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JOURNAL OF EUROMARKETING
EDITOR-IN-CHIEF
ERDENER KAYNAK
Pennsylvania State University at Harrisburg
ASSOCIATE
EDITOR
SVETLA MARINOVA
Aalborg University
TECHNOLOGY AND
E-COMMERCE EDITOR
BOOK REVIEW
EDITOR
PRODUCTION
EDITOR
KIP BECKER
Boston University
CLAUDE CELLICH
International University of Geneva
TALHA DOGAN HARCAR
Pennsylvania State University at
Beaver
EDITORIAL REVIEW BOARD MEMBERS
J. SCOTT ARMSTRONG
University of Pennsylvania
SØREN ASKEGAARD
The University of Southern Denmark, Denmark
GEORGE BALABANIS
City University, United Kingdom
J. ENRIQUE BIGNE ALCANIZ
University of Valencia, Spain
DAVID J. CARSON
University of Ulster at Jordanstown, Northern
Ireland
F. JAVIER RONDAN CATALUNA
University of Seville, Spain
CHISLAINE CESTRE
University of Lausanne, Switzerland
LEO PAUL DANA
University of Canterbury, New Zealand
SRINIVAS DURVASULA
Marquette University
YVONNE VAN EVERDINGEN
RSM Erasmus University, Netherlands
PERVEZ N. GHAURI
King’s College, United Kingdom
KJELL GRONHAUG
Norwegian School of Economics and Business Administration, Norway
KLAUS GRUNERT
Aarhus University, Denmark
NEIL HERNDON
South China University of Technology, China
KARIN HOLSTIUS
Turku School of Economics and Business Administration, Finland
HARTMUT H. HOLZMUELLER
University of Dortmund, Germany
FREDERIC JALLAT
Paris Graduate School of Business
(ESCP-EAP), France
MILAN JURSE
University of Maribor, Slovenia
JORMA LARIMO
University of Vaasa, Finland
TOMMI LAUKKANEN
University of Eastern Finland, Finland
STEVEN LYSONSKI
Marquette University
MARIN MARINOV
University of Gloucestershire, United Kingdom
RITA MARTENSON
University of Gothenburg, Sweden
LUIZ MOUTINHO
University of Glasgow, United Kingdom
DAVID MCHARDY REID
Seattle University
DOMINIQUE ROUZIES
Groupe HEC, France
ARNOLD SCHUH
Vienna University of Economics and
Business Administration, Austria
BRUNO SERGI
University of Messina, Italy
D. DEO SHARMA
Stockholm School of Economics, Sweden
KENNETH SIMMONDS
London Business School, United Kingdom
NITISH SINGH
Saint Louis University
GREGORY SULLIVAN
Advanced Marketing Systems
Indexed and/or Abstracted in: EBSCOhost Products; Emerald Management Reviews; Gale Cengage; Business ASAP, Cabell’s Directory,
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Journal of Euromarketing (ISSN:1049-6483) is published quarterly by IMDA Press, 1201 Stonegate Road, Hummelstown, PA 17036, USA.
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March 2015
Volume 24, Numbers 1, 2015
CONTENTS
EDITORIAL
Erdener Kaynak
1
ARTICLES
Viral Marketing: More than the Online Version of Word-of-Mouth?
Paul Edwin Ketelaar and Bart Schaerlaekens
Is Your Perception of “Luxury” Similar to Mine? A Concept Made of Absolute
and Relative Features
Taylan Urkmez and Ralf Wagner
5
20
Push and Pull Effects in International Retailing
Dalia Rachman-Moore and Michael Etgar
41
Social Media: The New Trend in Marketing Communication
Antonios Zairis and Lagia Pareskevi
62
Journal of Euromarketing, 24: 1 - 4, 2015
Copyright © IMDA Press
ISSN: 1049-6483 print / 1528-6967 online
EDITORIAL
The article by Ketelaar and Schaerlaekens
presents an answer to the question whether
word-of-mouth theory can be used as a
framework for viral marketing research. By
use of an online survey, the applicability of
three central subjects in word-of-mouth research on viral marketing was studied. The
motives for passing on word-of-mouth and
viral marketing messages (1) showed to be the
same, and also opinion leadership and its
characteristics (2) played a similar role in the
diffusion of both types of messages. The resulting change in attitude (3), however, proved
to be greater for word-of-mouth than for viral
marketing. The authors suggest considering
viral as a type of word-of-mouth marketing.
Both share a common core, but also have distinct characteristics and effects.
Although correlations found in the study
are low for all hypotheses, some practical implications seem justified. The results of this
study provide advertisers and marketers with
some best practices in creating and launching
a successful viral marketing campaign. To
begin with, opinion leaders should be targeted
when spreading or seeding the viral marketing
message, as they have an increased chance of
forwarding the message. Assuming that they
like the message and the depicted product,
these opinion leaders will take over the advertisers’ work and spread the message to the rest
of the population. To reach these opinion
leaders, the users of mass media focusing on
the relevant product category should be targeted. A producer of game consoles would,
for example, be advised to send out his viral
messages to the members of gaming communities and readers of gaming magazines. The
fact that product satisfaction is a predictor of
forwarding behavior deserves extra attention.
This shows that viral marketing is not a cureall for disliked products, but can be a great
way of using new media to attract new customers for products that people are satisfied
with. Furthermore, our research showed that
single exposure to a viral marketing campaign
is not enough to influence product and brand
attitude. Therefore, viral marketing messages
seem more suited to improve awareness. Although the effects on attitude have not been
studied yet, another option is to ensure repeated exposure to the campaign. This could, for
example, be done by creating messages that
are that well suited or intriguing in order for
people to view them multiple times, or by
launching a campaign with content that
changes over time.
“Luxury” is an integrative term that
arouses someone’s appetite and makes them
envious of others. Some consumers aspire to
associate themselves with the term “luxury”
and to make use of its lustrous aspect. In this
vein, Silverstein and Fiske (2003) as well as
Truong, McColl, and Kitchen (2009) have
stated that some non-luxury brands use the
concept of luxury in naming their products,
and in this way, they take advantage from the
confusion around the concept. Kapferer and
Bastien (2010, p. 38) suggested that the term
“luxury” appears in all sectors and nearly every type of product claims to be luxurious or
strives to be a “true luxury” for customers
who are willing to pay for it. Related terms
such as “deluxe,” “premium,” “ultra premium,” “grand,” “exclusive,” “opuluxe,” and
“hyper-luxury” are used by practitioners in the
business world for attaching their products to
the luxury concept. However, this practice
contributes to the complexity of the term
“luxury” (Kapferer & Bastien, 2009).
1
2
Resolving the current confusion related to
the concept requires a clear distinction of interpretations that emphasize the relativity of
luxury. Everyone understands the term “luxury,” but almost nobody agrees on the explicit
description or implications of it. This uncertainty in the meaning and existence of everincreasing analogous terms for the concept of
luxury damages the leverage effect in product
positioning. A clarification might become essential, especially for business practitioners,
because non-luxury products are unlikely to
be dealt in the same way as luxury products
(Kapferer & Bastien, 2010). To promote discussion around the concept of luxury, this
study provides a scheme that researchers
might use to understand the different types.
In the paper by Urkmez and Wagner, the
authors, in the first place, work along two
paths in order to reach the study’s goal. In
the second section, they focus on the relativity
of criteria used for characterizing consumption. In the third section, we review the criteria characterizing luxury goods and services.
In the fourth section, they wrap up the discussion by focusing on people’s perceptions and
suggest a classification scheme. Based on
this, in the last section the authors take the
second path by adding the consumers’ perspective. Here, the authors outline the procedure for conducting 7 qualitative interviews
with Turkish people from middle/upper middle class and the results of these. A discussion
of the results, implications, and conclusions
are presented in the sixth section.
Modern life has changed many luxuryrelated concepts, and technology adoption is
one of these. The consumer research folklore
claims males are more interested in technological gadgets and cars. However, the responses
from the interviews do not confirm to this traditional view. The research question inviting
general views about any product they owned
gave rise to surprising responses because, contrary to stereotypical expectations that women
are supposed to talk about either fashion or
beauty items, they preferred either their technology items or their cars as topics to have a
conversation about. Furthermore, the crucial
point to take into consideration is necessity
and luxury differentiation. For working class
people, technology and related items have
been indispensable so everybody owns either
smart phone or tablet PC. Although people
consider themselves as not someone purchasing luxury products, they actually do so, and
they justify their purchases by hiding behind
the reason of it being a necessity of contemporary life. Technology adoption has been so
widespread that people say that their
smartphones or tablet PCs are devices to do
everything on from morning to night. Moreover, the informants usually considered their
inner state as being happy or in another positive mood.
Modern life has changed the lifestyle of
people, so people are looking forward to having increasing levels of comfort each day.
The products that promote that idea of comfort
and make life easier for people have more
chance of being in higher demand. The items
which were used by people more often, for
example, daily or a few times a week, were in
higher demand than items used or worn only
on special occasions. So marketing strategies
might need to be changed. For rarely used
items such as jewellery, emotions dominate
the perception. Just like the successful marketing slogan of “A Diamond is Forever” by
DeBeers, successful slogans emphasize the
heirloom characteristic of jewellery. Middle
aged and elderly people are encouraged to buy
new jewellery by the idea of handing it on to
the next generation.
The advantages of technology-related or
comfort-related items make selling easier; it
might be possible to add further elements of
luxury to these items and thus combine some
luxury with comfort and technology. This
might initiate a new stream of marketing. Because the price difference between authentic
and counterfeit products is vast, people are
EDITORIAL
directed to buy counterfeit items. Hence, additional purchasing options and price differentiation might support the vendors in clarifying
differences between inaccessible luxury and
accessible luxury. Thus, companies specializing in luxury goods might gain some of the
purchasers of counterfeits. Diversifying payment options such as equal instalments help
more people acquire the purchasing power to
buy jewellery or similar products.
Emotions and experiential purchases turn
us to drive luxury purchase decisions. Emotions drive the consumer towards broader
shopping adventures. Although people sometimes regret their shopping, they compensate
for their regret by creating an excuse for their
behaviour, or by praising the product they
have bought. This kind of approach might
help increase happiness. For future research,
it might be wise to investigate emotions enabling an increase in positive moods. The concept of luxury plays an important role in today’s product positioning, and luxury is something aspired to. Almost all marketers aim to
advantage luxury-related attributes by terms
such as “premium,” “deluxe,” or “high class.”
They aim to meet the consumers’ desire to
have a kind of luxury in their lives or have a
luxury product among their possessions.
However, we are facing different usages of the
term “luxury,” which reduces the efficiency of
the marketing communications. This article
contributes to the conceptual clarification of
the concept of luxury. Counterfeit items are
common, especially in developing countries,
and this causes extensive use of such products.
A further study might reveal the rate of preference for such counterfeit products and the
differences in moods and behaviours of consumers.
The purpose of the study by RachmanMoore and Etgar is to evaluate the extent to
which the Push and Pull model of international marketing can explain retail globalization.
A cross sectional analysis of international
sales of 161 large scale international retailers
3
was conducted. The data was drawn from the
Planet Retail surveys about large-scale international retailers. Analyses were performed
separately for grocery and non-grocery retailers. The study emphasizes the difference in
the relative importance of the Push and Pull
variables between grocery and non-grocery
retailers regarding their international expansion. The findings indicate that Push variables
are relatively more important in explaining
international expansion of grocery retailing
formats while Pull variables are more important for non-grocery retailers. These results may help managers to decide which factors to consider when contemplating international expansion.
The results of this study carry several possible advantages for retail managers who find
foreign ventures to be very expensive and
highly risky operations characterized by high
probability of failure and retreat. The identification of variables which can identify antecedent conditions for global operations is
therefore very useful. The results of this research show that large-scale grocery retailing
formats should expand to foreign markets only
when detecting saturation in their domestic
markets. In contrast, large-scale non-grocery
retailers need not defer global expansion until
they saturate their domestic markets and can
move abroad disregarding their position in the
domestic market. Instead, they should consider the size of the potential foreign demand in
their foreign markets and the extent of competition they face there. If these conditions are
appealing, they should branch out beyond
their domestic market.
This research contributes to the current
theory of retail expansion by suggesting that
the basic Push and Pull Model cannot be applied “as is” to international retailing. It must
first be adjusted by adding intervening variables which reflect the retailer’s strategy, such
as the retail category under which it operates.
Choice of different retail strategy as per category leads to completely opposite global strat-
4
egies. Methodologically, this article contributes by showing how international sales data
can be used to analyze retail internationalization processes.
Social media platforms have fundamentally changed not only the world we live in and
the way we communicate, but the whole marketing system as well. There has never been
so much information available, and never have
consumers had so much power and influence.
With the use of Web 2.0, User Generated
Content, and Viral Marketing, the marketing
message is transmitted faster and more efficiently to thousands of people almost like a
“virus.” Marketing experts make efforts to
exploit the power of this new medium and try
to find the perfect combination between old
and new media, in order to create a successful
campaign.
The paper by Zairis and Paraskevi aims to
provide an overview of the social media use as
a marketing tool, and to identify the way they
have changed the traditional marketing landscape. It also attempts to analyze their use in
the Greek market. The research results indicated that marketing experts use each social
media category according to the company’s
objectives, and that the effectiveness of social
media campaigns can be measured and analyzed in detail through the use of various analytic tools. Greek companies in particular
have been using social media as a marketing
tool for more than two years, with the most
popular being social networks and microblogging platforms. They were mostly used
for promoting products and services and attracting new customers. Despite their short
period of usage, their importance was
acknowledged.
The aforementioned findings are extremely important for companies, especially under
economic crisis conditions, when the advertising spending is usually reduced. In such cases, social media campaigns could be used as a
low cost/mass audience solution. Therefore, a
better knowledge of social media marketing
could be a powerful tool for marketing managers so as to promote their products and services more efficiently. After all, it is the social media era!
Erdener Kaynak
Editor-in-Chief
REFERENCES
Kapferer, J. N., & Bastien, V. (2009). The
specificity of luxury management: Turning
marketing upside down. Journal of Brand
Management, 16(5-6), 311-322.
Kapferer, J., & Bastien, V. (2010). The
luxury strategy: Break the rules of marketing
to build luxury brands. London: Kogan Page.
Silverstein, M. J., & Fiske, N. (2003).
Luxury for the masses. Harvard Business Review, 81, 48–57.
Truong, Y, McColl, R. and Kitchen, P. J.
(2009). New luxury brand positioning and the
emergence of masstige brands. Journal of
Brand Management, 16(5–6), 375–382
ARTICLES
Viral Marketing: More than the Online Version of
Word-of-Mouth?
Paul Edwin Ketelaar
Bart Schaerlaekens
ABSTRACT. This article presents an answer to the question whether word-of-mouth theory can be
used as a framework for viral marketing research. By use of an online survey, the applicability of
three central subjects in word-of-mouth research on viral marketing was studied. The motives for
passing on word-of-mouth and viral marketing messages (1) showed to be the same and also opinion
leadership and its characteristics (2) played a similar role in the diffusion of both types of messages.
The resulting change in attitude (3), however, proved to be greater for word-of-mouth than for viral
marketing. Based on these results, we suggest considering viral as a type of word-of-mouth marketing. Both share a common core, but also have distinct characteristics and effects.
KEYWORDS. Viral marketing, word-of-mouth, opinion leadership, characteristics of senders, marketing effectiveness
INTRODUCTION
The trust of advertisers in traditional mass
media seems further away than ever. A television spot or a newspaper ad is no longer a
guarantee for high sales numbers and profits.
Increased advertising avoidance, media fragmentation, the advent of digital video recorders (DVRs), and the growing amount of legal
restrictions on media content (e.g., eroticism,
tobacco) and context (e.g., advertising during
children programs) push advertisers towards
new ground (Speck & Elliot, 1997; Rust &
Oliver, 1994; O’Neill & Barrett, 2004; Kaikati
& Kaikati, 2004; Porter & Golan, 2006, Story
& French, 2004).
In this regard, the advent of the Internet as
an advertising medium is without doubt the
most important industry change of the last fifteen years. Marketers have shifted their advertising budgets to this medium at a great
pace (Schumann & Thorson, 2007), recently
even topping television advertising spending
in the United Kingdom (Interactive Advertising Bureau [IAB] 2009). This move to Internet advertising led to the emergence of viral
marketing (Porter & Golan, 2006), which can
Paul Edwin Ketelaar, Ph.D is a Senior Assistant Professor and Bart Schaerlaekens, Ph.D. of Communication Sciences and Behavioral Science Institute, Redbound University, Nijmegen, The Netherlands
Address correspondence to Dr. Paul Edwin Ketelaar, Institute of Communication Science and Behavioral Science, Radbound University, P.O. Box 9104, 6500 HE Nijmegen, The Netherlands, E-mail:
p.ketelaar@ru.nl
5
6
be described as a marketing strategy in which
consumers are encouraged to pass on advertising messages to friends, colleagues, family,
and others via electronic media (e-mail, social
media, instant messengers, etc.) in order to
sustain exponential awareness of consumers to
these messages (Thevenot & Watier, 2001).
These viral marketing messages can be anything from videos, viral campaigns on social
network sites, and Facebook applications to
games or microsites.
Many marketers view viral marketing as
the ideal means to connect with customers
(Ferguson, 2008), and therefore, the subject
has been given a considerable amount of academic attention in the last decennium. To explain the systematics behind viral marketing,
studies borrow insights from the Uses & Gratifications theory (Phelps et al., 2004), diffusion theory (Phelps et al., 2004), social network analysis (Hill, Provost, & Volinsky
2006; Domingos & Richardson, 2001) and
word-of-mouth theory (Helm 2000; Cruz &
Fill, 2008; De Bruyn & Lilien, 2008).
However, contrary to what one would expect, only a few empirical studies have been
conducted in the domain up till now. For example, it remains unclear which characteristics are shared by consumers who forward
these viral messages, what their reasons are
for doing this and what the effectiveness of
viral marketing is. Therefore, it may not come
as a surprise that guesswork and low success
rates are common for viral marketing campaigns (Ferguson 2008; JupiterResearch,
2007). By testing the applicability of word of
mouth theory to viral marketing, this study
aims to offer researchers an empirically tested
framework for future research in the viral
marketing domain and offer professionals
guidance for constructing viral campaigns.
Word-of-mouth is usually characterized as
oral, person-to-person communication between a receiver and a communicator whom
the receiver perceives as non-commercial, regarding a brand, product, or service (Arndt,
1967). As the world entered the digital age,
some authors have included electronic media
in this definition (Buttle, 1998; Pastore, 2000),
others prefer to speak about electronic word of
mouth or eWOM (Vilpponen, Winter, &
Sundqvist, 2006; Hennig-Thurau et al., 2004).
In this report, we will use word-of-mouth as a
summarizing concept for both traditional and
electronic word-of-mouth. Word-of-mouth
marketing describes marketers’ attempts to
stimulate positive word-of-mouth via oral
communication and/or electronic media. Not
only is word-of-mouth theory often cited as a
valuable research framework for viral marketing, a number of authors perceive viral and
word-of-mouth marketing as one and the same
marketing technique (Rosen, 2000; Pastore,
2000). Both aim to stimulate consumers
without obvious commercial intents to pass on
commercial messages and, therefore, trust on
consumers’ intrinsic motivation.
However, next to this common denominator, viral and word-of-mouth marketing are
characterized by important differences, which
raises questions about the validity of word-ofmouth theory as a framework for viral marketing research. First of all, word-of-mouth messages can be passed on via all media types
while viral messages can only be sent via electronic media such as e-mail, chat, and social
media. Secondly, viral marketing adds multimedia elements, such as videos and music, to
the oral or written word-of-mouth communication (Dobele, Toleman, & Beverland, 2005).
Thirdly, the content of word-of-mouth messages is fully determined by the sender, while
the content of viral marketing messages is for
the most part predetermined by the advertiser.
This relates to another difference between the
two marketing types: Marketers are the initiators of viral marketing campaigns, while their
influence is limited to stimulating consumers
to pass on an undetermined message in wordof-mouth campaigns (Woerndl, Papagiannidis,
& Bourlakis 2008). Finally, both word-ofmouth and viral marketing messages typically
Ketelaar and
a Schaerlaeekens
contain product
p
and//or brand infformation, but
b
viral marrketing messages alway
ys add sexuaal,
shocking
g, humoristicc, or other elements th
hat
aim to create
c
the viiral effect of
o exponentiial
spread (P
Porter & Gollan, 2006).
