There’s a crucial strategy in online advertising that could revolutionize the way marketing agencies target online consumers, according to Fox School of Business researcher.
Dr. Xueming Luo studied how the strategy of competitor-poaching in online advertising influences consumer behavior. His most-recent publication on the topic was named Best Track Paper in Social Media & Digital Marketing at the 2015 American Marketing Association Winter Educator Conference Feb. 14 in San Antonio, Texas. It also received the conference’s honorable-mention distinction among all submissions.
Competitor-poaching in online advertising is responsible for why consumers can search the term “iPhone” using Google’s search engine, and corresponding ads for the Samsung Galaxy, Apple’s closest competitor, will appear, said Luo, Professor of Marketing, Strategy, and Management Information Systems. In his research, Luo uncovered that this strategy results in “clicks wasted,” as consumers glance over the competitor’s ads while remaining loyal to their initial preferences.
“It’s a double-edged sword,” Luo said. “You can increase the impression of the competitor’s brand, but you cannot get consumers to purchase the poaching brand.”
This effect is partly seen because online consumers often develop specific brand loyalties by word of mouth or from reviews that sites like Amazon and Google provide, he said. Firms, Luo found, seek to continually build brand equity and increase positive socialization around their products in order to thwart attempts at online poaching.
“Online poaching impresses non-loyal customers, but fails to get more sales conversion from customers who have high loyalty to the brand under attack” Luo said.
Asking a consumer why they want or prefer a certain product or brand, and how price influences their decisions, can help clarify what incentivizes shoppers, Luo said. Marketing agencies should then target their competitor’s keywords with advertisements that include discounts, he suggested, to capture consumer curiosity.
“To switch consumers from a brand, you need a deeper incentive, such as a 30-percent discount,” Luo said. “If you do this the wrong way, you’ll waste your money. That method can only engender clicks, but not sales conversion.”
This research, Luo said, is a part of his greater interest in how online marketing interweaves big-data analytics, mobile strategies, and consumer insights. As founder of the Global Center on Big Data in Mobile Analytics, which is housed at the Fox School, Luo is interested in investigating how big data gleaned from search engines reveal varying patterns in the evolving sphere of online ads and mobile targeting.
“This is a great way to outsmart competitors and connect customers for superior company performance,” Luo said.
A research paper authored by a current PhD student at Temple University’s Fox School of Business has earned international acclaim.
Pauline Milwood recently received the Best Paper Award at the second biennial Advances in Destination Management Conference, for her paper titled, “Knowledge, Innovation and the Role of the Destination Management Organization: Integrating Stakeholder and Network Perspectives.”
A PhD student with a concentration in Tourism and Sport, Milwood was honored at the conference, which took place June 11-13, in St. Gallen, Switzerland. She co-authored the paper with her advisor, Dr. Wesley S. Roehl, a professor from Temple’s School of Tourism and Hospitality Management.
“It felt extremely gratifying (to be recognized),” Milwood said. “The PhD program is extremely grueling. It kind of makes the thorns and challenges that develop in the process of doing research all worth it in the end.”
The paper integrates stakeholder and network perspectives to examine the role played by destination management organizations (DMOs) in developing competitive advantage. Ultimately, the paper suggests that DMOs should utilize more involvement and collaboration engagement strategies and less control and monitoring engagements strategies to influence successful innovation outcomes among destination partners.
The research has implications for a wide range of entities, according to Milwood.
“The dynamic of government, business, and local residents’ roles comes into play when we’re talking about innovation development of a tourism area,” Milwood said.
In addition to its practical implications, the research enhances the theoretical ideas of network and stakeholder theorists.
“There is benefit to blending theories to better understand both structure and process dynamics of these relationships among public, private and third-sector interests, specifically as it relates to developing innovation in tourism,” Milwood said.
The Journal of Destination Marketing and Management, within which the paper will likely be published, co-sponsored the award.
Human beings are constantly engaging the five senses. But how does this sensory experience impact a consumer’s choice behavior?
This question was explored at the Fox School of Business’ first-ever sensory marketing conference, Understanding the Customer’s Sensory Experience. The conference was held on June 5th and 6th, at Alter Hall, home of Temple University’s Fox School of Business and School of Tourism and Hospitality Management.
The conference focused on the nature of the five human senses, their role in affecting consumer behavior and emotion, and their application within a range of settings, including product and service design.
Fox School of Business marketing professor Maureen Morrin and School of Tourism and Hospitality Management professor Daniel Fesenmaier co-hosted the event.
Attendees included marketing and tourism research experts, doctoral students studying within these disciplines, executives of marketing firms, and industry professionals responsible for developing and improving the consumer experience.
