLOGY. IN PARTICULAR, A STOCHASTIC MODEL IS USED TO PREDICT THE LEVEL OF BRAND ACCEPTANCE OBTAINED FROM A GROUP OF NEW TRIERS ATTRACTED BY A PROMOTION - CONSUMERS WITH NO RECENT USE EXPERIENCE WITH THE BRAND. THIS BRAND ACCEPTANCE IS MADE A FUNCTION OF THE COMPOSITION OF THE NEW-TRIER GROUP. FINALLY, ATTENTION IS FOCUSED UPON THE PROBABILITY DISTRIBUTION OF THOSE ATTRACTED BY THE PROMOTION, CONDITIONAL ON THE NATURE OF THE PROMOTION. THIS DISTRIBUTION IS USED TO DEVELOP EXPRESSIONS FOR THE EXPECTED LONG-TERM WORTH OF A NEW-TRIER GROUP ATTRACTED BY A SPECIFIC PROMOTION.
Aaker, David A., and Brown Phillip K. (1972 August), "Evaluating Vehicle Source
Effects," Journal of Advertising Research, 12, 11-16.
WHEN THE ANALYSIS FOCUSED UPON NONUSERS OF THE PRODUCT A FAIRLY STRONG INTERACTION BETWEEN VEHICLE SOURCE EFFECTS, ADVERTISING OBJECTIVES, AND COPY APPROACHES EMERGED. FOR NONUSERS, THE PRESTIGE MAGAZINE DID BETTER WITH RESPECT TO PRODUCT QUALITY MEASURES THAN THE EXPERT MAGAZINES WHEN IMAGE ADVERTISEMENTS WERE USED, AND THE REVERSE EFFECT OCCURRED WHEN REASON-WHY ADVERTISEMENTS WERE USED. WHEN FACTUAL COMMUNICATION MEASURES WERE USED, REASON-WHY ADS PERFORMED BETTER WITH RESPECT TO BELIEVABILITY AND SIMILAR MEASURES IN AN EXPERT VEHICLE THAN IN A PRESTIGE VEHICLE, AND THAT THIS DIFFERENTIAL PERFORMANCE WOULD NOT MATERIALIZE FOR IMAGE ADVERTISEMENTS RECEIVED SOME SUPPORT.
Aaker, David A. (1972 May), "A Measure Of Brand Acceptance," Journal of
Marketing Research, (VOL 9 NO 2), 160-167.
MARKET PREDICTIONS MADE BY STOCHASTIC MODELS OF BUYER BEHAVIOR ARE EXTREMELY USEFUL BUT HAVE IMPORTANT LIMITATIONS. THIS ARTICLE SUGGESTS A REFINEMENT OF THIS MEASURE WHICH EXPLOITS THE AVAILABLE INFORMATION AND PROVIDES THE POTENTIAL OF OBTAINING FOR ONE MODEL APPLICATION A MARKET PREDICTION FOR EACH PURCHASE SEQUENCE. WHEN PURCHASE HISTORIES OF THOSE TRYING A BRAND FOR THE FIRST TIME PROVIDE THE DATA BASE, MEASURES OF BRAND ACCEPTANCE ARE GENERATED FOR EACH PURCHASE SEQUENCE. THE REGRESSION RESULTS PRODUCED SOME INTERESTING CONCLUSIONS. FIRST, THE HIGHER-VOLUME USER SEEMED TO BE MORE DIFFICULT TO WIN OVER, ONCE HE HAD BEEN INDUCED TO TRY, THAN THE AVERAGE USER. SECOND, BUYERS WITH A TENDENCY TOWARD BRAND LOYALTY ARE MORE LIKELY TO ACCEPT A NEW BRAND ONCE THEY HAVE TRIED. FINALLY, THE INFLUENCE OF THE DEAL AND ITS SIZE ON BRAND ACCEPTANCE WAS SMALLER THAN ANTICIPATED.