The arguments
a
in
n favor and against
a
the use
u
of word--of-mouth th
heory as a framework
f
for
f
viral maarketing reseearch show the need for
f
empirical evidence to
t give direcction to futu
ure
research. This is wh
hy it was deccided to stud
dy
the app
plicability of
o three central,
c
welldocumen
nted topics in word-of--mouth theo
ory
on viral marketing: namely, op
pinion leadeership, effeectiveness, and
a motives.
7
mouthh theory is tthus seen ass complemenntary
to difffusion theoryy.
Figuree 1. Simpliffied Versionn of the Twoo-step
Flow of Commuunication M
Model (Robinson
1976)
TH
HEORY
Characteeristics of the
t Senders of Word-of
ofMouth Messages
M
The two-step
t
flo
ow of comm
munication ded
scribes how
h
the diffu
usion of inno
ovations takes
place in two
t
steps: from
f
mass media
m
to opin
nion leadeers and then
n from opiniion leaders to
the rest of
o the populaation, the op
pinion follow
wers (Bereelson & Stein
ner, 1964; Katz
K & Lazarrsfeld, 196
66; Robinso
on, 1976; Rogers,
R
2003
3).
While th
he mass med
dia provide both opinio
on
leaders and opinion
n followerss with info
ormation in
n the first step,
s
opinion leaders use
this inforrmation to exert
e
influen
nce on the fo
ollowers’ opinions
o
in the second step
s
(see Fig
gure 1). The
T opinion leaders’ app
praisal is thu
us
of great importance for an inno
ovation’s su
uccess. Hee is responssible for thee S-curve th
hat
typifies the
t diffusion
n of successsful productts,
political views, etc. (Rogers, 20
003). By tellling otherrs about these new ideas and productts,
the numb
ber of adopteers explodes.
As opinion
o
lead
ders exert th
heir influencce
via interp
personal com
mmunication
n, it is geneerally acceepted that opinion
o
lead
ders persuad
de
their followers by usse of word-o
of-mouth meesRogers, 200
03; Arndt, 1967; Engeel,
sages (R
Kegerreis, & Black
kwell, 1969). Word-o
of-
Quuestioning th
the applicability of worrd-ofmouthh theory to vviral marketting, we deccided
to deteermine whetther opinionn leaders alsoo use
viral m
marketing m
messages to exert their iinfluence. These messsages seem well suitedd as a
substittute to (possitive) wordd-of-mouth messages,, because off their conteent that is m
meant
for am
musement annd the little effort needed to
forwarrd them to a large num
mber of perrsons.
There fore it is exxpected thatt opinion leaaders
are m
more frequennt senders off viral markketing
messaages. As oppinion leadeers typically only
exert their influennce in one or two dom
mains
(e.g., politics, fasshion, soccerr) (Rogers 22003;
Feick & Price, 19987), this inccreased channce of
forwarrding a viraal marketing message is only
expectted when the message ccontent lies iin the
opinioon leader’s field of inteerest. Thuss, we
believve, for exampple, that an opinion leadder in
moviees will have an increaseed chance off forwardinng a viral m
marketing m
message abouut the
latest blockbusterr, while an oopinion leadder in
fashioon will have a higher tenndency to paass on
a viraal marketingg message aabout a clothing
brand..
H11a: Opinionn leaders forrward viral markeeting messagges about prroducts or brrands
in their field of interest more frequuently
thaan opinion ffollowers.
8
This study not only examines the effect of
opinion leadership on the diffusion of viral
marketing messages, but also whether the
characteristics that are typically ascribed to
opinion leaders have the same effect as in
word-of-mouth marketing. Opinion leaders
can only exert their influence because they
possess the necessary persuasion skills and
the needed expertise to convince others (Corey, 1971; Rogers & Cartano, 1962; Rogers,
2003). To build this expertise, they use those
mass media that inform them about their field
of interest more frequently than opinion followers (Katz & Lazarsfeld, 1966; Brooks,
1957; Corey, 1971). An opinion leader in
sports thus has a higher chance of reading
Sports Illustrated than his followers while an
opinion leader in stocks and trading probably
prefers Business Week.
Furthermore, opinion leaders are more
innovative than opinion followers. Being
competent and trustworthy sources of information to their followers, they need to stay in
touch with the latest trends and innovations
(Rogers, 2003).
Finally, research shows that opinion leaders score significantly higher on cosmopoliteness than opinion followers (Rogers, 2003),
which means that they have a greater interest
in international issues, other cultures, and
events occurring in other countries (Jeffres et
al., 2004). This international orientation gives
them the possibility to break free from their
local social system and to explore new ideas.
Believing that viral marketing messages make
up a good substitute for word-of-mouth messages, we have the following expectations:
H1b: A positive correlation exists between, on the one side, the frequency of forwarding viral marketing messages and, on the
other side, the use of mass media that inform
about the message’s product category and the
degree of innovativeness and cosmopoliteness.
Effectiveness of Word-of-Mouth Messages
There is little doubt about the decisive role
that word-of-mouth plays in the success of
products and brands. Not only purchasing
behavior (Price & Feick, 1984; Udell, 1996;
Arndt, 1967), but also consumer expectations
(Zeithaml & Bitner, 1996), feelings and attitudes before (Herr, Kardes, & Kim, 1991) and
after the product purchase (Bone, 1995) are
heavily impacted by word-of-mouth messages.
Assuming that word-of-mouth and viral
marketing rest on the same principles, it is
expected that viral marketing messages also
contribute to the success of products and
brands. The reasoning that people are convinced more easily because of the noncommercial intentions seems to hold true for
viral marketing too (Brooks, 1957; Dobele,
Toleman, & Beverland, 2005). The research
of Phelps et al. (2004), supports this view.
Their study proved that consumers do not perceive an e-mail with product information as
junk mail when it comes from someone they
are acquainted with. Even more, they suppose
it must be a valuable product and that the
sender wanted to inform them about it.
Among authors, there is little consensus
about the best metrics to evaluate viral marketing campaigns (Cruz & Fill, 2008).
Although reach is measured for most
campaigns, several professionals and academics, including ourselves, are convinced that
this is insufficient as the only indicator for
success or failure (Cruz & Fill, 2008; Bazadona, 2000; Ferguson, 2008). This is why it
was decided to take a look at the predominant
model in advertising research, namely the hierarchy of effects model (Vakratskas & Ambler, 1999), to determine the right metrics.
This renowned model is actually a collection
of different models sharing the view that
awareness, attitude, and trial are the three
consecutive steps in the buying process
(Vakratsas & Ambler, 1999).
Ketelaar and Schaerlaekens
As attitude has the most direct influence
on purchase in this model and its effect has
already been proven in word-of-mouth research (Herr, Kardes, & Kim, 1991; Day,
1971), it was decided to focus on this variable
in our study. Therefore, the resulting hypothesis is the following:
H2: Viral marketing messages positively
influence viewers’ attitudes towards the
depicted brand and product.
Motives to Pass on Word-of-Mouth Messages
Many studies have shown that positive
experiences lead to positive word-of-mouth
(Anderson, 1998; Hartline & Jones, 1996) and
negative experiences to negative word-ofmouth (Mangold, Miller, & Brockway, 1999;
Anderson, 1998; Richins, 1983). This study
explores whether these positive experiences
also make up a motive to forward viral marketing messages. Negative experiences will
not be studied, as the creators of viral messages do not intend to produce these.
Product satisfaction is a first motive that
we expect to play a similar role in the diffusion of word-of-mouth and viral marketing
messages. A number of studies have already
proven that product satisfaction shows a positive correlation with the passing on of wordof-mouth messages by consumers (Anderson,
1998; Hartline, 1996).
A person that is more satisfied about a
product thus has a higher tendency to tell his
friends and acquaintances about it. Given that
viral marketing messages typically speak positively about the depicted product and that it is
easy to forward them to many people at once,
they seem to be the ideal means to convince
others of a product’s quality. Because of this,
it is expected that the frequency of forwarding
a viral marketing message will be higher when
people are more satisfied about the quality of
the depicted product.
9
H3: Satisfaction about the product depicted in a viral marketing message correlates
positively with the chance of forwarding
the viral marketing message.
Another motive that is expected to drive
consumers to pass on both word-of-mouth and
viral marketing messages is pleasure. Although authors have labeled this concept in
different ways, it has been identified in several
studies. Dichter (1966) wrote about message
involvement or the pleasure of telling others
about unique or intriguing advertisements and
public relations. Engel, Blackwell, and Miniard (1983) then turned this concept into message intrigue or the entertainment resulting
from talking about certain ads or selling appeals. Five years later, Rubin, Perse, and Barbato (1988) introduced the term pleasure when
writing about the passing on of word-ofmouth messages because it is fun, stimulating,
and entertaining. Finally, authors recently
identified pleasure as a motive to forward viral
marketing messages (Phelps et al. 2004). We
therefore expect to find the following result:
H4: Pleasure is a motive to forward viral
marketing messages.
METHOD
By use of an online survey, the characteristics of the forwarders of viral marketing
messages, the effectiveness of these messages,
and the motives for passing them on were
studied. A quasi-experimental design was incorporated in this survey in order to test the
effectiveness in a valid way. At random, participants were assigned to one of two conditions. Both groups received the same questions and were exposed to the same viral marketing messages, except for one detail: The
logo that was shown at the end of the viral
marketing message for the Xbox 360 game
console. Next to the original version, a new
version was created in which this logo was
10
replaced by the one of PlayStation 3. While
half of the respondents watched the former
version, the others were shown the latter. By
studying the effect of this difference on the
preference for either PlayStation or Xbox, the
effectiveness of viral marketing messages
could be tested.

Material
As they are a commonly used type of viral
marketing, viral commercials were chosen as
the central subject in this study. They can be
described as short advertisements for a product or service that are meant to be passed on
from consumer to consumer via electronic
media.
In total, respondents viewed four viral
commercials. These were selected based on
five criteria. First of all, viral commercials
that required too specific knowledge were excluded. Secondly, the viral commercials
could only contain text in Dutch or simple
English to ensure that all respondents would
understand the content. Thirdly, they had to
contain a clear depiction of the brand name to
prevent respondents from confusing them with
other types of online movies (e.g. homemade).
Fourthly, hyperlinks to external websites
could not be included in the viral commercials, as these might draw away respondents’
attention from the survey. Finally, only commercials that contained humor or a surprise
element were selected, as research shows that
this increases the chance of them being forwarded (Dobele et al., 2007). In addition, in
one of the viral commercials it had to be possible to replace the depicted brand without altering the other content.
The four chosen viral commercials were:
 Walk-in Fridge by Heineken: The
screaming of women being shown a
new walk-in closet is being drowned
out by the shouting of men being
shown a new walk-in fridge full of


Heineken beers. http://www.youtube.com/watch?v=yIu
tgtzwhAc
Time Traveler by Apple: A PC and
Mac computer are personified. PC
travels to the future to find out whether PCs will ever get rid of their
hassles. Arriving there, it appears
that
future
PC
has
frozen.
http://www.youtube.com/watch?v=6Y
tHjfvn4Kw
Supermarket by Zazoo: Because his
father does not want to buy him candy, a boy starts screaming and throwing things on the supermarket’s floor.
After several close-ups of the father
sighing, the message “Use condoms”
and Zazoo’s logo is shown.
http://www.youtube.com/watch?v=A9
CwS2ri2Jc
Standoff by Xbox 360: Two men
pointing a gun at each other are the
start of a huge shootout. However,
nobody is carrying real guns. Everybody just acts like he is holding a
weapon.
http://www.youtube.com/watch?v=Co
A5mC5FgIw
This last viral commercial (Xbox 360) was
edited. Next to the original Xbox 360 version,
another version was created that ended with
the logo of the other well-known game console, PlayStation 3.
Participants
The population was made up of youths, as
they are the most active users and forwarders
of online videos (Pew Research Center, 2007).
For the online survey, 2000 university students of various fields of study were invited to
participate. Invitations were only sent out to
first-year students, as they are not yet very
familiar with scientific research. To ensure
that only youth would participate in the sur-
vey, it was decided to exclude all respondents
outside the age category of 16 to 25 years.
466 students filled out the survey. The answers of four respondents whose ages were
above 25 were excluded. The number of men
(52.2%) and women (47.8%) who participated
in the survey was about equal. As the survey
was sent out to first-year students at university, it may not come as a surprise that most respondents were either eighteen (39.6%) or
nineteen (38.1%) years old.
Measurement
Forwarding behavior was tested by asking
respondents to indicate on a five point Likert
scale how likely they would be to forward the
Standoff viral commercial (at random either
the Xbox 360 or Playstation 3 version) to
friends and/or acquaintances when receiving it
from a friend. Furthermore, participants were
asked to rate the viral commercial on different
evaluation criteria, such as amusement and
originality, and to indicate their satisfaction
with the depicted product, all on a five point
Likert scale. Opinion leadership was measured by using Childers’ self-designating scale
(α = .83), which was adapted to fit game consoles as product category (1986). Scores on
innovativeness and cosmopoliteness were determined by using scales designed by Raju (α
= .845) in 1980 and Jeffres et al. (α = 0.63) in
2004, respectively. One item, “the number of
times traveled abroad,” was left out of the
analysis, as the correlation with the factor
cosmopoliteness proved to be too low (r =
.346).
Furthermore, respondents had to indicate
on a five point Likert scale how often they
read gaming magazines, visited websites
about gaming, etc. in order to measure their
use of mass media in gamers’ field of interest.
To assess effectiveness of the Standoff viral
commercial, participants had to rank
Playstation, Xbox, and Nintendo in order of
preference. Finally, Rubin, Perse, and Barba-
11
to’s scale (1988) was chosen to measure the
motive pleasure (α = .89).
Procedure
Students who decided to participate in the
online survey were first asked to view the
Standoff viral commercial. At random, either
the Xbox 360 or PlayStation 3 version was
shown. Next, the participants were questioned
about how likely they were to forward this
movie to friends and acquaintances, given that
they had received it from a friend themselves.
To control for people who had already seen
the viral commercial, the respondents were
also asked whether they had already seen the
movie in the past. This series of questions
ended with seven criteria (originality, amusement, etc.) on which the participants had to
rate the viral commercial and a scale on which
they had to indicate their satisfaction with the
depicted product. Next, opinion leadership,
mass media use, and cosmopoliteness were
measured with the scales cited in the previous
paragraph. The questions about innovativeness and the request to rank the three brands,
which yielded the results needed to determine
the viral commercials’ effectiveness, followed. After shortly explaining what viral
commercials are, participants were asked to
watch the three selected viral commercials,
Walk-in fridge by Heineken, Time traveler by
Apple, and Supermarket by Zazoo, in order to
create a clear understanding of the concept.
This was done with the aim of increasing
the validity of students’ answers to the questions that followed about their motives to forward viral commercials. Finally, respondents
were asked for their gender, age, and field of
study.
RESULTS
Hypothesis 1a postulates that opinion
leaders forward viral marketing messages
about products or brands in their field of in-
12
terest more frequently than opinion followers.
Although the correlations are low, this hypothesis receives support.
Respondents who score higher on opinion
leadership when it comes to game consoles (α
= .910) have a higher tendency to forward the
Standoff viral commercial to friends and acquaintances (r = .169, p < .01).
Hypothesis 1b proposes that a positive
correlation exists between, on the one side,
the frequency of forwarding viral marketing
messages and, on the other side, the use of
mass media that inform on the message’s
product category and the degree of innovativeness and cosmopoliteness. Although the
correlations are low, this hypothesis receives
support. This hypothesis receives partial support. The results show that people who read
more gaming magazines, visit more websites
about gaming, etc. are indeed more inclined to
pass on the Standoff viral commercial (r =
.122, p < .05). Likewise, cosmopoliteness (α
= .704) shows a positive correlation with the
tendency to forward the viral commercial (r =
.108, p < .05).
Hypothesis 2 suggests that viral marketing
messages positively influence the viewers’
attitude towards the depicted brand and product. This hypothesis does not receive support.
Whether respondents had seen the Playstation
3 or Xbox 360 version does not influence the
number of times Playstation and Xbox were
ranked first (X²(2) = 1.259, p = .533), second
(X²(2) = .049, p = .976) or third (X²(2) = 1.35,
p = .509).
Hypothesis 3 proposes that satisfaction
about the product depicted in a viral marketing message correlates positively with the
chance of forwarding the viral marketing
message. This hypothesis receives partial
support; the correlations are low.
Respondents who are more satisfied about
the product depicted in the Standoff viral
commercial are indeed more inclined to forward it (r = .158, p < .01).
However, when directly asked whether
product satisfaction is a motive to forward
viral commercials, respondents replied negatively.
Hypothesis 4 suggests that pleasure is a
motive to forward viral marketing messages.
This hypothesis receives support. Again, the
correlations are low.
Respondents who derive more pleasure
when viewing the viral marketing message are
indeed more inclined to forward it (r = .158, p
< .01). A one-sample t-test shows that this
difference is significant (t(185) = 2.01, p <
.05). Therefore, pleasure (α = .792) is accepted as a valid motive.
To further clarify what determines the
success of a viral marketing campaign, the
different predictors of forwarding the viral
commercial were included in a series of multiple regression analyses. The result of this is
an integrated model that possesses explanatory value (see figure 2).
The analyses reveal that the evaluation of
the viral commercial is the only direct predictor of forwarding it (r = .520, p > .01). This
variable is a factor made up of the different
evaluation criteria (originality, amusement,
etc.) questioned right after the viral commercial was shown. It can be described as the
extent to which the respondent likes the viral
commercial’s content.
The evaluative score is positively correlated to both cosmopoliteness (r = .120, p > .01)
and product satisfaction (r = .321, p < .01).
Who scores higher on cosmopoliteness and
product satisfaction will thus, on average, also
evaluate viral commercials better and therefore have a higher chance of forwarding them.
Product satisfaction shows a positive correlation with opinion leadership (r = .278, p <
.01), which is in turn positively related to the
use of mass media within the opinion leader’s
field of interest (r = .657, p < .01). Table 1
gives an overview of the correlations that exist between all the predictors.
13
Figure 2. Integrated Model of Predictors of Forwarding the Standoff Viral Commercial
.278**
Product satisfaction
.321**
Evaluation of viral
commercial
Opinion leadership
.657**
Use of mass media
within field of interest
.520**
Forwarding of viral commercial
.120**
Cosmopoliteness
Note: N=462 **p < .01, two-sided
DISCUSSION
Theoretical Implications
The aim of this study was to study the applicability of three central, well-documented
topics in word-of-mouth theory on viral marketing. The results show that word-of-mouth
theory is a valuable framework for viral marketing research. First of all, those people
identified as opinion leaders in word-of-mouth
research also use viral marketing messages to
exert their influence in the online world.
Knowing this, it may not come as a surprise
that also the scores on opinion leadership’s
characteristics show a positive correlation
with the forwarding of viral marketing messages. Only innovativeness proved not to be a
valid predictor. This might be due to the fact
that we used a generic instead of domain specific measurement scale, such as Goldsmith
and Hofacker’s (1991), to measure the variable. Also the motives found to be responsible
for passing on viral marketing messages support the view that word-of-mouth theory can
help explain the systematics behind this new
marketing technique. Product satisfaction and
pleasure proved to be not only the drivers of
passing on word-of-mouth, but also of viral
marketing messages. It should be noted that
respondents denied that product satisfaction
was a motive for forwarding the viral marketing message when directly asked for it.
Therefore, we suggest that people might be
unaware that this motive drives their behavior.
Unexpected was the result that exposure to the
viral marketing message did not lead to an
improved attitude towards the depicted product and brand, whereas word-of-mouth messages heavily impact these attitudes (Herr,
Kardes, & Kim, 1991; Anderson, 1998).
This study contributes to a better understanding of the relationship between word-ofmouth and viral marketing in many ways.