“One of the main goals was to bring together both academics and practitioners who are interested in sensory marketing,” Morrin, Director of the Fox School of Business’ Consumer Sensory Innovation Lab, said. “Just getting industry professionals involved and having them see what we’re working on and researching, and to see what their problems are, I think, is helpful.”
At least one conference attendee plans to take advantage of the partnerships the conference established.
“It was extremely stimulating to bring together academics, people from [the] industry and specialists within each category,” Stephen Gould, a marketing professor at Baruch College, said. “As a professor, I plan to follow up with at least one of the industry presenters who I met at the conference.”
The conference was sponsored by the Fox School of Business, the Department of Marketing and Supply Chain Management, and the National Laboratory for Tourism and eCommerce.
Events included a corporate panel led by executives from firms including Mane USA, Scents Marketing, ScentAir, and HCD Research. Another panel, composed of academic research laboratory directors, led discussions on how they established, operate, and fund their laboratories. Numerous research presentations were given, with topics ranging from multisensory processing, to product and packaging development.
Conference attendees left with many new ideas, thanks to the different perspectives offered by the presenters. Adriana Madzharov, of the Stevens Institute of Technology, felt that the combination of research presentations, corporate panels, and research laboratory discussions offered a unique and fulfilling experience.
“The conference presented a perfect combination and balance between these three very different approaches to studying sensory customer experiences,” Madzharov said. “Personally, the amount of knowledge and valuable contacts that I acquired in such a short time during the conference makes it for me the best professional experience so far.”
Pharmaceutical companies would improve sales revenue by investing in commercial operations that promote business innovation, employee engagement, organization alignment, and ensure a reasonable ratio between district sales managers and frontline sales representatives, according to Fox School of Business research.
The study was commissioned by TGaS Advisors, a benchmarking and advisory services firm, and division of KnowledgePoint360®, a global leader in communications, information and workflow services to healthcare professionals and the pharmaceutical and biotechnology industries.
“We focused on factors likely to impact pharmaceutical sales because data for this area are more robust, but the value of investments in sales operations should be read as a proxy for a broad range of commercial operation functions,” said George Chressanthis, the professor of healthcare management and marketing at the Fox School of Business who led the study team with Eric Eisenstein, assistant professor of marketing, and Fox PhD student Patrick Barbro.
According to Chressanthis, this is the first such independent research study on the effects of qualitative versus quantitative measures of commercial operation functions on business performance. Internally reported data from 26 pharmaceutical companies were analyzed for the period 2005-2011 and was complemented with qualitative survey data on commercial operations’ cultural attributes assessed by strategic account executives at TGaS Advisors.
The research team was given complete access to their database, with all analyses, findings, and recommendations independently developed of TGaS Advisors. All company specific data elements and names in the research were kept confidential, in keeping with contractual obligations, but did not affect the course the analysis.
The research showed that three factors within a company’s commercial operations organization are particularly important in determining U.S. business performance:
- Commercial operations’ cultural attributes, specifically innovativeness and responsiveness, which drive employee engagement and organizational alignment, are critical. These attributes are most powerful in affecting sales when working synergistically and in concert with quantitative investments in commercial operations support.
- Company scale and spending to support sales professionals that allow for more products to sell and leverage specialized commercial operations functional support for sales representatives to be more effective in their role.
- The number of sales representatives whom district sales managers supervise has a direct bearing on their ability to provide necessary levels of sales force effectiveness activities such as coaching, mentoring, on-the-job training, and managerial support to representatives, which in turn has a quantifiable impact on business performance.
The findings suggest that executives can significantly improve commercial performance by investing resources to:
- Create stronger alignment between functions and foster a culture of commercial innovation, organizational alignment, agility, and urgency. Quantitative investments in commercial operations will yield sub-optimal returns without the right structure of cultural attributes to support these business activities.
- Support improvements in sales professionals (i.e., through information, systems, business processes, training, etc.).
- Ensure an optimal number of sales representatives reporting to each first-line sales manager.
The Fox School research team has presented study findings at the following conferences: Pharmaceutical Management Science Association Annual Conference in May 2013 (Bonita Springs, Fla.), International Health Economics Association 9th World Congress in July 2013 (Sydney, Australia), and the American Marketing Association Summer Marketing Educators’ Conference in August 2013 (Boston).
Further insights from the study can be found by reading, “What Aspects of Commercial Operations Impact Pharmaceutical Company Business Performance?” and TGaS Advisors’ “Reflections on a Research Study Conducted by the Temple University Fox School of Business,” both available at www.tgas.com.