Several authors have assumed this to be a oneon-one relationship, and this study offers a
first empirical assessment of the popular belief
that word-of-mouth and viral marketing work
along the same lines. The results support the
view that many similarities between the two
14
Table 1. Correlations between the Predictors of Forwarding the Standoff Viral Commercial
Forwarding be- Product satis- Opinion
havior
faction
ship
leader- Use of mass meEvaluation of viral
Cosmopoliteness
dia
commercial
Forwarding behavior
1.000
.217**
.169**
.122**
.108*
.520**
Product satisfaction
.217**
1.000
.278**
.239**
-.004
.321**
Opinion leadership
.169**
.278**
1.000
.657**
-.066
.219**
Use of mass media
.122**
.239**
.657**
1.000
-.075
.151**
Cosmopoliteness
.108*
-.004
-.066
-.075
1.000
.120**
.321**
.219**
.151**
.120**
1.000
Evaluation of viral com.520**
mercial
Note: N=462, *p < .05, two-sided, **p < .01, two-sided
indeed exist and that word-of-mouth theory
can be a very useful framework in studying
viral marketing. However, these results also
show that word-of-mouth and viral marketing
cannot just be viewed as one and the same
concept. On the one hand, motives, opinion
leaders, and all but one of opinion leadership’s
characteristics are the same for word-of-mouth
and viral marketing, but, on the other hand,
viral marketing does not possess word-ofmouth’s effectiveness, and innovativeness is
no predictor of forwarding viral marketing
messages. Although further research is needed to support this view, it looks like viral marketing is just one type of word-of-mouth marketing. It shares a common core with wordof-mouth marketing, but also has distinct
characteristics and effects. It is advised to
take a look at over half a century of word-ofmouth research and to determine which other
concepts and theories prove to be of value for
viral marketing. Building on this vast amount
of research will definitely facilitate the discovery of new insights in the field of viral
marketing and further clarify the relationship
between word-of-mouth and viral marketing.
Conversely, innovative viral marketing research might yield useful insights for word-ofmouth theory.
Practical Implications
Although found correlations in our study
are low for all hypotheses, some practical implications seem justified. The results of this
study provide advertisers and marketers with
some best practices in creating and launching
a successful viral marketing campaign. To
begin with, opinion leaders should be targeted
when spreading or seeding the viral marketing
message, as they have an increased chance of
forwarding the message. Assuming that they
like the message and the depicted product,
these opinion leaders will take over the advertisers’ work and spread the message to the rest
of the population. To reach these opinion
15
leaders, the users of mass media focusing on
the relevant product category should be targeted. A producer of game consoles would,
for example, be advised to send out his viral
messages to the members of gaming communities and readers of gaming magazines. The
fact that product satisfaction is a predictor of
forwarding behavior deserves extra attention.
This shows that viral marketing is not a cureall for disliked products, but can be a great
way of using new media to attract new customers for products that people are satisfied
with. Furthermore, our research showed that
single exposure to a viral marketing campaign
is not enough to influence product and brand
attitude. Therefore, viral marketing messages
seem more suited to improve awareness. Although the effects on attitude have not been
studied yet, another option is to ensure repeated exposure to the campaign. This could, for
example, be done by creating messages that
are that well suited or intriguing in order for
people to view them multiple times or by
launching a campaign with content that
changes over time.
Limitations
This study has some limitations. First of
all, the subject of this research was limited to
viral commercials. Although we expect the
conclusions to be generalizable to all types of
viral marketing, further research is needed to
empirically support this assumption. Secondly, game consoles were the only product studied in the survey. Although there are no indications that the chosen product category influences the results, we do recommend replicating the study with other product categories.
Thirdly, the population was limited to students, as youngsters are the most active viewers and forwarders of online video (Pew Research Center, 2007). Therefore, a replication
study for other populations should be conducted.
16
Future Research
REFERENCES
The study’s first recommendation is to further explore the applicability of concepts and
theories studied in word-of-mouth research to
viral marketing. Interesting topics are for example the credibility that receivers ascribe to
senders of word-of-mouth messages (Brooks,
1957), the higher socialness and socioeconomic status of opinion leaders (Rogers,
2003) and the effect of strong and weak ties
(Granovetter, 1973). By replicating these
studies for viral marketing messages, the value
of word-of-mouth theory as a framework for
viral marketing research can be further determined.
Secondly, we are convinced that the
amount of product information in a viral marketing message affects the applicability of
word-of-mouth theories and concepts. We
already stressed that viral marketing messages
seem well suited as a substitute for word-ofmouth messages because their content is
meant for amusement and the little effort is
needed to forward them to a large number of
persons. By adding product information,
these messages get more similar to word-ofmouth messages and even coincide with them
in our opinion. Therefore, we recommend
controlling to find whether the applicability of
word-of-mouth theory to viral marketing messages improves as word-of-mouth messages
contain more product information.
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innovative ways to explore the systematics
behind viral marketing in future research.
Technical developments make it very easy to
study how the viewing of viral marketing
messages evolves over time, how these messages spread online, who are the most influential forwarders and their demographics, etc.
Choosing for this type of field research to
study natural behavior will not only enjoy a
very high validity, it will also prove to be the
perfect complement to studies in a more experimental setting.
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Is Your Perception of “Luxury” Similar to Mine?
A Concept Made of Absolute and Relative Features
Taylan Urkmez
Ralf Wagner
ABSTRACT. Luxury is a relative feature of goods and services. Despite the many empirical studies that
have been conducted, marketing scholars have not agreed on a common definition or interpretation of the
term “luxury” so far. This deficit causes improper interpretations and, thus, evokes a kind of growing
conceptual confusion. Additionally, the increasing interest in luxury in recent years has contributed unintentionally to the ambiguity of the term. Advertising agencies consciously or unconsciously aim to take
advantage of the confusion around the concept and propose the “attribute” of luxury for all kinds of trading up purposes. This article aims to contribute to a clarification of the concept of luxury by going deep
into the relativity of this attribute and the related characteristics of luxury products. We present a scheme
summarizing previous conceptual contributions.
KEYWORDS. Relativity, inaccessible luxury, intermediate luxury, accessible luxury, perception
INTRODUCTION
A fresh look at the perspective of luxury
is given by Heine (2011), who argues that
luxury is a relative concept, depending upon
who we get the subjective perception from.
Despite substantial empirical research efforts,
academic discussion has not agreed on a
common definition of the concept of luxury.
The ambiguity in the definition might be
traced back to distinct perceptions in consumers’ minds. Clearly, both luxury products and
luxurious images are unlikely to be the same
for all consumers. Although France and Italy
are the two prominent luxury source countries,
we can see luxury production almost in all
countries (Seringhaus, 2005). Notably, this
ambiguity in the definitions of “luxury” and
“luxurious” cause vendors and consumers to
refer to the term “luxury” even for some irrelevant products. “Luxury” is an integrative
term that arouses someone’s appetite and
makes them envious of others. Some consumers aspire to associate themselves with the
term “luxury” and to make use of its lustrous
aspect. In this vein, Silverstein and Fiske
(2003) as well as Truong, McColl, and Kitchen (2009) have stated that some non-luxury
brands use the concept of luxury in naming
their products, and in this way take advantage
of the confusion around the concept. Kapferer
Taylan Urkmez is a Ph.D. student at the SVI Endowed Chair for International Direct Marketing,
DMCC- Dialog Marketing Competence Center, the University of Kassel, Kassel, Germany. Ralf Wagner,
Ph.D., is Professor of Marketing at the SVI Endowed Chair for International Direct Marketing, DMCCDialog Marketing Competence Center at the University of Kassel, Kassel, Germany.
Address correspondence to Taylan Urkmez, Chair for International Direct Marketing, DMCC- Dialog Marketing Competence Center at the University of Kassel, Kassel, Germany. E-mail: uerkmez@wirtschaft.uni-kassel.de
20
Urkmez and Wagner
and Bastien (2010) suggested that the term
“luxury” appears in all sectors and nearly every type of product claims to be luxurious or
strives to be a “true luxury” for customers
who are willing to pay for it.
Related terms such as “deluxe,” “premium,” “ultra-premium,” “grand,” “exclusive,”
“opuluxe,” and “hyper-luxury” are used by
practitioners in the business world for attaching their products to the luxury concept.
However, this practice contributes to the complexity of the term “luxury” (Kapferer & Bastien, 2009).
Resolving the current confusion related to
the concept requires a clear distinction of interpretations that emphasize the relativity of
luxury. Everyone understands the term “luxury,” but almost nobody agrees on the explicit
description or implications of it. This uncertainty in the meaning and existence of everincreasing analogous terms for the concept of
luxury damages the leverage effect in product
positioning. A clarification might become essential, especially for business practitioners,
because non-luxury products are unlikely to
be dealt in the same way as luxury products
(Kapferer & Bastien, 2010). To promote the
discussion around the concept of luxury, this
study provides a scheme that researchers
might use to understand the different types of
luxury.
In this paper, we will work along two
paths in order to reach our goal. In the next
section we describe and summarize the criteria
discussed in previous scientific studies. In the
second section, we focus on the relativity of
criteria used for characterizing consumption.
In the third section, we review the criteria
characterizing luxury goods and services. In
the fourth section, we wrap up this discussion
by focusing on people’s perceptions and suggest a classification scheme.
Based on this, in the fifth section we take
the second path by adding the consumers’ perspectives. We outline the procedure for conducting qualitative interviews and the results
21
of these. A discussion of the results, implications, and conclusions are presented in the
sixth section.
RELATIVITY OF LUXURY
The authors’ understanding of the relativity of luxury is based on the distinction between quantitative and qualitative luxury.
Luxury has been defined as something expensive and excessive (Sombart, 1913, as cited in
Heine, 2011). However, Berry (1994) argued
that the distinction between quantity and quality clarifies the concept, and the confusion
with regard to luxury and superfluity is
solved. Berry provides the example of screws
to secure a shelf. If six is the optimum number to fix it, then the seventh screw would not
be seen as a luxury but as superfluity. However, the decision of what is excessive or more
than necessary alters depending upon the point
of view. Luxury by itself is a relative and subjective term (Büttner, Huber, Regier, &
Vollhardt, 2006). At this point, the relativity
of perceptions becomes effective. The relativity of luxury is captured by five exhaustive
categories: regional, temporal, economic, cultural, and situational.
Regional Relativity
Some items referred to as luxury depending upon their local availability. Rarity contributes to the conversion of some specific
items to luxury items. Some goods are easily
available in some parts of the world where
they are either are free of charge or worth little, but they may be appraised as luxurious
because of their rarity in another part of the
world. A sunny day is a luxury in some parts
of the world; however, it is quite ordinary for
people living in Mediterranean countries.
Goods are called luxury if they are rare in
some locations (Heine, 2011; Merki, 2002;
Reith & Meyer, 2003). For example, prawns
are a luxury in some parts of the world, and
22
customers need to pay much money to eat
them at restaurants, while in Turkey they are
mostly used as a fishing bait by local fishers.
Temporal Relativity
Temporal relativity refers to changes in
the perception of products or services over the
course of time. Some perceptions cannot resist the ever-changing effect of time and lose
their validity: What is luxury today might not
be a luxury in future. Industrial developments,
the changing structure of societies, or changing conditions of demand might be determinants in this change (Kapferer & Bastien,
2010). A luxurious model of a car brand
manufactured ten years ago is no longer a luxurious model today in the perception of most
people. Additionally, the positioning of a luxury brand might be affected by erosion because of brand extensions or the enlargement
of the customer portfolio to include groups
with a lower social status.
In past times, even in the rich societies,
the majority struggled for sustenance. However, today most basic needs are assured for
the majority. Some former luxuries, like durable goods, entertainment, and recreation are
judged to be personal necessities and are assured for a remarkable part of the population
in today’s world. These changes are part of a
luxury–necessity continuum. Some electronic
gadgets, including tools such as vacuum
cleaners and washing machines are regarded
as household necessities for daily life by people on many continents today, while they were
regarded as luxuries less than hundred years
ago over the whole world (Matsuyama, 2002).
Economic Relativity
This quality refers to peoples’ potential to
access the resources. When people are capable
of accessing the resources, it might not be a
luxury for them; however, they stay a luxury
for people who are not capable of accessing
the same resources because they are highly
priced (Heine, 2011).
It may be evident that even today the notions of luxury and necessity for the items
mentioned above are linked to the wealth status of the households, and they may not be a
necessity in all societies. Still, for some minorities, some basic needs are not so easy to
acquire and they are still considered luxuries.
As the income in a household increases, the
notion of a consumer good is transformed
from a luxury to an amenity and then to a necessity (Matsuyama, 2002). For example, the
same car which might be considered a luxurious car in an underdeveloped or developing
country might be considered a basic, regular
model in a developed country (Matsuyama,
2002; Christodoulides, Michaelidou, & Li,
2009).
Cultural Relativity
Cultural relativity is the way the desirability of some goods to people depends upon
their culture; while some goods or tastes are
quite fashionable in some cultures, they might
be seen useless, undesirable, or even disgusting in another culture (Kapferer & Bastien,
2009). For instance, champagne can be a luxurious product in European countries; however, it is not in Islamic countries. The same is
valid for a Lamborghini racing car for someone from an Amazonian tribe (Berthon, Pitt,
Parent, & Bertho, 2009). As Heine (2011)
argued, every society has its own notions of
luxury. These notions can show changes over
time. Some subcultures in every society have
different notions of luxury according to their
members’ beliefs. Gold teeth were a symbol
of richness and luxury in Turkey in the 1980s.
However, this notion later transformed, and
gold teeth have become something that is undesirable, while they might still be a luxury
among some subcultures or on the margins of
society. On the other hand, gold teeth are still
a luxury in some countries like Tajikistan or
Urkmez and Wagner
India. For some specific product categories,
the effect of culture is less relevant and for the
most prominent luxury categories we are close
to reaching an independency of culture. Fashion and cars might be examples of such almost
culturally independent product groups. On the
other hand, in some specific product segments, such as food products, the effect of culture is more visible and demand is sharply defined by the culture (Wiedmann, Hennigs, &
Siebels, 2007).
Situational Relativity
Situational relativity refers to the ever
changing characteristics of relativity depending upon the conditions and the situations
people are in. Kemp (1998) argued that the
same good can be classified as necessary, ordinary, or luxurious depending upon the situation. For a better understanding, we can exemplify this by caviar, which is regarded as a
luxurious food for most people. If it were to
be given as the only option to eat, then it
would no longer be regarded as a luxury but as
something ordinary after few days. The opposite case is also possible. For instance, an ordinary food might become a luxury if it has
not been eaten for a long time or for years.
CHARACTERISTICS OF LUXURY
PRODUCTS AND SERVICES
One of the most prominent studies to define the perception of luxury on a crosscultural basis was that by Dubois, Laurent,
and Czellar (2001). They conducted crosscultural consumer-based studies in three different areas of Western Europe, the Asia–
Pacific Region, and USA. They came up with
a general definition of luxury as a combination
of six different dimensions: price, quality, aesthetics, uniqueness, extraordinariness, and
symbolism. Heine (2011) stated that consumers identify luxury products as having six
23
characteristics: price, quality, aesthetics, rarity, extraordinariness, and symbolism. Luxury
products to some degree embody these six
characteristics, termed constitutive characteristics, in their content.
The characteristics of luxury are intertwined with each other, as each characteristic
is logically linked to others. All six items as a
whole contribute to the definition and the existence of luxury. If a product is not produced
in large volumes it is rare, and it is this characteristic of rarity which brings the characteristic
price with it. It is natural to assess a product
as highly-priced because of its scarcity. Also,
it has been proven that if something is expensive, consumers mostly associate the product
with high quality (Dodds, Monroe, & Grewal,
1991; Dubois et al., 2001; Mortelmans, 2005;
Trommsdorff, 2009; Wiedmann et al., 2007).
Luxury products contain both consequences like prestige and characteristics such
as rarity (De Barnier, Rodina, ValetteFlorence, 2006; Kapferer, 2001; Königs &
Schierech, 2006; Lipovetsy & Roux, 2003, as
cited in Heine, 2011; Nia & Zaichkowsky,
2000; Mc Kinsey, 1990, as cited in Wiedmann
et al., 2007). The view of Lombard (1989, as
cited in Heine, 2011) as well as Nueono and
Quelch (1998), which has been shared by Alleres in recent years (2003, as cited in Heine,
2011), is that the characteristics are not always
clearly defined, and it may not be easy to understand what is meant by high product quality
LUXURY PERCEPTIONS
Luxury is not a stable concept by itself,
and it is subject to continuous change, like life
itself. It is important to see that something
that used to be luxurious in the past in a specific country may no longer express such a
meaning to people living in that country or to
people visiting the country regularly. This
change is related to the relativity of luxury.
Furthermore, it is closely connected to the
24
Table1. Characteristics of Luxury Products
Characteristics
Price
Quality
Aesthetics
Rarity
Extraordinariness
Symbolism
Definition
Most investigated and mostly uttered characteristic of
luxury products among the all characteristics (Heine,
2011, p. 48; Kwan Li, Monroe, & Chan, 1994, p. 449;
Meffert & Lasslop, 2003, p. 5).
Consumers perceive pricey products as high quality,
hence it is always considered that luxury products have
been manufactured to a high standart and great effort has
been put into production, especially if there is craftmanship involved (Heine, 2011, p. 95; Nueno & Quelch,
1998, p.65).
Material is the second important aspect of the quality
issue (Jeine, 2011, p. 65).
It signifies the taste of upper class consumers and connects to cultural relativity (Kapferer, 2001, p. 322). It is
an important differentiation point of luxury product
manufacturers from other mass market manufacturers
(Dubois, 2001, p. 13).
Rarity is a highly desired characteristics by most consumers, who feel more satisfied when they use or own a
rare item and who usually justify high payment for the
item by reason of rarity.
Two types of rarity exist: By limiting the production and
natural limitation arising from availability of the material.
Luxury products should be different from ordinary
items. This extraordinariness is mostly associated with
design or construction (Goody, 2006, p. 344).
A clear distinction between mass-market and luxury
products is between the functional and non-functional.
Mortelmans (2005, p. 505) and Heine (2011, p. 99) argued that the luxury industry is the main one where
symbolism has more meaning for consumers than functionality.
perception of luxury. We expect that different
sets of people have perceptions and understandings of luxury that might be different in
Germany, Turkey, or the US.
Emotions are relevant to luxury companies for creating a perception of luxury in the
consumers. That is why they use similar messaging in the advertisements or in their public
relations campaigns. Ward and Chiari (2008)
emphasized the contribution of emotions in
purchases of luxury products by highlighting
In Practice
Even a Starbucks coffee is luxurious
for someone who is not able to afford to pay double price instead of a
regular coffee from any other shop.
Lange & Söhne wristwatches require a lot of effort and handcrafting
and it takes more than a year to
manufacture a watch.
Plastic has always less quality than
any other metal in people’s perception.
Luxury cars have always different
designs.
Expensive work of arts address
tastes of luxury consumers.
Limited edition production of companies
Saffron spice is rare in nature.
Noble metals are not easily found in
nature.
Specialized designers and experts
work for the luxury companies and
create some unusual items to differentiate them from others.
The perfume brand „Chanel 5“ has
a symbolic value for women (Weifang, 2011).
Passengers’s impulse shopping behaviour is determined by the airport
influences on impulse shopping and
airport retailing environmental conditions (Omar, 2005).
that customers are willing to pay more to enhance their positive emotions. This instinctively directs them to genuine luxury products
rather than fake or counterfeit ones. These
customers aspire to the experience itself, not
the logo. Luxury as a concept is inclined to be
an experience of genuineness (Atwal & Williams, 2009; Visconti, 2010).
Catry (2003) argued that consumers distinguish themselves from others by purchasing
luxury products, and in this way they have the
Urkmez and Wagner
emotional value of owning “a well-crafted and
rare object” (p. 11). Luxury is between two
opposite poles: At one end it is a feeling of
being a part of something, a community; at the
other end, it is a feeling of being detached and
feeling different from others. Ward and
Farmaki (2006) indicated that luxury is sometimes social inclusion and sometimes exclusion.
The driving feature of the traditional luxury product is its inaccessibility. The more
the product is inaccessible, the more people
will dream of owning it. Obstacles and inaccessibility help create the increasing desire for
25
the luxury product. Massifying brands while
simultaneously making access to the products
easier increases sales and causes brands to be
trivialized and lose their brand exclusiveness
(Bastien & Kapferer, 2009; Dubois & Czellar,
2002).
Alleres (as cited in Vickers & Renand,
2003) built on a system of hierarchy and defined the accessibility of luxury goods to consumers on different socio-economic levels.
Inaccessible luxury, intermediate luxury, and
accessible luxury are the elements which build
up the hierarchical framework (see Figure 1).
Figure 1. A Hierarchy of Luxury Goods Products (modified from Alleres, 1990 and Vickers &
Renand, 2003)
Elite Class
Inaccessible Luxury
Professional Class
Intermediate Luxury
Middle Class
Economical
Relativity
Accessible Luxury
Temporal
Relativity
Situational
Relativity
Although Alleres suggested a restricted
accessibility and no transition between levels,
a recent study (Granot et al., 2013) improved
the model one step further and introduced the
existence of transition ability shown with the
arrows. Here we bring a significant modification to Alleres’ model; we add dimensions of
relativity basing the triangle of Alleres which
signifies interconnection of five relativity concepts and hierarchy of luxury. Without taking
Regional
Relativity
Cultural
Relativity
the relativity dimensions into consideration,
even different levels of luxury would not be
well defined. What we propose is that relativity of luxury should be considered together
while defining the levels of luxury.
Consumers have started to trade up and
are willing to pay more for products introducing individually perceived value (Silverstein,
Fiske, & Butman, 2004). Tartaglia and Marinozzi (as cited in Ward & Chiari, 2008) con-
26
tributed the concept of three key luxury domains after several new luxury firms appeared
in the market. For inaccessible luxury, the
emphasis is on maintaining the impulsive
tendencies; for intermediary luxury, it is on
belonging to a luxury world and keeping up
with an exclusive lifestyle; for accessible luxury, it is to differentiate accessible products
from superior products and claim that they are
the gateway to the luxury world (Ward &
Chiari, 2008).
The inaccessible luxury segment has quality and uniqueness as its main characteristics,
and producers use the best materials in their
production. The price is high enough to enable the product to be afforded by only an elite
part of society, which gives the product exceptional social prestige. Rarity is a marketing
strategy that is sometimes achieved with limited distribution and sometimes with limited
production. Inaccessible segment customers
feel that they are special and value the worth
of the products they have purchased.
Customer satisfaction is at its highest level with this type of luxury; however, it is not
known whether this adds emotional value to
the product itself. Emotional value is seen to
be associated with “the new luxury,” which
heeds customers’ avidities and finds a place in
the luxury market (Vickers & Renand, 2003).
The characteristics mentioned above are
not such essential ones for intermediary luxury, which is one level down from inaccessible
luxury. In intermediate luxury, the perception
has a close relationship with the concept of
product tangibility (Ward & Chiari, 2008).
Consumers value intermediate luxury products
and services that are not too expensive to be
reached by the professional classes of society
(Vickers & Renand, 2003).
However, this does not mean that these
products do not offer quality, taste, and refinement. On the contrary, they possess these
values more than other products in their product segment (Silverstein et al., 2004).
One level down from the intermediate
luxury is mass luxury or accessible luxury.
Here, what is important is the glamour rather
than the product. The brand predominates
over the characteristics unique to luxury products (Ward & Chiari, 2008). The consumers
in this segment strive to be perceived as being
in a higher segment and to be respected for
their purchasing behaviour (Vickers & Renand, 2003). Mass luxuries are the low-priced
versions of the high-priced older luxury products. BMW offers high-priced cars to its addicted customers; however, its relatively lowpriced “1 series” is offered to middle class
people who cannot afford an expensive car but
who want to belong to the BMW world.
“Masstige” products are a class of products
mainly affordable to general society but still
perceived as luxury because they are above
the conventional products in their product category. The word “masstige” is a combination
of mass and prestige (Silverstein et al., 2004).
Ward and Chiari (2008) claimed that if
something becomes too widespread in its category then it is no longer considered a luxury.
To avoid that, its price needs to be high, and
its design needs to be unique, preventing it
from becoming too widespread and losing its
uniqueness. In an automotive industry context, Strach and Everett (2006) pointed out
that the consumers’ perceptions of the luxury
value of a brand is diminished if the luxury is
blended with mass-market brands.
Some goods, even water, might be a luxury or necessity depending upon the situation
and the circumstances. This brings us to another dimension of the argument. The same
goods under different circumstances sometimes become a necessity and sometimes a
luxury. Vigneron and Johnson (2004) suggested that the perception of luxury and the
level of luxury in a product or a brand are defined by the context and the people concerned.
They introduced a scale to measure perception
of luxury. This scale reveals the brands’ luxury impression and enables the brands’ relative
Urkmez and Wagner
positions to be estimated. In the authors’ case
study, Cadillac and Lincoln car brands may be
perceived as having the same level of luxury
perceptions, but the scale may reveal “their
overall brand-luxury perceptions are combinations of different evaluations of the same dimensions of luxury” (p. 485).
Relativity is a strong characteristic of the
term “luxury” and assigns different meanings
to the same products and services under different conditions. That is why the current
study revealing clearly the different types of
luxury and different types of relativity in different intersections might be helpful in explaining these concepts. The scheme in Table
2 makes it possible to see the interrelatedness
between all types of relativity and three different types of luxury: Temporal relativity is
mostly effective in transforming the inaccessible luxuries either to intermediate luxuries or
to accessible luxuries; regional and situational
relativities might be effective in transforming
from a lower level to higher level; and, economic relativity is mostly related to social developments and the economic power of individuals. A necessity for rich people might be
a luxury for poor people. This is helpful in
signifying the sharp distinctions between different social classes. Situational relativity,
different from the others, depends on the current situations people are in, and might involve the conversion of a simple item to a
luxury or vice versa. In cultural relativity, the
relativeness is partial because some industries
like the automobile or fashion industry are exempt from its effect, and the perceptions in
many countries are independent of each other
EMPIRICAL INVESTIGATION OF
LUXURY PERCEPTIONS
Methodology
In order to explore the meaning of luxury
for people, we conducted in-depth interviews.
This type of face-to-face interview method is
27
common practice in the gathering of data, especially in the marketing discipline (Polsa,
2007). It is an effective way of exploring the
understanding of luxury from the consumers’
point of view.
When recruiting participants, we focused
on potential participants who had economic
freedom, and thus were more appropriate to
feed us with information of interest. Participants were personal contacts, and in addition
to these we recruited close friends and some
relatives because of easy accessibility. Consequently, the evidence obtained in this study
does not represent the perception of a specific
population, but it does support us in the category building process (Morrow, 2005).
Grasping the rationale of the multiple interview procedure, Polkinghorne (2005) recommended interviewing each informant twice.
The first interviews were made up of two
open-ended questions. After analysing the
responses, we asked them three more questions in the second interview to obtain a deeper insight into their experiences of luxury. We
sharply limited the number of questions to get
deeper into the meanings of the stories told
and experiences shared (Morrow, 2005). The
first two questions did not require such detailed answers; they merely tried to obtain an
understanding of luxury to each participant
and to come up with a few luxury products
they could recall during the process of the interview. The latter three questions were
adapted from a study taken as a reference for
qualitative interviewing (Granot, Russell, &
Brashear-Alejandro, 2013). We asked participants to discuss their luxury consumption, and
while asking this, we did not limit them to
structured responses to questions. We intended to elaborate their own comments and even
to reveal their lived experiences with the
products. As a subjective product category,
we chose smart phones in one of the questions
because smart phones are evaluated as a
commonly used product category in recent
years, which is common to both genders,
28
Table 2. Interrelatedness of Relativity Types with Different Luxury Concepts
Type of Relativity
Temporal Relativity
Inaccessible Luxury
Perception of inaccessibility
at
a
specific
time.
Technology and industry
determine this perception.
It is the highest point and
the initial point and the
direction starts from here.
Example: A private butler.
Regional Relativity
Local availability is very
scarce.
Local availability defines its
access
level.
Only elite class members
can reach it by paying large
amounts.
Example: Real houses made
of cement etc. are an inaccessible luxury for some
people living in shacks.
Economic Relativity
Prices are prohibitively high
and access is highly restricted. Only elite society
members can buy it.
Example: A camera costing
100 euro might be a luxury
for some people; however,
for most people it is quite a
normal purchase. There are
some people who do not
consider a camera worth of
2000 euro as a luxurious
item.
Cultural Relativity
Perception of luxury level
does not depend on culture.
Some industries, e.g. fashion and automobile, are
more culturally independent.
Example: Cigars and custom made shoes are seen as
luxury in all countries.
Intermediate Luxury
Change of perceptions in
the
course
of
time.
determine
changes.
Effect of structural changes
in society and demand
Direction of change is from
inaccessible to intermediate
luxury.
Example: Cars were an
inaccessible luxury for a
few decades after they were
invented. But no longer are
an inaccessible luxury in
any developed country.
Local availability is scarce.
access
level.
It can be reached by paying
a large amount of money.
It is afforded by the professional social classes and
considered
a
luxury.
Example: Italian White
Alba truffles (referred to as
White Diamond) are notoriously costly as they are
difficult to raise.
Access is restricted and
items are highly priced.
Members of newly enlarging professional class can
buy.
For members of elite/high
society, products might be
an amenity or necessity
rather than a luxury.
Example: Mercedes and
BMW are luxury car manufacturers. However they
have some specific models
like the 1 series or A series
for the professional social
class.
depends
on
culture.
Some specific sectors like
food sector are more culturally
dependent.
Some industries like fashion
and cars are more culturally
independent.
Example: champagne is an
intermediate
luxury/accessible luxury at most
times for an European, but
Accessible Luxury
Change of perceptions in
the course of past times.
determine
changes.
Structural changes in society and demand are effective.
Direction of change mostly
from intermediate to accessible
luxury.
Example: Mobile phones
have over time transitioned
from an inaccessible luxury
to intermediate luxury, and
then to accessible luxury,
and nowadays a necessity.
Local availability is sufficient.
access
level.
It can be reached by paying
a certain amount of money.
It is usually accessible by
middle class members.
Example: A holiday in the
sun is a luxury for some
people living in specific
countries. However, it is
something ordinary for
people living in
Mediterranean countries.
Access is easy and items are
affordable. Members of
middle class can buy.
For members of professional social class, this isn’t
considered as luxury but
considered as amenity or
necessity.
Example: Starbucks coffee
is luxury for some people
with low income. Because it
charges two times more
than an ordinary coffee
shop, so not everybody can
afford it.
depends
on
culture.
Some specific sectors like
the food sector are more
culturally
dependent.
Some industries like fashion
and cars are more culturally
independent.
Example: Prawns are a
luxury for most people in
Europe, but in some cultures, prawns aren’t con-
Urkmez and Wagner
Situational Relativity
Relativity is ever-changing
depending on people’s circumstances. Even an inaccessible luxury product
might be considered a
worthless item, or a necessary product might be seen
as an inaccessible luxury.
Ex: Owning a private jet is
inaccessible luxury in all
situations.
released by information technology companies. We searched for background information by asking about their usage of smart
phones. Then, we asked them: “Tell me
about a product you own that you would like
to talk about,” which is in accordance with the
study of Granot et al. (2013). This question is
likely to reveal prominent product categories
used by the participants, and thus it was hoped
to uncover experiences and interactions between the users and the products (Fournier &
Mick, 1999). Granot et al. (2013) explained
this as probing “their experiences with specific possessions and followed a phenomenological inquiry approach” (p. 35). In all the questions, the respondents chose the brands to talk
about by themselves without placing product
category restrictions on them.
Interviews varied from 50 to 70 minutes in
length; mostly, they were around 60 minutes.
The interviews were conducted online using
the Skype service, enabling a recording of the
interviews to be made, in addition to the transcript.
Sample
The interviewees belonged to the new
emerging class of upper middle class people
with the purchasing power to buy any items
they were interested in, and they represented
an educated part of society. Luxury is not only purchased by the affluent class, but this
it is undrinkable and has no
value for a Muslim.
Relativity is ever-changing,
sometimes depending on
the conditions people are in.
Depending on the situation,
even an inaccessible luxury
product might be considered a worthless item or a
necessary product might be
seen as an inaccessible luxury.
Ex: A sports car is a luxury
but useless in the desert.
29
sumed and have no high
commercial value.
Relativity is not continuously ever-changing depending
on the conditions people are
in.
Even an inaccessible luxury
product might be considered a worthless item or a
necessary product might be
seen as an inaccessible ın
some
cases.
Ex: Water is a necessity in
most cases; however, it may
be a luxury in some cases.
group of people includes a remarkable number
of potential customers for luxury companies.
To secure the maximum possible variation, the selected interviewees differed with
regard to age, educational background, professional life, and gender (Ritchie & Lewis,
2003). We conducted purposeful sampling
selecting highly educated persons with at least
a bachelor degree; however, a large number of
our informants had obtained a master’s degree
in Turkey. The number of informants is seven
(5 females and 2 males from Turkey). The
number was enough to reveal the understanding of luxury among emerging working people
in the upper middle class in Turkey, and the
decision about the number of interviewees
was in accordance with what Kvale (1996, p.
102) suggested is “a point of saturation” the
researcher reaches during the interview process.
We selected informants from Turkey because in the luxury industry, the importance of
developing markets has been increasing and
Turkey, with its economic success in the last
decade, was a good candidate for our review.
Unlike the model study by Granot et al.
(2013), we recruited both male and female
informants because we thought that it was essential to observe luxury consumers as a
whole. We cannot deny the influence of men
in making luxury purchases, especially in developing countries and in patriarchal countries. In these countries, although women
have been working and earning money, buy-
30
ing any luxury items is not a completely individualistic decision, especially over a certain
amount.
Quality and Trustworthiness
In qualitative research, there are paradigms closely related to the underpinnings of
this particular research discipline. Ponterotto
(2005) identified four different paradigms by
reviewing 49 qualitative studies published in
Journal of Counseling Psychology from 1989
to 2003 (p. 128–129). Guba and Lincoln
(1994) stated that criteria for trustworthiness
in post positivist qualitative studies are associated with “internal validity (isomorphism of
findings with reality), external validity (generalizability), reliability (in sense of stability),
and objectivity (distanced and neutral observer)” (p. 114). (see Table 3).
Table 3. Application of Quality Criteria
Quality
Criteria
Definition
Application in current study
Internal validity
“How we ensure rigor in the research process
and how we communicate to others that we
have done so.” (Gasson, 2004, p. 95)
Deriving generalizations from the findings
Provided checks of our participants and extended conversation (Geertz, 1983).
External validity
Reliability
Being unvarying in a research throughout a
research period, and in the researchers and
analysis methods used.
Trustworthiness
Trustworthiness is accomplished with authenticity criteria, which include fairness and different authenticities such as ontological, catalytic, educative, and tactical authenticity.
Researcher
flexivity
A further criteria dimension for presenting the
interrelation between a researcher’s background and evaluation of the world around
him/herself, including personal experiences
and his/her research processes (Morrow,
2005).
re-
Data Analysis
The authors conducted data analysis after
collecting the data. First, the data collected
was transcribed and then the content was coded by following a thematic analysis. Here the
main aim was to identify similar parts of the
text exemplifying the same descriptive and
theoretical ideas (Gibbs, 2007). The analysis
began with open coding technique which is a
way of creating codes by asking questions like
We accomplished this by using samples from
the middle and upper middle classes, all professionals and relatively well educated.
Interviews were first transcribed and then coded by the corresponding author, and then the
first author reviewed the interview transcripts
and peer discussions which helped to give a
final touch before using them for the article.
We applied the fairness criterion to different
constructs. In ontological authenticity, participants elaborate on their individual constructions to develop them to maturity; (Morrow,
2005, p. 252).
We have been trying to be reflexive in our
account by discussing false applications in
daily life of the concept of luxury, to come up
with effective managerial implications that
may be helpful for luxury firms.
Why? When? How? Thus, one is able to identify important parts of the text. From this
analysis, the authors had around 200 different
codes to use in the next step. Then, they
grouped the codes into categories. Some of
the categories were subsequently merged, interconnected, and refined by using the axial
coding method (Gibbs, 2007). After this, the
authors reached the final classified groups
which were in several categories. Table 4 depicts profiles of respondents aged between 26
Urkmez and Wagner
and 50 years. They have various backgrounds
and live different lives in accordance with
31
their family status.
Table 4. Respondents’ Profiles
Pseudonym
Gender
Age
Education
Marital Status
Occupation
Income Category*
Deniz
Ezel
Yesim
Kader
Female
Female
Female
Female
45
42
32
50
PhD
PhD
PhD
Master
Never Married
Divorced
Married
Married
Doctor
Teaching Staff
Researcher
Engineer
Fisun
Female
26
Bachelor
Married
Teacher (Currently not working)
40000–59999
20000–39999
40000–59999
100000
and
more
20000–39999
Osman
Özkan
Male
Male
37
42
Master
PhD
Married
Divorced
Engineer
Musician
60000–79999
60000–79999
*Income in Turkish Lira (annual). At the time of the study, 1 Turkish lira equalled roughly 0,50 US dollars.
RESULTS
In the first question, we asked participants
about which products are luxurious in their
understanding. It was interesting to see that
each participant came up with a different
product category except for two female participants who stated “jewellery” and one male
participant who stated “Rolex watches.” The
other answers varied and came from different
categories including fashion, automobiles,
yachts, and house furnishings. The second
question was a more general question asked
with the intention of getting participants to
reveal their perceptions and knowledge of
luxury. Another interesting point here is that
participants expressed their perceptions by
exemplifying different characteristics and
relativities of luxury.
All of the interviewees, without any exception, emphasized the characteristic of
price, which confirmed what we have already
indicated, that price is the most striking characteristic of luxury, and for most people the
first one to be uttered. This is also in accordance with previous researches (Heine, 2011).
Rarity and aesthetics followed price and signified a greater meaning for three of our informants. They stressed two different aspects of
products’ rarity: firstly, being produced in lim-
ited numbers, and secondly, being used by few
people. Three female interviewees explained
that aesthetics might be the precedent value,
especially for women. For example, one noted, “Even a car if spotless clean or if it shines,
it is luxury for me. Because it shows the car is
nice” (Fisun, personal communication, March
17, 2014).
It is interesting to see that, unlike the
model study by Granot et al. (2013), not all of
the interviewees stressed quality as a characteristic of luxury, explicitly; however, one of
them mentioned this as an interrelated characteristic with high price, while a few others referred to the high quality features of smart
phones. One participant stressed the characteristic of being extraordinary. She remarked:
Yesim: If a product has different features
more than conventional ones, then it is a
luxury. For instance, if an oven has radio
within it and if people pay more than for a
conventional product, then, it is a luxury…. For example, a vacuum cleaner because of the features it has is more than a
conventional vacuum cleaner, and if it is
sold for 3000 TL instead of 300 TL, this
is a luxury for sure (Yesim, personal
communication, March 17, 2014)
32
Classifications and Themes
Five main classification categories emerging from the interviews with both males and
females are summarized in Table 5. Each
classification is illustrated with quotations revealing both the luxury perceptions and consumption profiles of informants.
Table 5. Process Coding Categories
Classifications
Modern Life
Categories
Technology Awareness
Technology Addiction
Eminent Features
Technology and Information
Social Communication
Socializing
Connection to Outer World
Social Respectability
Colligation of Opposites
Genuine & Counterfeit
Economical & Expensive
Emotions and Feelings
Appraisal & Being Proud of
Attention & Care
Positive Moods
Comfort
Brand Love & Hate
Freedom
Safety
Conspicuousness
Brand Image
Customer Profile
Advertising
Modern Life
Answers to all the interview questions revealed that the consumption habits of our seven informants showed parallels. All of them
had smartphones, which is important for evaluating the technology adaptation of middle
class people, especially when we consider that
prices of smartphones are relatively high in
Turkey. Regardless of gender, people were
usually aware of newly released models of
smartphones and used the various features of
their phones for different purposes, ranging
from enjoying themselves to obtaining information, as the following quotation explains:
Kader: Even now I am talking with you
via my phone. With this, I have been able
to follow everything because I have my
phone with me all the time in my hand.
Previously I was checking my email by
switching my computer on, but now I
have my phone in my hand and I am in
such a position that I can follow everything at any time. I was using online
banking and, when I needed to make a
transfer, I had to find a computer to complete transactions. However, now I am
Urkmez and Wagner
able to do them all with my handheld. I
am using it as a camera and camcorder, I
am playing games, especially a very fantastic game, Scrabble, its Turkish version;
we have downloaded it with my friends
(Kader, personal communication, March
16, 2014)
Even in response to the next question, which
concerned talking about any product owned
regardless of product category, the participants mostly talked again about their technological tools; this time it was either tablet
computers or notebooks.
Social Communication
Social contacts have always been important in people’s lives. Although, in comparison to past decades, modern life has kept
people away from spending time with each
other, technology and social media have
emerged as with new ways of communicating
with friends. This theme can be summarized
under four subheadings: socializing, connection to outer world, bandwagon effect, and
being esteemed by others. All the participants
stressed the importance of accessing social
media from their smartphones and tablet computers: “Emails come to me instantly which is
a very nice thing. And it operates all chat programs without any problems and deceleration
at all. All kinds of messaging, skype, chat,
etc.” (Ozkan, March 17, 2014).
A few of the informants indicated that
they used their smartphones to answer questions of some people around who did not have
smart phones:
Fisun: Yes, everybody has but that does
not mean that I should have one too. For
example, I can reach urgent information
quickly. There are people around me that
do not have smart phones and I can give
some information to them. They ask me
to check some info on my phone. I check
what they have asked me. In addition,
there are websites I am following. When I
33
am out, waiting for a bus, I check websites and get informed about social media
and what is happening. Actually, I know
it is not so crucial; however, this is a really nice feeling. I follow social media to
know what is going and to hear from people (Fisun, personal communication,
March 17, 2014).
Colligation of Opposites
From the responses to the interviews, we
have seen that brand awareness of technological products was admirably high. However,
there are two prominent major brands of
smartphones: the Apple iPhone and Samsung.
It is interesting that the iPhone, which is actually a model name of the Apple brand, substitutes for the brand itself and is known among
consumers as the iPhone. However, it was
quite surprising to come across a replica
smartphone during one of our interviews. It
had been commonplace to see counterfeit
fashion products, but not a technology product. The interviewee explained his reasoning
as follows:
Ozkan: My reason for preferring counterfeits, but not the original because of their
low prices, especially in Turkey. There is
too much tax on the products and even
though you bring it in from abroad, the
state still demands extra tax, 150 TL just
to allow the phone be used in Turkey. I
reject paying this kind of silly, unmerited
tax. Maybe, it is not exactly the same, but
it is 80% the same. I do not care for fashion but, for example, instead of buying a
Lacoste t-shirt counterfeit at 30 TL, I can
buy an original by paying 150 TL. However, if the original is 650 TL then there is
no other choice but to buy the counterfeit
one. In my opinion, the big price difference between the counterfeit and the original leads people to buy counterfeit
ones…I do not care about this functionality in a brand, so there is no need for me to
34
insist on buying Gucci or any other brand.
However, I do this especially in electronics because you cannot find similar features on a regular phone. That's why I buy
counterfeit electronics (Ozkan, personal
communication, March 17, 2014).
Almost all the participants introduced themselves as individuals who preferred not to buy
luxury goods, but actually, most of them did.
They usually talked about their budgets being
tight and not being capable of buying luxuries
for financial reasons. They justified purchasing the mentioned goods by explaining that
they were not luxury products but necessary
ones, indispensable parts of daily life.
Emotions and Feelings
Praise for the products was one of the
dominant characteristics among the responses
of the participants. People were usually inclined to praise their own products or they explicitly showed pride in their products. Even
though people sometimes regretted their shopping, human psychology is inclined to establish a kind of mechanism to consolidate the
regret by coming up with reasoning or justification to show that it was not a bad idea.
Moreover, all kinds of luxury items that people own make owners somehow happy, or in
other words, give rise to a positive mood.
Kader: I currently drive an Opel Corsa. It
is diesel and I am very pleased with its
consumption. It is very economical car. It
is 2010 model. I bought it brand new. My
previous car was also a Corsa, however it
was a 1999 model and I bought it second
hand. It had been old enough. It was not
diesel. Thus, fuel consumption was higher
16, 2014).
Schmitt (1999, p. 58) stated that “while
customers may frequently engage in rational
choice, they are just as frequently driven by
emotions because of consumption experiences.” It is also possible to observe a kind of
emotional tie between the product and the person such as:
This is my first brand new car. So far, I
have always used second-hand cars.
That's why one has somehow a more
emotional tie with it. For example, I was
doing such a thing, but of course not anymore, because I have been using it for
quite a while. I was seeing it as a daughter
and I was satisfying my motherhood feelings with it, as my own daughter is already a young adult and not as close as
she used to be. I was saying greetings to
my car each morning and talking with it.
However, I am not doing this anymore
16, 2014).
In addition, a few informants talked about
feeling of being safe, especially when these
were their owned car or dreamed car. They
clarified this feeling as follows:
Yesim: A Mercedes car is also nice.
When you buy Mercedes I am sure that
you will not think how much you will
spend 5 years later for repair costs, also if
I crash the car whether I will be alive or
not. Probably Mercedes is the only car
brand you can be sure about its safety.
People in Turkey are high income if they
use Mercedes cars. Nevertheless, this is
not the case for other countries. In Germany, all types of people can use such a
car (Yesim, personal coomunication,
March 17, 2014).
Conspicuousness
The quotation above might be an example
of brand image. Some brands have established images that differ from culture to culture. In this example, the informant sees the
Mercedes as a very strong and highly safe.
Another female participant explained her luxury product by giving the example of Audi
cars:
Urkmez and Wagner
Ezel: For example Audi cars are a luxury
for me. Audi, in fact, for me is a symbol
of richness. Especially in Turkey, not
everyone can own this brand. . . . The
people using it are in general rich people
living in Turkey, businesspersons or
high-income people use Audi cars and
SUVs. Especially, the colour black is another luxury symbol for me (Ezel, personal communication, March 17, 2014).
Another male interviewee supported the idea
by saying:
Osman: Luxury is Grand Cherokee Jeep
for me. Why? Because it consumes 14 litres per 100 km. It has a 3000 engine and
its tax, full insurance and petrol consumption is quite high…I have a close friend
using a Grand Cherokee but his father has
a factory. Doctors or other high-income
level people use this type of car with high
expenses… If you need to show you off
then this type of car is the one for you.
For example, if you go to construction
sites, there are always luxury cars parking
there during the day because this is a
strategy for companies, because whoever
goes there to visit that construction site,
these luxury cars make an impression on
people (Osman, personal communication,
March 18, 2014).
Another informant stressed the characteristic
peculiarity of Turkey with its profile of consumers using high technology products:
Here all Turkish people regardless of age,
income level etc. use the latest versions of
products and technology. For example,
someone just selling Turkish bagels (I
mean someone with a low-income level)
has a latest model and pricey products,
such as phones let's say. You know when
Blackberries were first released in the
market, they have been made especially
for businesspersons, for the purpose of
business solving devices, but in Turkey,
35
even low income guys like bagel selling
guys were using this phone (Ozhan, personal communication, March 17, 2014).
DISCUSSION AND CONCLUSIONS
Modern life has changed many luxuryrelated concepts, and technology adoption is
one of these. The consumer research folklore
claims males are more interested in technological gadgets and cars. However, the responses
from the interviews do not confirm this traditional view. Our question inviting general
views about any product they owned gave rise
to surprising responses because, contrary to
stereotypical expectations that women are
supposed to talk about either fashion or beauty
items, they preferred either their technology
items or their cars as topics to have a conversation about.
Furthermore, the crucial point to take into
consideration is necessity and luxury differentiation. For working class people, technology
and related items have been indispensable so
everybody owns either smart phone or tablet
PC. Although people consider themselves not
as someone purchasing luxury products, they
actually do so, and they justify their purchases
by hiding behind the reason of it being a necessity of contemporary life.
Technology adoption has been so widespread that people say that their smartphones
or tablet PCs are devices to do everything on
from morning to night. Moreover, the informants usually considered their inner state as being happy or in another positive mood. They
could not imagine themselves without their
smart phones, which might be a reason for
technology addiction.
The interviewees expressed the view that
sometimes their friends asked for information
from them, and they checked and supplied
them with the information. This kind of action might create esteem among other members. All informants had smartphones, and it is
interesting to see that only two brands existed
36
among the various answers: iPhone and Samsung. Furthermore, the responses about the
brands they had been using revealed that there
is a rivalry between these two brands: Brand
love and brand hate are two opposite but at the
same time close emotions.
While some products are a necessity for
some people who have a higher income compared to others, it might not be the case for all
people. This shows us the relativity of the
concept of luxury. Luxury brands usually
have a brand image that people associate with
quality and with being expensive. Besides the
brands, the owners or people purchasing them
are associated with wealth. It was interesting
to find that one of the informants saw Audi
cars as a symbol of richness and the colour
black as another additional luxury characteristic.
Managerial Implications
Modern life has changed the lifestyle of
people, so people are looking forward to hav-
ing increasing levels of comfort each day.
The products that promote that idea of comfort
and make life easier for people have more
chance of being in higher demand. The items
that were used by people more often, for example, daily or a few times a week, were in
higher demand than items used or worn only
on special occasions. Consequently, marketing strategies might need to be changed.
For rarely used items such as jewellery,
emotions dominate the perception. Just like
the successful marketing slogan of “A Diamond Is Forever” by DeBeers, successful slogans emphasize the heirloom characteristic of
jewellery. Middle aged and elderly people are
encouraged to buy new jewellery by the idea
of handing it on to the next generation.
The advantages of technology-related or
comfort-related items make selling easier; it
might be possible to add further elements of
luxury to these items thus combine some luxury with comfort and technology. This might
initiate a new stream of marketing.
Figure 2. Product Positioning of Luxury Goods by Interviewees
Product Positioning
Economic
Relativity
Luxury Level
Products
Inaccessible
Yacht
High Jewelry
High Segment Cars
Situational
Relativity
Accessible
Cultural
Relativity
Temporal
Relativity
Necessity
Low
Fashion
Home furnishing
Low Segment Cars
Technology Items
(Smart Phones, Tablet PCs, Ultrabooks, Notebooks)
Technological
Relativity
Because the price difference between authentic and counterfeit products is vast, people
are directed to buy counterfeit items. Hence,
additional purchasing options and price differentiation might support the vendors in clarifying differences between inaccessible luxury
Urkmez and Wagner
and accessible luxury. Thus, companies spespecializing in luxury goods might gain some
of the purchasers of counterfeits. Diversifying
payment options such as equal instalments
help more people acquire the purchasing
power to buy jewellery or similar products.
Research Implications
Emotions and experiential purchases turn
us to drive luxury purchase decisions.
Emotions drive the consumer towards broader
shopping adventures.
Although people
sometimes regret their shopping, they
compensate for their regret by creating an
excuse for their behaviour, or by praising the
product they have bought. This kind of
approach might help increase happiness. For
future research, it might be wise to investigate
emotions enabling an increase in positive
moods.
The concept of luxury plays an important
role in today’s product positioning, and luxury
is something aspired to. Almost all marketers
aim to take advantage of luxury-related
attributes by using terms such as “premium,”
“deluxe,” or “high class.” They aim to meet
the consumers’ desire to have a kind of luxury
in their lives or have a luxury product among
their possessions. However, we are facing
different usages of the term “luxury,” which
reduces the efficiency of the marketing
communications. This article contributes to
the conceptual clarification of the concept of
luxury.
Counterfeit items are common especially
in developing countries, and this causes an
extensive use of such products. A further
study might reveal the rate of preference for
such counterfeit products and the differences
in moods and behaviours of consumers.
Here in current study, we have proposed a
new relativity concept besides the existing
five different relativities:
technological
relativity. Due to what modern life offers us,
technology has been an inevitable concept for
37
most of us, and for anyone living in an
“enhanced part of the world” technology has a
core interpretation by means of sense making
in our life.
In line with this, modern
understanding of luxury is defined by
technological knowledge, use of technology,
and the emotions related to adoption of new
technologies. However, this concept is not
decisive for considering something as luxury
just by itself because like the other five
relativity concepts. Contemporary luxury
research lacks links to the research steam of
technology
adaption
and
UTAUT2
(Venkatesh, Thong, & Xu, 2012). Following
our results, this is likely to be a promising
venue for further research.
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Push and Pull Effects in International Retailing
Dalia Rachman-Moore
Michael Etgar
ABSTRACT . The purpose of the study is to evaluate the extent to which the Push and Pull model of
international marketing can explain retail globalization. A cross sectional analysis of international
sales of 161 large scale international retailers was conducted. The data was drawn from the Planet
Retail surveys about large-scale international retailers. Analyses were performed separately for
grocery and non-grocery retailers. We used a regression model to examine the impact of push and
pull variables upon international sales of these retailers. The study emphasizes the difference in the
relative importance of the push and pull variables between grocery and non-grocery retailers
regarding their international expansion. The findings indicate that push variables are relatively more
important in explaining international expansion of grocery retailing formats while pull variables were
found to be more important for non-grocery retailers. These results may help managers to decide
which factors to consider when contemplating international expansion.
KEYWORDS. Push-Pull Model, market-share, grocery and non-grocery formats, international
retailers, global competitive index
INTRODUCTION
This study measures the extent to which
the Push and Pull Model of international
marketing can explain global retail growth. It
is well-accepted that venturing into foreign
markets is a highly expensive effort that is
both
time-consuming
and
resourceconsuming.
It thus requires a major
commitment of financial, managerial, and
strategic resources (Alexander, 1997; Brown
& Burt, 1992; Dawson, 1994; Dawson &
Mukoyama, 2003; Goldman, 2001; Moore &
Fernie, 2004; Salmon & Tordjman, 1989;
Vida & Fairhurst, 1998). The high risk factor
may be deduced from repeated failures of
large and medium-sized retailers attempting to
penetrate various markets around the globe
and from the mounting evidence of
international retailers withdrawing from
foreign markets after several years of
operation (Burt, 1991b; Burt, Dawson, &
Sparks, 2003; Burt, Mallahi, Jackson, &
Sparks, 2002; Dupuis & Fournioux, 2006;
Knee, 1993; Moore & Fernie, 2004; Palmer,
2004; Treadgold, 1990; Wrigley & Currah,
2003).
One major factor contributing to this risk
is exposure to local customs and cultures,
especially those that impinge on consumer
cultures with respect to purchasing, storing,
and consumption of diverse goods and
services (Cavusgil, 1982; Johanson & Vahlne,
Dalia Rachman-Moore, Ph.D. is a researcher in management at the College of Management, Academic Studies (COMAS), School of Business Administration, Israel; Michael Etgar, Ph.D. is a researcher professor in marketing at the Center of Academic Studies, School of Business Administration, Israel.
Address correspondence to Dr. Dalia Rachman-Moore, School of Business Administration, College
of Management Academic Studies (COMAS), P.O. Box 25073, Rishon Lezion, Israel, 75190, E-mail:
drmor@colman.ac.il
41
42
1977; Miles & Snow, 2001; WiedersheimPaul, Olson, & Welch, 1978).
In spite of associated expenditures and
risks, the number of retailers expanding
abroad grows steadily as does the number of
countries in which international retailers operate. Similarly, diversity is also found in retailers’ countries of origin, spanning not only
the traditional West European and North
American origins, but also the Far East, Australia, South America and Africa (Deloitte
Consulting, 2007). While a growing trend,
international retail expansion bears substantial
economic, social, and political significance,
rendering the underlying motivation for this
expansion to be the focus of a substantial
research effort (Alexander, 1990; Gielens &
Dekimpe, 2001, 2007; Hutchinson, Alexander,
Quinn, & Doherty, 2007; Williams, 1992).
Notwithstanding, Dawson's (1994) report of
nearly 20 years ago is still pertinent: Largescale, cross-sectional empirical research is still
lacking in the field. The current study aims to
fill this lacuna by utilizing the data from a
large number of retailers.
THEORETICAL BACKGROUND
Studies investigating retailers’ motivations
for internationalization tend to focus on two
types of factors: intra-firm and extra-firm
factors. The former include factors internal to
the retailing organization such as knowledge
accumulated in the retail firm (Currah &
Wrigley, 2004; Sinha, 2005), the quality of the
management of the firm (Vida, 2000; Vida,
Reardon, & Fairhurst, 2000), management's
networking skills (Currah & Wrigley, 2004),
prior foreign experience of managers
(Kuemmerle, 2002), age (Erkko, Sapienza, &
Almeida, 2000), the quality of the retailers'
strategic choices (Tacconelli & Wrigley,
2009), or organizational cultures within the
firms (Fey & Denison, 2003; Sinha, 2005;
Vida et al., 2000). Recent studies (e.g.,
Wrigley & Currah, 2006) also exhibit an
interest in the ability of international retailers
to utilize and apply e-technology for retail
management and its impact on international
operations.
Another body of research explores
potential linkages between the environment of
retail organizations and their operations in
international markets. For example, Gielens
and Dekimpe (2007) point out the focal role of
competitors’ behavior. One theory that links
retail expansion to the characteristics of the
retailing environments is the Push and Pull
Model, originally developed for the study of
international expansion of goods and brands
and recently expanded for services (Javalgi,
Griffith, & White, 2003). It was also adapted
to cover international retailing expansion as
well (Alexander, 1997; Gielens & Dekimpe,
2001; Moore, Fernie, & Burt, 2000; Salmon &
Tordjman, 1989; Treadgold, 1988; Welsh,
Alon, & Falbe, 2006). The push factor relates
to variables that block domestic expansion of
retailers and push them to seek expansion in
non-domestic markets.
As developed
countries are characterized by increasingly
saturated domestic markets coupled with slow
growth rates, increased competition, and
relatively oppressive regulation (Kalish,
2005), we may postulate that retailers in such
countries will be driven to expand overseas.
Indeed, Alexander noted the importance of
domestic market saturation in “pushing”
retailers to foreign markets nearly two decades
ago (Ackerhurst & Alexander, 1995;
Alexander, 1995). McGoldrick and Ho (1992)
drew similar conclusions for Japanese
department stores. Recently, Liu and Li
(2002) concluded in their study of Chinese
giant consumer goods firms (though not
retailers) that saturation of its domestic market
led Haier to venture abroad.
Similarly,
Alexander and Quinn (2002) noted that many
British retailers ventured abroad due to
saturation in their domestic market. Vida et
al. (2000) found similar results for American
retailers, while Welsh et al. (2006) noted that
Rachman-Moore and Etgar
international franchise chains ventured into
emerging markets only after saturation in their
domestic markets. Saturation in domestic
markets is reflected by high market shares of
the relevant retailers (Burt, 1991a; Liu & Li,
2002).
The resource-based view (RBV) school
of thought leads us to a similar conclusion:
Retailers enjoy superior resource endowment
and capabilities that enable them to succeed in
non-domestic markets (Amit & Schoemaker,
1993; Conner & Prahalad, 1996; Hoopes,
Madsen, & Walker, 2003).
Consequently, the following hypothesis was
set regarding the push factor:
H1a. The higher the level of a
retailer's market saturation in domestic
markets, the higher the extent of its
retailers' involvement in foreign
markets.
Porter (1998b) proposes that extensive
domestic competition will also force retailers
to venture into international markets due to
limited prospects of domestic market shares
and profits. He claims that extensive domestic
competition forces relevant retailers to be
innovative and streamlined, traits that
facilitate their competition in international
markets.
This result was confirmed for
Korean and Japanese tangible goods firms
(Amsden & Singh, 1994; Nickell, 1996) as
well as German firms (Lenway & Murtha,
2004).
Consequently, we postulate the
following hypothesis,
H1b. The higher the extent of
competitiveness in their domestic
markets, the higher the extent of
retailers’ involvement in foreign
markets.
The pull factor aspect of this theory
stipulates that retailers seek international
expansion irrespective of the expansion
potential in their domestic markets
43
(Alexander, 1997; Kacker, 1988; Quinn,
1999), thus shifting the focus of attention to
the attractiveness of the foreign markets to
which the firms are drawn. The importance of
the pull factors was established for both
British retailers (Quinn, 1999) and American
retailers (Vida et al., 2000).
This attractiveness of the foreign market
is determined by two major components, one
with positive and the other with negative
effects.
To begin with the latter, the
attractiveness of foreign markets may be
severely reduced by blocking variables –
impediments a retailer may face in foreign
markets (Baek, 2005; Maharajh & Heitmeryer,
2005).
Traditional impediments such as
physical distance from a target market are
becoming less influential as technological
advancements and globalization increase
(Callaway, 2008; Freund & Weinhold, 2004;
Kouvelis & Niederhoff, 2007). A major
blocking factor recently growing in
importance in retail research is the extent of
local resistance displayed by retailers already
operating in the foreign market which we view
as the competitive intensity characterizing the
foreign market or country. For example,
loyalty of local consumers to their domestic
retailers was found to exist in many countries
albeit at varying degrees across different
cultures (Straughan & Albers-Miller, 2001);
local consumer loyalty was reported to affect
the entry strategy of both Toys R Us and
Carrefour in Japan (Baek, 2005); resistance of
traditional shopkeepers impacted the entry of
supermarkets in India (Franz, 2010);
international “category killers” prompted
Israeli retailers to adopt various defense
strategies (Etgar, 1996) while the entrance of
Wal-Mart into the Brazilian market stirred
similar responses from local retailers (da
Rocha & Dib, 2002). Similarly, local
resistance in foreign markets was reported to
have affected joint venture decisions as well
as retail strategies of international retailers
entering the Chinese market (Wang & Chan,
44
2007). Following such evidence as well as
Porter's Diamond Model (Porter, 1991,
1998a), we stipulate that the ability of local
firms to defend themselves against new
international entrants in their markets is
directly linked to the level of competitiveness
existing in each particular market. Higher
competitive capacity in any foreign market
allows local firms in that market to better
defend their local market share. We thus
speculate that international retailers will prefer
to operate in foreign markets characterized by
lower defensive potential as exhibited by local
competitive capacity.
Consequently, the
following hypothesis was set regarding this
facet of the pull factor:
H2a. The higher the extent of
competitiveness
in
international
markets, the lower the extent of
retailers' involvement in these markets.
On the positive aspect of the pull factor,
retailers are attracted to foreign markets
because of higher economic growth, growing
populations, increasing consumer spending
and also because these markets are
characterized by relatively less competition
(Knight & Cavusgil, 2004; Papadopoulos,
Hongbin, & Thomas, 2002). Evans, Bridson,
Medway, and Byrom (2008) indicated in a
pilot study of 12 retailers that these features of
a foreign market are reflected in the construct
of potential demand facing international
retailers entering such a market, and therefore,
the extent of potential demand is expected to
positively affect the attractiveness of a foreign
market.
Consequently, we expect that
retailers who face larger potential demand
abroad are more prone to be active in foreign
markets. Thus, the following hypothesis was
set regarding this facet of the pull factor:
H2b.
The larger the potential
demand facing international retailers in
international markets, the greater the
extent of their involvement in these
markets.
A review of current literature shows that
the question whether it is the push or the pull
factor that is more pertinent to retailers’
international involvement is essentially
unresolved. Thus, another purpose of this
study is to shed more light on this issue, using
actual sales and non-response data from a
large database. Lack of theoretical basis by
which to decide which factors have greater
impact on retailers’ decisions requires positing
the following research question:
RQ1. Which factors, push or pull,
contribute
more
to
retailers'
involvement in international markets?
The authors addressed the above issues by
conducting a large-scale empirical research
involving a large population of varied
international retailers.
RESEARCH METHODOLOGY
The research issues presented above were
examined by evaluating the effects of push
and pull variables upon sale volumes of
international retailers. Retailers’ volume of
sales in foreign markets was used to measure
the extent of their international involvement.
This variable is easy to measure, relatively
accessible, and used in many retailing studies
(e.g., Bühner, 1987; Vida et al., 2000). It is
therefore a good measure of retailing
performance.
These relationships between the push and pull
factors and retailer's international involvement
were separately tested with hierarchical
regressions for both grocery and non-grocery
retailing formats.
These two retailing
categories are characterized by inherent
differences with respect to operation (facilities
and logistics) and marketing requirements,
corresponding implications for capital invest-
ment intensity and regulatory supervision
(e.g., Fernie, 1995). The two groups also differ in consumer shopping and purchasing patterns such as frequency and quantity of purchase per store visit, importance of emotional
motivations, brand loyalty, and other factors
(Degeratu, Rangaswamy, & Wu, 2000;
Popkowski, Sinha, & Timmermans, 2000;
Turley & Milliman, 2000). Correspondingly,
the dataset used herein also distinguished between these two retail formats.
A cross-sectional analysis was conducted
using the annual international sales data as
well as descriptive data (market share,
domestic sales, non-domestic sales, potential
demand, retail format) of a large sample of the
largest international retail chains from Planet
Retail (2007). The use of cross-sectional
analysis is well recorded in research literature
(see, for example, Gripsrud & Benito, 2005).
It allows researchers to analyze specific
relationships while neutralizing the potential
effects of other exogenous factors that change
over time and thus may affect the
development of retail sales over time. Such
factors may include global economic changes,
the increased pace of globalization, the
dismantling of trade barriers around the world,
improved technologies for information
dissemination, and changes in the costs of
global transportation. To eliminate variance
resulting from the firm's size regarding
product category or market diversity, only
large-scale retailers were studied in this
research.
The order of independent variables in our
analyses
reflects
the
chronological
development of international retailers. As all
studied retailers started their operations in
their domestic markets and expanded abroad,
we first introduced into the regression
variables relating to domestic markets
(representing the push factor) followed by
variables relating to foreign markets
(representing the pull factor).
45
Data
Data for this study were obtained from the
2007 annual “Planet Retail Data” report
(Planet Retail, 2007) describing some 250 of
the largest retail chains from around the globe
and representing diverse sectors, countries of
origin, and foreign markets. This allowed us
to analyze the international retail scene before
the subsequent global recession and
corresponding activities of retailers. This
research studied only the international
retailers among them, who established offshore branches, operated local affiliates, or set
up joint ventures with local entrepreneurs in
non-domestic markets.
The Planet Retail sales data is presented in
US dollars, based on official bank rates for
more than 170 international currencies and for
all years dating back to 1997. All rates are
calculated as full-year averages. The database
consists of the world’s leading grocery, drug,
petrol, and general merchandise retailers
involved in the FMCG (fast moving consumer
goods) categories. In addition, it profiles
leading retailers in HoReCa (hotels,
restaurants,
catering),
entertainment,
electronics, and office supplies sectors. Data
is collected through direct interviews with
executives of the relevant firms, from publicly
published documents such as press conference
reports, websites, annual reports, and official
press releases. Information is also obtained
from printed and online publications of
industry sectors and financial specialists, as
well as through co-operation with retail
analysts around the globe.
Data are recorded separately for grocery
and non-grocery retailing formats. The former
include a wide range of grocery products such
as fresh fruits and vegetables, chilled or frozen
meats and produce, alcoholic and nonalcoholic beverages, tobacco, pet care, and
household care products. Non-grocery retailing formats span product groups such as
health & beauty, clothing, footwear & jewelry,
46
DIY & furniture, sports & leisure, automotive
products, foodservice, consumer electronics,
entertainment, office supplies, and other nongrocery
products.
Many
retailing
organizations operate both grocery retailing
chains such as supermarkets or hypermarkets
alongside chains specializing in non-grocery
items.
MEASURES USED IN THE STUDY
Dependent Variables
Grocery and non-grocery international
retail sales in 2007 are the two dependent
variables used in this study. Due to their
right-skewed distribution, we used as the
dependent variable the natural log of retail
sales (in millions of US dollars) rather than
raw retail sales data.
This logarithmic
transformation generates a bell shaped
distribution curve exhibiting more of a normal
approximation (Neter, Wasserman, &
Whitmore, 1993)
Independent Variables
Push factor. Two constructs represent the
push factor. Within each group of retailers
(those with grocery and those with nongrocery retailing formats), the study
monitored for each international retailer the
levels of both its domestic market saturation
(DMS) and the extent of its domestic market
competition (EDMC). The DMS construct
was measured by two variables based on data
from Planet Retail (2007):
Domestic grocery sales of international
retailers (in millions of US dollars). A similar
measure monitored domestic non-grocery
sales of international retailers.
The market share of each international
retailer in its domestic grocery or non-grocery
market. This variable was calculated as
follows. The international retailers in each
group (grocery and non-grocery) were ranked
according to their domestic market shares.
Low market share retailers are those found in
the lowest quartile; medium market share
retailers are those found in the two middle
quartiles; high market share retailers are those
found in the highest quartile. Low and
medium market shares levels were coded as
dummy variables:
1 if present and 0
otherwise.
The EDMC construct is represented by the
Global Competitive Index (GCI) for the
domestic country of each international retailer
published by the World Economic Forum,
(2007).
GCI measures the degree of
competitiveness of each country in global
markets presented as a weighted average of
several components, including the size of the
foreign market; the nature of the institutional
settings in which businesses operate; the
quality of the infrastructure in the same
country; the macro economic environment;
health and education; the degree of
competition in the foreign market with respect
to goods, labor, and finance; technological
capabilities of the foreign market; and so on.
Pull factor. Representing the extent to
which foreign markets attract a given retailer,
the pull factor has two aspects:
Potential demand (or market size)
available to retailers in these markets. In a
specific foreign market, the potential demand
in the short run is the sales of comparable
products and brands of competing retailers in
the relevant category. To compute potential
demand for each international retailer, a twostep calculation was performed. First, for
each international retailer, annual 2007 sales
of all retailers in the relevant category were
calculated for each foreign country. The data
were taken from the 2007 Planet Retail
survey.
At the second stage, for each
international retailer, these sales were added
across all its foreign markets.
47
Table 1. Descriptive Statistics of the Largest International Retailers - Grocery and Non-grocery
Retailing Formats (2007)
Non-grocery retailingb
Grocery retailinga
(n=156)
(n=104)
Variables
S.D.
Mean
S.D.
Mean
66,339.580
63,8027.347
2,976.273
5,650.068
International sales
(millions US$)
2.599
1.185
2.804
0.886
Log international
sales (millions US$)
8,758.709
15,783.103
6,714.989
8,865.000
Domestic sales
(millions US$)
0.250
0.435
0.256
0.439
Market share low(1)
0.481
0.502
0.494
0.501
Market share
medium(1)
5.281
0.404
5.350
0.384
GCI domestic
c
country
4.630
0.562
4.690
0.523
CGCId
1,007,553.920
1,161,516.987
2,991,574.559 3,532,845.831
Potential demand
e
(millions US$)
a
b
c
d
e
Grocery format includes a wide range of grocery products such as fresh fruits and vegetables, chilled or frozen
meats and produce, alcoholic and non-alcoholic beverages, tobacco, pet care, and household care products.
Non-grocery format includes product groups such as health & beauty, clothing, footwear & jewelry, DIY &
furniture, sports & leisure, automotive products, foodservice, consumer electronics, entertainment, office supplies,
and other non-grocery products.
Global Competitive Index of country of origin.
Composite Global Competitive Index of foreign countries weighted by population size in each country for each
product category (grocery and non-grocery).
Potential demand (US$ millions) facing each international retailer represents the total sales (US$ millions) of all
retailers operating in each country in the specific category (grocery and non-grocery) aggregated across all
foreign markets of each international retailer
Competitive intensity of foreign countries
was also measured using the GCI. Because
international retailers operate in several
foreign markets, for each such retailer we
constructed a Composite Global Competitive
Index (CGCI) representing a weighted GCI
average of all foreign countries of that retailer
and weighted by the foreign country’s
population size.
RESULTS
Of the 250 largest retailers in our 2007
database, 161 (64.4%) operate internationally,
while many operate in both grocery and non-
grocery product categories. Table 1 shows
descriptive statistics of these largest
international retailers in each retailing format
(104 retailers with grocery formats and 156
retailers with non-grocery formats). In each
category, the monitored sales data belong
exclusively to either the grocery or the nongrocery sales category. Such a division
allowed us to perform the analysis separately
for sales of each category in the international
markets. Tables 2 and 3 correspondingly
present the correlations among the
independent variables for retailers with
grocery formats and retailers with non-grocery
formats. These correlations range from low (-
48
0.048 and 0.017 respectively) to medium (0.556 and -0.571 respectively), indicating that
for both groups of retailers the degree of colinearity among these variables ranges from
low to medium. Tables 4 and 5 respectively
present the results of the hierarchical
regressions for international retailers in each
product category. For both groups, we first
introduced into the regression the push
variables (DMS followed EDMC) after which
we introduced the pull variables (competitive
intensity of foreign countries followed by
potential demand).
For the first regression, with respect to the
impact of DMS variables over retailers'
foreign grocery sales, the two DMS variables
combined (domestic sales and market share)
indeed make a significant impact with a
cumulative overall explanatory power of the
regression (its R2) of 0.342 (F=17.298,
df=3,100, p=0.000).
The corresponding
results for non-grocery format retailers
(Regression 1, Table 5) show that the two
DMS variables impact foreign non-grocery
sales as well (F=5.631, df=3,152, p<0.01).
However, they hold much lower contributive
power with a cumulative R2 of 0.100.
The results for retailers with grocery
formats (Regression 1, Table 4) show that the
partial coefficient of the domestic sales
variable
is
significant
and
positive
(b=2.390·10-5, p=0.000), remaining positive
and significant at p<0.01 in all the stages of
the hierarchal regression analysis. These
results indicate that retailers with larger
grocery sales in their domestic markets are
likely to have higher sales of grocery products
in foreign markets (when controlling for the
other variables in the regression). The partial
regressions of the two dummy variables, low
and medium market shares, are negative and
significant (b=-1.277, p=0.000 and b=-0.493,
p<0.05, respectively).
These coefficients
remain negative and significant (p=0.000) in
all the stages of the hierarchical regression.
These results indicate that once the absolute
sales volume variable is controlled, the market
share variable is indeed important. In other
words, retailers with high market shares of
grocery sales in their domestic markets are
likely to have greater grocery sales in foreign
markets than retailers with low market shares
in their domestic grocery market. The analysis
for the retailers with non-grocery formats
(Regression 1, Table 5) shows different
results. The partial coefficient of the domestic
non-grocery sales variable for these retailers is
positive but not significant at p<0.05,
remaining insignificant throughout all the
stages of the hierarchical regression. The
analysis of the market share variable shows
that only the partial coefficient of the low
market share dummy variable is negative and
significant (b=-0.526, p=0<0.01), remaining
negative and significant throughout all the
stages of the hierarchical regression. This
result indicates that retailers with high nongrocery market shares in their domestic
markets are also likely to have greater foreign
non-grocery sales than retailers with low
market shares.
Comparing the results for
the two groups of retailers shows that for both
groups the low market share dummy variable
exerts a similar effect: a negative and
significant impact on non-domestic sales. The
medium market share dummy variable, in
contrast, has a negative and significant effect
only for grocery retailers. This may indicate
that the market share variable has stronger
effect among retailers with grocery formats
than among retailers with non-grocery
formats. Similarly, the effect of the last
measure of local saturation, retailers' volume
of domestic sales, is also positive and
significant only for grocery retailing
category.These results support H1a for
grocery formats while only partially
supporting H1a for non-grocery formats.
Introduction of the variable representing
EDMC (i.e., CGI of international retailers’
country of origin) into the regressions shows a
differing impact on the two retailer groups.
49
Table 2. Grocery Retailinga of the largest International Retailers in 2007: Correlations Among
Log International Sales, Push and Pull Variables (n=104)
Correlations
Variables
Log
internationa
l sales
(millions
US$)
Domestic
sales
(millions
US$)
Market
share
low(1)
Market
share
medium(1)
GCI
country of
origin b
CGCIc
Potential
demand
(millions
US$)d
Log
internation
al sales
(millions
US$)
1.000
Domestic
sales
(millions
US$)
0.453***
1.000
-0.453***
-0.313**
Low
market
share (1)
Medium
market
share (1)
GCI of the
country of
origina
1.000
0.071
0.061
-0.556***
1.000
-0.088
0.111
0.368***
-0.213*
1.000
0.165†
0.245*
-0.221*
-0.109
0.431***
0.315**
-0.189†
0.315**
-0.048
0.124
CGCIb
1.000
0.164†
* p<0.05. **p<0.01. ***p=0.000. †p<0.1.
a
Grocery format includes a wide range of grocery products such as fresh fruits and vegetables, chilled or frozen
meats and produce, alcoholic and non-alcoholic beverages, tobacco, pet care, and household care products.
b
c
Composite Global Competitive Index of foreign countries with grocery formats weighted by population size in
each country.
d
Potential demand (US$ millions) for each retailer with grocery format representing the grocery retail sales
aggregated across all foreign markets of each retailer calculated as aggregated annual 2007 sales of all grocery
retailers for each foreign country across all foreign markets of each retailer.
50
Table 3. Non-grocerya Retailing of the Largest International Retailers 2007: Correlations Among
Log International Sales, Push and Pull Variables (n=156)
Correlations
Variables
Log international
sales (millions
US$)
Domestic sales
(millions US$)
Low market
share (1)
Medium Market
share (1)
GCI country of
origina
CGCIb
Potential demand
(millions US$)c
Log
internation
al sales
(millions
US$)
1.000
Domestic
sales
(millions
US$)
0.208**
1.000
-0.277***
-0.217**
0.148†
0.125†
0.170*
0.286***
0.022
0.558***
Low
market
share (1)
Medium
market
share (1)
GCI
country
of
origina
CGCIb
1.000
0.017
1.000
0.045
0.580***
0.2267**
*
0.036
1.000
0.143†
0.191*
-0.024
0.087
0.366**
*
0.212**
1.000
0.154†
* p<0.05. **p<0.01. ***p=0.000. †p<0.1.
a
Non-grocery format includes product groups such as health & beauty, clothing, footwear & jewelry, DIY &
furniture, sports & leisure, automotive products, foodservice, consumer electronics, entertainment, office
supplies, and other non-grocery products.
a
b
Composite Global Competitive Index of foreign countries with non-grocery formats weighted by population size
in each country.
c
Potential demand (US$ millions) for each retailer with non-grocery format representing the non-grocery retail
sales aggregated across all foreign markets of each retailer calculated as aggregated annual 2007 sales of all nongrocery retailers for each foreign country across all foreign markets of each retailer.
For retailers with grocery formats, this
variable contributes nothing at all to the R2
(Regression 2, Table 4), a result that remains
identical also in later stages of the hierarchical
regression. However, for retailers with nongrocery formats, this variable do indeed make
a contribution towards R2, adding 0.05 to it.
Its partial coefficient is positive (b=0.608,
p<0.01) and remains so also in later stages of
the regression. These results indicate that for
retailers with non-grocery formats, as
competition grows in their domestic countries,
they are more likely to expand overseas, thus
supporting H1b for non-grocery formats. H1b
was not supported for grocery formats.
A comparison of Regression 2 in Tables 4
and 5 shows that the push variables indeed
impact foreign sales in both groups of
retailers. The overall F of the push factor is
significant (F=12.845, df=1,99, p=0.000 and
F=6.646, df=4,151 p=0.000 for grocery and
non-grocery, respectively). Notwithstanding,
with a higher cumulative R2, push variables
have a greater impact upon international sales
of retailers with grocery formats than those
with non-grocery formats (0.342 and 0.150,
respectively). In depth analysis of the relative
importance of each push variable shows that
DMS contributes to the overall R2 for retailers
with grocery formats yet has no significant
effect in the non-grocery category. In contrast, EDMC has no effect in the grocery category while making a significant contribution
to the R2 in the non-grocery category.
Analysis of the effects of the pull variables
as reflected in the results of the third stage regression (Regression 3, Tables 4 and 5) shows
that the introduction of the competitive intensity of foreign countries indeed contributes to
the overall R2 of both retailer groups but unequally so. For retailers with grocery formats,
competitive intensity increases the R2 by
0.027 (significant at p<0.05) to the cumulative
R2 of 0.369 and the overall F of this regression
is significant (p=0.000). The partial regression coefficient of this variable is negative (0.390) and significant (p<0.05) indicating that
for these grocery retailers, local resistance (as
measured by the intensity of local competition) in the foreign countries adversely impacts retailers’ foreign sales. For retailers
with non-grocery formats (Regression 3, Table 5), the competitive intensity variable increases the R2 only marginally (by 0.003) and
is insignificant. The overall F of this regression is significant (p=0.000), and the corresponding cumulative R2 is 0.152. These results support H2a for grocery retailing formats
but not for non-grocery retailing. At the fourth
stage (Regression 4, Tables 4 and 5), the size
of the potential demand variable was added
into the two regressions. In both groups this
variable significantly increases the level of the
overall explanatory power of the regression
(R2) by 0.167 to 0.535 with a significant over-
51
all F of this regression (p=0.000) for grocery
(Regression 4, Table 4) and by 0.264 to 0.417
with a significant overall F of this regression
(p=0.000) for non-grocery categories (Regression 4, Table 5). In both groups, the partial
coefficients of the international potential demand are positive and significant (b=
4.514·10-7, p=0.000 and b=1.368·10-7,
p=0.000 for grocery and non-grocery, respectively). These results indicate that retailers
who encounter greater international potential
demand are likely to achieve higher foreign
sales. These results support H2b for both retailers with grocery formats and those with
non-grocery formats.
RQ1 is meant to assess the relative importance of both push and pull factors.
LeBreton, Hargis, Griepentrog, Oswald, and
Ployhart (2007) defined the relative importance as the contribution of each independent variable to the cumulative R2, considering
both its unique contribution and its contribution in the presence of other independent variables. The relative-importance analysis decomposes the cumulative R2 in the dependent
variable into the R2 that should be attributed to
each indpendent variable even when the independent variables are correlated. In such a
case, relative importance may be established
by use of dominance analysis (Azen &
Budescu, 2003) or relative weight analysis
(Johnson, 2000), two methods that yield very
similar results (Johnson, 2000; LeBreton et
al., 2007). We used the method of relative
weight analysis R WEIGHT SPSS Syntax
provided by Johnson (2001). The
results
show different importance levels of the push
and pull factors according to product category.
For retailers with grocery formats (Table 6),
the relative weight as percentage of the overall
explanatory power of the regression of the
push factor is 69% while the relative weight of
the pull factor is 31%. Theseresults indicate
that for grocery retailing the push factor is
more
important
in
predicting
52
Table 4. Grocery Retailing: Partial Regression Coefficients from Hierarchical Regression Analysis of the Log International Grocery Sales of the Largest International Retailers in 2007 (standard error in parentheses)
Regression 1
Regression 2
Regression 3 Regression 4
Variables
b
b
b
b
Push variables
Domestic Market Saturation (DMS)
Domestic sales
2.39·10-5***
2.379·10-5**
2.185·10-5**
1.565·105
(0.000)
(0.000)
(0.000)
**
(0.000)
Low market share -1.277***
-1.285***
-1.367***
-1.696***
(1)
(0.282)
(0.306)
(0.304)
(0.268)
Medium market
-0.493*
-0.494*
share (1)
(0.233)
(0.234)
Extent of Domestic Market Competition (EDMC)
0.018
GCI country of
(0.266)
origina
Pull variables
CGCIb
Potential demand
(millions US$)c
-0.584*
(0.234)
-0.673**
(0.203)
0.271
(0.290)
0.034
(0.253)
-0.390*
(0.190)
-0.453**
(0.164)
4.514·107
***
(0.000)
0.342
0.342
0.369
0.535
Cumulative R2
2
0.342
0.000
0.027
0.167
∆R
17.298***
0.004
4.217*
34.795***
F change
(3,100)
(1,99)
(1,98)
(1,97)
Df
17.298***
12.845***
11.453***
18.635***
Overall F
(3,100)
(4,99)
(5,98)
(6,103)
Df
* p<0.05. **p<0.01. ***p=0.000.
a
b
Composite Global Competitive Index of foreign countries with grocery formats weighted by
population size in each country.
c
Potential demand (millions US$) for each retailer with grocery format representing grocery
retail sales aggregated across all foreign markets of each retailer calculated as aggregated annual 2007 sales of all grocery retailers for each foreign country across all foreign markets of
each retailer.
53
Table 5. Non-grocery Retailing: Partial Regression Coefficients from Hierarchical Regression
Analysis of the Log International Non-grocery Sales of the Largest International Retailers in
2007 (Standard Error in Parentheses)
Variables
Regression 1
b
Regression 2
b
Push variables
Domestic Market Saturation (DMS)
5.976·10-6
Domestic sales
1.478·10-5†
(0.000)
(0.000)
Low market share (1)
-0.526**
-0.788***
(0.198)
(0.213)
Medium market share
-0.034
-0.154
(1)
(0.170)
(0.171)
Extent of Domestic Market Competition (EDMC)
GCI country of origina
0.608**
(0.205)
Pull variables
CGCIb
Potential demand (millions
US$)c
Regression 3
b
Regression 4
b
-5.513·10-6
(0.000)
-0.788***
(0.213)
-0.138
(0.173)
-1.604·10-6
(0.000)
-0.783***
(0.177)
-0.189
(0.144)
0.661**
(0.219)
0.484**
(0.183)
-0.099
(0.141)
-0.182
(0.118)
1.368·107
***
(0.000)
0.417
0.264
67.424***
(1,149)
17.728***
(6,149)
0.100
0.150
0.152
Cumulative R2
2
0.100
0.050
0.003
∆R
5.631**
8.821**
0.495
F change
(3,152)
(1,151)
(1,150)
Df
5.631**
6.646***
5.398***
Overall F
(3,152)
(4,151)
(5,150)
Df
* p<0.05. **p<0.01. ***p=0.000.
a
b
Composite Global Competitive Index of foreign countries with non-grocery formats weighted
by population size in each country.
c
Potential demand (millions US$) for each retailer with grocery non-format representing nongrocery sales aggregated across all foreign markets of each retailer calculated as aggregated
annual 2007 sales of all non-grocery retailers for each foreign country across all foreign markets of each retailer.
non-domestic sales than pull factor variables.
For non-grocery retailing (Table 6), the relative importance of the push and pull variables
is quite the opposite. Here the relative weight
as percentage of the overall explanatory power
of the regression of the push factor is 33%
while the relative weight of the pull factor is
67%. These results indicate that for non-
54
grocery retailing the pull factor is more imimportant than the push factor.
DISCUSSION AND CONCLUSIONS
This paper presents several important
results
for
students
of
the
retail
internationalization process.
First, the
presented research uses quantitative objective
data to test a major theory in retail
internationalization, namely the Push and Pull
Theory. The sample used in this study is
highly diverse, comprising a variety of largescale international retailers from different
countries of origin in Europe, North and South
America, Asia, and Africa. These retailers
operate distinct retail formats and are found in
dozens of different foreign markets in
developed, developing, and growing countries.
These characteristics suggest that the sample
is highly representative of the overall
population of large-scale international
retailers.
Table 6. The Relative Importance of Push and Pull Factors on the Log International Sales of the
Largest International Retailers in 2007 for Grocery and Non-grocery Retailing
Grocery
Non-Grocery
Relative Relative weight as
Relative Relative weight as
Weight
percentage of R2
Weight
percentage of R2
a
b
Push factora
0.37
69%
0.14
33%
Pull factorb
0.17
31%
0.28
67%
Cumulative R2
0.54
100%
0.42
100%
Push factor includes the variables: domestic sales, low market-share, medium market share,
Global Competitive Index country of origin.
Pull factor includes the variables: Composite Global Competitive Index of foreign countries
and Potential demand (millions US$) for each retailer
.
The present research supports the claim
that both the push and the pull factors are
linked to international sales of large-scale
retailers.
The study has found for all
international retailers that higher levels of
saturation of domestic markets positively
affect the extent of retailers' involvement in
foreign markets. Notwithstanding, this impact
is higher for grocery retailers. Possibly, this is
because foreign market entry may be
logistically more complicated for grocery
retailers than for non-grocery retailers,
reflecting higher costs of handling and
stocking fresh produce, necessary investments
in cooling or freezing storage and display
facilities and in cold supply chains.
Additionally,
chains selling primarily
groceries need to rely substantially on local
suppliers to offer freshly produced products at
reasonable prices. In their study of the Ahold
chain, Burt, Dawson, & Larke, (2006) report
that foodchain stores worldwide have been
sourcing between 70% and 90% of their
merchandise locally. This is done to shorten
the time span and distance of deliveries and
logistics for these products.
Non-grocery retailers operate differently.
Their stock turnover is lower than that of
grocery retailers and they rely more on
sourcing from overseas suppliers even to
supply their domestic markets (Liu &
McGoldrick, 1996). Such is the case, for
example, with the clothing industry where
over half of all clothing merchandize sold in
the U.S. originates from overseas (Greffi,
2001; Tyler, 2003). Therefore, operating
international supply chains to service overseas
stores is easier and quicker for non-grocery
compared to grocery retailers. As a result,
logistics costs for setting up overseas stores
may be much lower for these retailers,
reducing their entry costs to foreign markets
and acting as an incentive.
The present research also found that the
effect of the pull factor inhibiting foreign
entry, namely, the competitive intensity of
foreign markets upon the extent of retailers’
involvement in non-domestic markets is
applicable only for retailers with non-grocery
formats. Possibly, this may be related to the
differences between local, store-based
competition and national, chain-based
competition. The variable used in this study
monitors the extent of competition on a
national level rather than on the local level.
However, grocery retailers are primarily
concerned with the local, store-based
competition because they chiefly carry
convenience goods, which, according to the
Central Place Theory, command smaller, local
trading areas (Berry & Garrison, 1958;
Holton, 1958; Regmi & Gelhar, 2005). In
contrast, non-grocery retailers sell mainly
shopping or specialty goods that control larger
trading areas and are primarily concerned with
national competition.
The positive
relationship between the extent of domestic
competition and the involvement in
international retailing of non-grocery retailers
reflects the fact that a strong competition
among national brands of non-grocery chains
in the domestic markets reduces the profits
and limits potential growth of such nongrocery retailers. Consequently, these chains
seek alternative markets abroad.
With respect to the impact of the pull
factor variables, this research asserted the
negative relationship between the extent of
competitiveness in retailers’ international
foreign markets and the extent of their
involvement in these markets only for the
grocery retailers. It is possible that this result,
55
too, reflects differences in retailing strategies
of grocery and-non grocery categories.
Grocery retailers who offer food compete
mainly over their ability to offer great variety,
accessibility, low price, and freshness of foods
such as fresh produce, meat, and milk
products. As mentioned earlier, retailing of
these products demands good local contacts
and well-organized local supply chains in the
foreign markets, thus posing limited
advantage for international supply chains.
Local competitors may find it easier to
compete on this basis. Local competitors of
food retailing in international markets may
also benefit from better knowledge of local
cultures, eating habits, holidays, traditions,
religious taboos, and other cultural factors that
bear significance in the food retailing industry.
In contrast, non-grocery retailers may be less
concerned with local competition in foreign
markets. Their retailing strategy for local
customers is often based on the strength of
internationally known brands (Ailawadi &
Keller, 2004) and their association with
Western-style shopping and consumption
experiences (Birtwistle & Freathy, 1998; Burt,
1993; El-Amir & Burt, 2008; Fernie, 1995;
Tat, 2000; Yu & Bastin, 2010). Local
competitors offering non-grocery products
such as clothing or household furniture are
unable to compete on these scales of retail
attraction.
Results of the current study with respect of
potential demand and its effects on retailers’
international involvement and success support
the underlying premise of the pull model.
Retailers’ propensities to venture into foreign
markets increases in correspondence with
greater sales potential.
The research question aimed to assess the
relative importance of the two factors, push
and pull, in contributing to retailers’
involvement in global markets. The results
show different answers for each type of
retailers studied in this research with different
relative importance assigned to the push and
56
pull factors in each of the retailing categories.
Push variables were found to be much more
important among grocery retailers while pull
variables were found to be more important
among non-grocery retailers. This difference
may reflect the dissimilarities in the relative
strengths and weaknesses of retailers operating within these retail categories as well as of
corresponding investments required to operate
abroad. Factors that are considered to be impediments for one retailing category may thus
be used as incentive for the other category,
and so grocery retailers may prefer first to exhaust their domestic markets before moving
overseas, while non-grocery retailers may prefer to first exhaust their prospects of international entries before looking back at their domestic markets. Notwithstanding, explanations offered herein were not researched in
this study and as such, they may only serve as
useful venues of future research in this area.
THEORETICAL IMPLICATIONS
This research contributes to the current
theory of retail expansion by suggesting that
the basic Push and Pull Model cannot be applied “as is” to international retailing. It must
first be adjusted by adding intervening variables that reflect a retailer’s strategy, such as
the retail category under which it operates.
Choice of different retail strategy as per category leads to completely opposite global strategies. Methodologically, this article contributes by showing how international sales data
can be used to analyze retail internationalization processes.
Implications for marketing and retail managers
The results of this study carry several possible advantages for retail managers who find
foreign ventures very expensive and highly
risky operations characterized by high probability of failure and retreat. The identification
of variables that can identify antecedent conditions for global operations is therefore very
useful. The results of this research show that
large-scale grocery retailing formats should
expand to foreign markets only when detecting saturation in their domestic markets. In
contrast, large-scale non-grocery retailers need
not defer global expansion until they saturate
their domestic markets and can move abroad
disregarding their position in the domestic
market. Instead, they should consider the size
of the potential foreign demand in their foreign markets and the extent of competition
they face there. If these conditions are appealing, they should branch out beyond their domestic market.
Future Research
The exact rationale underlying the differences between grocery and non-grocery retailers was not studied here in detail. These differences may reflect divergence in brand power, in logistical and operational requirements,
or in regulatory demands each retail segment
faces. However, none of these factors have
been explored in this study and should therefore be analyzed in depth in future research.
The variation found between retailers of different retailing formats implies that additional
structural and organizational characteristics
may also be influential in the Push and Pull
deliberation. We suggest that future researchers expand the research scope and study effects of other intermediary organizational variables such as the effects of changes in retail
life cycle, types of country of origin, differences in cultural values, age of retailing organizations, and so on. Finally, this research
was limited to large-scale retailers. We suggest that future research should also study
smaller international retailers.
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Israel.
Social Media: The New Trend in Marketing Communication
Antonios Zairis
Lagia Paraskevi
ABSTRACT. The Internet and social media platforms have fundamentally changed the world we live
in, and especially the way we communicate and purchase goods. This study aims to provide an
overview of social media use as a marketing tool, and the way it has changed the traditional
marketing landscape. It also attempts to identify its use by Greek companies. In order to investigate
the research objectives, an online survey was conducted to a targeted sample of Greek companies.
Results showed that companies have been using social media as a marketing tool for more than two
years and that the most popular were social networks and microblogging platforms. They were used
mostly for promoting products and services and attracting new customers. Despite their short period
of usage their importance was acknowledged.
KEYWORDS. Social media, Web 2.0 platforms, marketing communication, online marketing,
Greece
INTRODUCTION
In the heart of all communication
developments, there is a term that has reached
the status of a “buzzword” (Constantinides,
Romero, & Boria, 2008), a “phenomenon”
(Heidemann, Klier & Probst, 2012); it has
been characterised a “sphere of influence”
(Hanna, Rohm & Crittenden, 2011), a “gamechanger” (Edwards, 2011), a “revolution”
(Smith, 2009), and has even given its name to
an “entire era” (Kaplan & Haenlein, 2010):
social media. Hundreds of millions of people
have adopted them as part of their private and
public lives, and also as an integral element of
their shopping experience with incredible
speed (Lorenzo-Romero, Alarcon-del-Amo, &
Constantinides, 2014).
In early 2014,
Facebook had 1.28 billion monthly active
users (from 431 million in the first quarter of
2010), and at the same time Twitter had
approximately 255 million users (from 30
million in 2010), while on YouTube over 6
billion hours of video were watched per
month.
Furthermore, in 2013, 64% of all internet
users accessed social media services (Statista,
2014). People use the Internet in order to
search for information, communicate, browse
the Web in general and purchase goods
(Rodgers & Sheldon, 2002). In their essence,
social media comprise all these primary
purposes, and as a result they have been
embraced
by
many
companies
as
communication media, as well as distribution
and transaction channels (Constantinides et
al., 2008). It is obvious that this is the place
Antonios G. Zairis, Ph.D. is the Vice President of the Hellenic Retail Business Association and a
marketing professor in Athens, Greece and Lagia Paraskevi, ΜΒΑ is an Aftersales Marketing Specialist
in Thessaloniki, Greece.
Address correspondence to Dr. Antonios G. Zairis, 75 Dardanelion Street, Athens (Ano Glyfada)
16562, Greece. E-mail: antoniszairis@gmail.com
62
Zairis and and Paraskevi
where consumers are, and businesses want to
be (Baird & Parasnis, 2011).
This study aims to provide an overview of
social media use as a
marketing tool and investigate their adoption
in the Greek market. More specifically it attempts to:
i.
ii.
iii.
iv.
v.
Identify the categories of social
media platforms that are most
commonly used (for business
purposes) in Greece.
Ascertain the duration of their
usage in the Greek market.
Specify the reasons for their
adoption.
Reveal
the
companies’
opinions about the use of social
media as a marketing tool.
Discover if their use in Greek
companies is well organised.
The paper is organized as follows: First,
the theoretical framework is presented by
analysing the concepts of social media and the
way
they
have
changed
marketing
communication. Second, the methodology of
the research is presented followed by a
presentation of the findings. We conclude
with the results’ discussion, managerial
implications, and suggestions for future
research.
THEORETICAL FRAMEWORK
The Social Media Basics
Social media, in the sense that they are
known today, began when Bruce and Susan
Abelson (presumably in 1998) created the
“Open Diary” (OD), an online journal that
joined dairy writers into a group of people,
thus creating a community. Their project
could be described as an early example or a
precursor of the current social networking
sites as many of its innovating features are
63
still used. At the same time, the term
“weblog” appeared (Kaplan & Haenlein,
2010). Boyd and Ellison (2007), on the other
hand, suggested that the first social
networking site was the SixDegrees.com,
which was introduced in 1997. Regardless of
which came out first, as the speed of Internet
access and usage rates increased, those
communication tools became even more
popular, and that ultimately led to the creation
of even more social media platforms. Later
on, with the launch of MySpace (in 2003) and
Facebook (in 2004) the term “social media”
was conceived (Kaplan & Haenlein, 2010).
Although there is a growing literature
regarding social media, it is difficult to find a
definition that is widely accepted or analyses
the term with absolute clarity (Malita, 2011).
Jones (2009, p.101) characterized them as “an
online media category where people are
talking, participating, sharing, networking,
and bookmarking online.” He also pointed
out that what distinguishes them from
traditional media is that their use gives people
the “feeling of conversation,” as opposed to
the old “one-way” information broadcast.
Social media have also been described as the
use of digital media and Internet technology in
a way that “provides a mechanism which
allows users to connect, communicate, and
interact with other people and their mutual
friends through instant messaging or social
networking sites” (Correa, Hinsley, & Gil de
Zipiga, 2010, p. 248). In addition, the term
was used to delineate the activities, practices,
and behavior of people who share information,
knowledge, and opinions (through words,
pictures, videos and audio) using web-based
applications and also function as a community
(Safko & Brake, 2009). The JISC (2010)
described them as innovative web tools that
enhance collaboration and communication
between their users, and Carton (2009)
commented that they are just technologies that
facilitate conversations.
Α sufficiently
descriptive definition was stated by Kaplan
64
and Haenlein (2010, p.63), who characterized
social media as “a group of Internet-based
applications that were built on the ideological
and technological foundations of Web 2.0 and
allow the creation and exchange of User
Generated Content.” These two terms (Web
2.0 and UGC), although interrelated and
interdependent with the social media concept,
are often used inaccurately (Berthon, Pitt,
Plangger, & Shapiro, 2012) and should
therefore be clarified. The term Web 2.0 was
officially conceived in 2004 by Dale
Dougherty, the vice-president of O’Reilly
Media Inc. during a company meeting
involving a potential conference about the
Web (Anderson, 2007).
According to
Weinberg and Pehlivan (2011, p. 276) Web
2.0 is constituted by “network-based platforms
upon which social media applications run or
function,” or in other words, it is the
technological basis of social media (Kaplan &
Haenlein, 2010). On the other hand, the term
User Generated Content is “applied to
describe the various forms of media content
that are publicly available and created by endusers, which makes it the sum of all ways in
which people make use of social media”
(Kaplan & Haenlein, 2010, p. 61).
Academics cannot seem to agree on the
categorization of social medial either. In
2008, Fraser and Dutta suggested that social
media could be classified into five broad
categories: egocentric (e.g., Facebook),
community
(e.g.,
BlackPlanet.com),
opportunistic (e.g., LinkedIn.com), passioncentric (e.g., TheSamba.com), and media
sharing sites (e.g., Flickr) (Parent, Plangger, &
Bal, 2011). From an academic view, social
media could also be divided into five different
categories:
blogs/micro
blogs,
wikis/Wikipedia,
image
sharing,
podcasts/video-sharing,
and
community
forum/social networks (Gu & Widen-Wulff,
2010).
Nicholas and Rowlands (2011)
categorized them as follows:
social
networking, blogging, micro blogging,
collaborative authoring, social tagging/
bookmarking,
scheduling/meeting
tools,
conferencing, and image/video sharing.
Finally, Guinan, Parise, & Rollag (2014)
proposed that these applications included
enterprise collaboration platforms (e.g., Jive),
company-owned digital properties (e.g., My
Starbucks Idea), public social platforms (e.g.,
Facebook), mobile technologies (e.g., Apple
App Store), and individual social tools (e.g.,
blogs).
It should be noted that each
classification is relative, as one social platform
may belong to more than one category. For
example, although Twitter is a micro blogging
service, it can also be considered as a social
networking site (Safko & Brake, 2009).
From Passive Reading to Creating Content
Aljukhadar and Senecal (2011) proposed
that online consumers were divided into three
main categories: the basic communicators, the
lurking shoppers, and the social thrives who
engage with more interactive media. Social
media
have
transformed
consumers
(especially those who belong to the third
category) from passive readers of a company’s
web site to content creators. According to
Drury (2008), when referring to the social
media concept researchers should emphasize
the “social” element and not the “media” as it
is the people who create the message. The
content (in the form of text, short message,
picture or video) could be a spontaneous
informal discussion between consumers who
share the same interests about a product or
service, but it could also evolve into a
structured review that includes a detailed
evaluation of a product to a user’s blog or
YouTube channel (Berthon et al., 2012).
Consequently, consumers participate either in
the demotion of a brand by posting negative
comments in an online medium or to its
promotion by praising it and even sometimes
defending it against bad reviews (Colliander
& Wien, 2013). The exact motives that drive
consumers to post their opinion have not been
fully ascertained. The trend could be attributattributed (in the case of a positive review) to
an altruistic behaviour, or to an attempt to gain
social acceptance/status and admiration
regarding an exceptional purchase, and
ultimately be characterized as an “expert.”
The opposite situation (that of a bad
evaluation) could be the result of a hostile
behaviour or simply a search for revenge
(Chen, Fayb, & Wangc, 2011). Parent et al.
(2011) asserted six gradual levels of consumer
engagement:
viewing (the content),
forwarding (sending a link), commenting
(posting comments), creating (their own
richer) content, moderating (discussions that
analyse their work), and finally arbitrating
(discussion between commenters).
Social Media Have Changed the Traditional
Marketing Landscape
A few years ago, marketing managers
considered the Internet as another advertising
channel, and used it as a magazine
advertisement, equipped with sound and
motion. They placed banner ads and pop-ups
to display advertisements on websites, but
once again consumers identified them as
distractions and found ways to ignore or avoid
them (e.g., pop-up blockers). Those methods
were proven either inefficient or not as
effective as expected, and therefore a new
approach was needed (Weber, 2009). At the
same time, the popularity and huge impact of
social media platforms could not have passed
unnoticed by the business world. Marketing
managers felt the pressure to embrace social
media in order to keep up with new trends,
harness their potential power, and follow the
changes they brought to consumer behaviour
(Bond, 2010; Dutta, 2010). Two concepts are
directly related to the use of social media as a
marketing tool, and explain the way it works:
electronic word-of-mouth (eWoM) and viral
marketing (Kaplan & Haenlein, 2011).
65
The term “word-of-mouth” (WoM) refers
to sharing information about a product or
service between a consumer and a friend, a
colleague or other acquaintance (Marketing
Power, 2010). In its traditional form, WoM is
also defined as the one-to-one or face-to-face
exchange of information. Collecting and
analyzing
customers’
comments
in
newsgroups and social media platforms can be
very useful for marketing research purposes
(Godes et al., 2005). According to Katz and
Lazarsfeld (1955), WoM can also influence
consumer behavior and be more effective than
traditional advertising methods (e.g., print) in
impacting brand switching decisions. Kaplan
and Haenlein (2011) stated that in comparison
to traditional WoM, eWoM has a higher
diffusion speed for new pieces of information.
When WoM is exchanged using traditional
face-to-face communication, diffusion is
limited by the size of the social network that
each person maintains. More specifically,
people usually have only three close friends
and a total social network of no more than 150
people (Hill & Dunbar, 2003). On the other
hand, eWoM can reach a larger group of
customers at a higher speed. Furthermore,
eWoM is easier to monitor, has a lower cost,
and its operation can be precisely controlled
by marketers through the introduction of
automated feedback mediators (Dellarocas,
2003).
In the marketing literature, viral marketing
has been studied under a number of other
terms like: “word-of-mouse” (Goldenberg,
Libai, & Muller, 2001), “buzz marketing”
(Thomas, 2004), “stealth marketing” (Kaikati
& Kaikati, 2004), and “word-of-mouth
marketing” (Kozinets, De Valck, Wojnicki &
Wilner, 2010). Viral marketing is positioned
in the e-marketing domain and has the ability
to impact
consumers’ behaviour by
influencing their perceptions, attitudes, and
views. In comparison to the other forms of
marketing and advertising campaigns, it is
considered to be a low cost technique
66
(Woerndl, Papagiannidis, Bourlakis, & Li,
2008). Its concept is based on a peer-to-peer
communication
(consumer-to-consumer)
process instead of a company-to-consumer
communication in order to spread a message
about a product or service. This ultimately
leads to a rapid and cost effective acceptance
of the product (Krishnamurthy, 2001). The
communication style used for transmitting the
marketing message is usually informal. The
receivers filter and forward it to their peers,
who may or may not be interested in the
message’s content (Woerndl et al., 2008).
Although Welker (2002) stated that viral
marketing just a new perception of the
traditional word-of-mouth paradigm, the use
of Internet technology is essential for
spreading the message among individuals
(Woerndl et al., 2008) faster than any other
medium (Lindgreen, Dobele, Beverland, &
Vanhamme, 2008). Finally, according to
Kaplan and Haenlein (2011, p.65), viral
marketing is defined as “electronic word-ofmouth where a form of marketing message
that relates to a company, brand, or product is
transmitted in an exponentially growing way,
often through the use of social media
applications.”
Although, social media platforms used for
business purposes are based on eWoM
(Ahrens, Coyle, & Strahilevitz, 2013), they
have engendered new ways for companies to
communicate with their customers and have
brought tremendous changes in the traditional
marketing concept (Hansen, Shneiderman, &
Smith, 2011).
The term “social media
marketing” refers to the process of gaining
traffic or attention through social media sites
(Searchengineland.com, 2011). Mangold and
Faulds (2009, p. 358) referred to social media
as the new “hybrid element of the promotion
mix,” which is also consistent with the use of
the
traditional
Integrated
Marketing
Communication (IMC) tools (i.e., advertising,
personal sales, public relations, and direct
marketing). In that case, social media could
be sponsored by a company, other individuals,
or organizations. Stokes (2011) on the other
hand, suggested that social media have
changed the traditional “4 Ps” of the
marketing mix by adding a fifth “P”: People.
This element refers to the power that the
digital world gave consumers, and their strong
engagement in the marketing mix. Through
product customization, peer-to-peer sharing,
creation of online communities, and
consumer-centric organizations, people can
participate more actively in a company’s
digital marketing strategy. According to
Doctoroff (2013), social media have
differentiated the “bottom-down” model of
traditional advertising to a “bottom-up.” In
the new model, the consumer is not the
receiver of a memorable and creative message
but an active participant. If the UGC is spread
widely and fast, it will probably attract the
attention of the traditional media (newspaper
and magazine advertisements, outdoor
advertising, radio commercials, and television
spots) and will ultimately be spread to other
audiences as well. The author also stated that
those two models could coexist even
simultaneously (Hollis, 2013).
Morgan,
Jones, & Hodges (2010) pointed out that the
fundamental element for social media’s
lucrative integration in a company’s marketing
strategy should be the development of “social
authority” (i.e., the firm’s establishment as the
“expert” and therefore as the “influencer”).
The second promotion-related role of
social media is unique: Customers can use it
to communicate with each other. Gillin
(2007) pointed out that by using the traditional
media, a dissatisfied customer could spread
his negative opinion about the company to
about ten people. In the social media era,
however, dissatisfied consumers can spread
the word to 10 million people virtually
overnight. As a sphere of influence, social
media focus on consumers’ experiences
(Hanna et al., 2011), who now expect brand
communications to be a two way dialogue. It
appears that consumers relate more to a brand
after reading other customers’ reviews on social media platforms (Ioanas & Stoica, 2014).
Campbell, Ferraro, and Sands (2014) pointed
out that it is the consumers’ participation that
differentiates social media marketing from
social media advertising, which ultimately
leads to “earned media” and not “paid media.”
It is obvious that social media have changed
the nature and practice of marketing (Daniasa
et al., 2010).
Companies “lead” consumers to their
blogs and web sites basically by using two
techniques: Search Engine Optimization
(SEO) and Search Engine Marketing (SEM).
These techniques could optimize a blog, a
webpage, a photo, or video in order to become
“search engine friendly” and maximize search
engine rankings (Safko & Brake, 2009). The
SEO technique refers to the way search engines work, the information people are searching for, the actual search terms or keywords
users type into search engines, and also which
search engines are preferred by their targeted
audience. Optimizing a website may involve
editing its content and HTML in order to increase its relevance to specific keywords and
remove barriers to the indexing activities of
search engines. On the other hand, SEM is a
form of Internet marketing that involves the
promotion of websites by increasing their visibility in search engine results pages through
optimization and advertising (Sherman, 2007).
Social Media as Marketing Tools
Companies have embraced social media
platforms in an attempt to differentiate themselves from their competitors (Martini, Massa
& Testa, 2014), since these tools can provide a
tremendous amount of data about their users,
and can therefore offer managers new information regarding (among other issues) consumers’ behaviour (Schoen et al., 2013). Social media not only have expanded people’s
interactions (private and public), but also have
67
the ability to influence their decisions, and
therefore are considered as sophisticated
communication tools (Barbulet, 2013). An
impressive 87% of the companies that were
included in the Fortune Global 100 (i.e., an
annual ranking of the world’s largest corporations) had adopted at least one social platform
as a communication medium, with Twitter being the most popular (Burson-Marsteller,
2012). It appears that marketing managers
have increased the advertising budgets of social media tools, which are used in conjunction with traditional media. Based on a 2012
survey, 66% of the companies used paid social
media advertising together with other types of
online advertising, while 51% used social media combined with other types of offline advertising. This was characterized as a fairly
new trend since most advertising agencies declared that they had been using them for less
than three years (Nielsen, 2013). According
to Erdogmus and Cicek (2012) the UGC on
social media could enchase brand loyalty
which is an extremely important factor for a
company’s success, since a brand’s online image is equally critical to its offline image
(Hollenbeck & Kaikati, 2012; Gensler, Volckner, Liu-Thompkins, & Wiertz, 2013). He,
Zha, and Ling Li (2013) pointed out that firms
should attend not only the content posted on
their social media sites, but on their competitors as well.
Social media tools have been found to effectively promote the work of public relations
professionals (e.g. DiStaso, Mc Corkindale, &
Wright, 2011; Alikilic & Atabek, 2012;
Verhoeven et al., 2012; Momoc, 2013), nonprofit organizations (e.g. Eagleman, 2013),
museums (e.g. Fletcher & Lee, 2012), and
luxury fashion brands (Kim & Ko, 2012) as
they increase brand visibility and trust as well
as audience engagement (Capitello, Agnoli,
Begalli, & Codurri, 2014; Ching-Wei, 2014).
According to Qualman (2013) managers
should integrate social media in the company’s overall strategy, including the depart-
68
ments of human recourses, customer service,
and information technology and not limit their
use to marketing and public relations. An organization’s social media roadmap should take
account of its customers (present and future),
its employees, and nearly everyone (e.g., suppliers, vendors) who engages in the firm’s activities (Benioff, 2012). Furthermore, Habibi,
Laroche, & Richard (2014) added that a precise model that managers should follow is not
yet available. The issue regarding the use of
social media technologies as a marketing tool
is not whether companies should embrace it,
but the way they will (Parent et al., 2011).
Based on the literature review, the research attempts to address the following questions:
Q1: What types of social media do Greek
companies use as a marketing tool?
Q2: For what purposes are they usually used?
Q3: How long have they been using them?
Q4: What is their opinion regarding their use
and importance?
Q5: How well organised is their use?
METHODOLOGY
Sample and Data Collection
In order to investigate the objectives of the
present study, an online survey was conducted
during the first half of 2012 with a targeted
sample of Greek companies. A sampling
frame was extremely difficult to obtain, since
there was no official record for the total number of companies that used social media in
Greece.
The method chosen was simple random
sampling. The selected companies all fulfilled
three basic criteria: They had their own professional website; they used “chiclets” (small
logo buttons) on their web pages that encouraged users to connect to their social media
sites and applications; and all belonged to the
country’s service sector.
The data collection approach was the selfadministrated survey. Of the total of 300
companies (sampling frame) that were invited
to complete the questionnaire (in order to cover a wide range of sub-sectors), only 32 responded.
After the questionnaire was originally developed, it was pre-tested with a small number
of companies. The respondents were asked to
evaluate the questions’ clarity, include the
time consumed to complete the questionnaire,
and indicate any possible omissions. The final
questionnaires were then mailed either to the
email address of the company’s marketing department, or to its general email address. The
initial mailing was accompanied by follow-up
calls in order to ensure that the employee responsible for the company’s social media
campaign would be the one answering the
questionnaire. The SPSS program was utilized as the main tool for the data analysis.
The company profile of the participants is depicted in Table 1.
Based on the results, the majority of respondents (37.5.0%) were large organizations
of more than 250 employees. A quarter
(25.0%) of the sample was medium sized
companies (51 to 250 employees), and another
25.0% were very small companies (1 to 10
employees).
The rest of the sample (12.5%) was small
companies (11 to 50 employees). The participants represented a broad range of sub-sectors.
The organizations with the largest representation included computer stores and companies
involved in e-commerce (18.8%), retail stores
(15.3%), media channels (12.5%), and also
food and drink companies (9.4%). The subsectors of shipping/airline companies, industrial equipment, furniture/household equipment, tourism, and car distributors each covered 6.3% of the sample.
The health and energy sub-sector accounted for 3.1% each. Finally, 6.3% of respondents identified “other” as their industry classification. Respondents were also asked to de-
scribe the use of Internet in their company.
More than half of the survey respondents
(59.4%) stated that the use of Internet was at a
very good level.
Additionally, 28.1% characterized it as
“good” and 15.5% as “fair.” None of the re-
69
spondents described it as “poor.” The findings showed that Internet use in the vast majority of the sample (87.5%) was above average.
Table 1. Companies’ Profile of the Participants
Category
Responses
Percentage (%)
Number of Employees
1-10
11-50
8
4
25.0
12.5
51-250
8
25.0
More than 250 employees
12
37.5
Business sector
Shipping/airline companies
2
6.3
Industrial equipment
2
6.3
Health
1
3.1
Retail stores
5
15.3
Energy
1
3.1
Furniture / Household equipment
2
6.3
Food & drink companies
3
9.4
Media
4
12.5
Tourism
2
6.3
Car distributors
2
6.3
Computer stores and e-commerce
6
18.8
Other
2
6.3
Very good
19
59.4
Good
9
28.1
Fair
4
12.5
Poor
0
0.0
Total
32
100
Use of Internet
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Measureements
Based
d on the objjectives of the
t current rer
search, th
he variabless were divid
ded into bacckground variables
v
an
nd factors reelating to th
he
social media use. The
T backgro
ound variablles
consisted
d of the com
mpany’s sizee, business aca
tivity, an
nd status off internet usse in order to
outline th
he organizatiion’s profilee.
The measures
m
co
oncerning social media ini
cluded th
he types of so
ocial media used, the tim
me
periodd of their usse, an evaluaation of theiir usage, aand finally hhow well orgganized theiir use
was (bby investigaating the exisstence of a ssocial
mediaa strategy, a specific peerson or divvision
appoinnted for theiir operation,, and whetheer the
compaany is familliar with thee terms SEO
O and
SEM)).
Thhe classificaation that waas applied iin the
study was a shorrter version (7 out of thhe 15
categoories) of thee one that w
was introduceed by
Safko and Brake ((2009).
Figure 1. Social
S
Mediaa Categories
The categ
gorization ap
pplied was as
a follows:
SNS- e.g., FaF
i. Sociial Networking Sites (S
cebo
ook, Googlee+ , Linked
dIn, MySpacce,
Bebo
o)
ii. Publlishing (e.g.,, Blogs, Wik
kis)
iii. Micrroblogging (e.g.,
(
Twitterr)
iv. Videeo/audio Shaaring (e.g., YouTube)
Y
v. Photto sharing (ee.g., Flickr, Picasa)
P
vi. Liveecasting (e.g., Skype)
vii. Otheer
The “Other”
“
cateegory had inccorporated th
he
categoriies of virtuall worlds, gam
ming, produ
uctivity ap
pplications, aggregators,, RSS, searcch,
mobile, and interperrsonal.
RESULTS
S AND DISC
CUSSION
Used
Categgories of Soccial Media U
Thhe first factoor analysed was the typpes of
social media thatt Greek com
mpanies use as a
markeeting tool. S
Social Netwoorking Sites (such
as Faacebook, LinnkedIn, MySpace, Gooogle+,
etc.) w
were the chooice of all suurvey particiipants
(100%
%). A signifficant proportion of the sample (443.8%) statedd that they uused Micro blogging pplatforms (T
Twitter) andd Video Shharing
tools like YouTuube. Additioonally, 31.3% of
the coompanies ussed Blogs ((Publishing), and
21.9%
% used Liveccasting tools such as Skkype.
Almosst 10% indiccated the usse of Photo Sharing (F
Flickr, Picasaa etc.) platfo
forms, and only 1
Zairis and and Paraaskevi
respondeent (3.1%) selected
s
“Otther,” indicaating RSS feed as thee choice off social med
dia
tool (Figu
ure 1).
Time of Usage
The majority (4
46.9%) of th
he survey rer
spondentts had been
n using sociial media for
f
more thaan two yearrs (since 20
010). An im
mportant percentage
p
(3
37.5%) had been utilizin
ng
them for a period of one to two years, whilee a
small percentage off the samplee (15.6%) had
been usin
ng social media
m
for lesss than a yeear
(Figure 2)
2
71
Purpoose of Their Use
Baased on thhe results, promoting their
produucts and serrvices was the main reeason
%) that Greekk companiess used sociaal me(100%
dia. A
Attracting neew customerrs was the seecond
most important one (78.1%
%), followedd by
providding informaation about tthe companyy and
its prooducts (71.99%). More than half oof the
compaanies chose the establishhment of exiisting
clientss (56.3%) aand the imprrovement off corporatee image (53.1%).
Figure 2. Time of U
Use
he companiees surveyed
d, 37.5% used
Of th
social media
m
for obttaining and analyzing ini
formation
n from consumers, while a very smaall
percentag
ge (9.4%) had
h adopted social med
dia
for providing custom
mer service (F
Figure 3).
Evaluation of Sociall Media Usee (Usefulnesss)
The vast
v
majoritty (90.6%) of
o the samp
ple
believed that social media was a useful maarool. Only a small perceentage (9.4%
%)
keting to
found theem moderateely useful, an
nd none of th
he
participan
nts charactterized them
m as useleess
(Figure 4).
4
Imporrtance of Soocial Media
Thhe next step of the reseaarch was to eexamine thee companiess’ opinions rregarding thhe importannce of embeedding sociaal media in their
markeeting strateggy. The maajority of paarticipants (65.6%) connsidered soccial media aas importannt tools. A qquarter (25.00%) of the suurvey
particiipants believved that sociial media usee was
neitheer important nor unimpoortant, and oonly a
small percentage (9.4%) fouund them uunimportannt. None of the responndents charaacterized thhem as very unimportannt (Figure 5)..
72
JOURNAL OF
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RKETING
Social Media
M
Strateg
gy
The next
n factor analysed wass the existencce
of a specific social media
m
strategy as part of
their marrketing strateegy. The maajority of re--
sponddents (62.5%
%) had built oone, as opposed
to the 25.0% whicch indicated that they haad
not. F
Finally, 12.5% had no oppinion on thee
subjecct (Figure 6).
Figurre 3: Purpos e
Figure
F
4. Ev
valuation/ Ussefulness
73
Responsiibility
Sociall Media Buddget
Respondents werre also asked
d to clarify th
he
person(s)) or division
n in charge of the sociial
media usse. More thaan half respo
onded that th
he
marketin
ng division was respon
nsible for th
he
social meedia platform
ms. Of the sample,
s
21.9
9%
stated th
hat one or more
m
employ
yees were rer
sponsiblee, and a smaall percentag
ge (6.3%) ind
dicated thaat the comp
pany’s man
nager was th
he
person responsible.
r
“Other” waas chosen by
b
12.5%, but
b none speccified (Figurre 7).
In response too the questioon about whhether
they hhad a social media budgget, survey pparticipantss’ responsess were almoost evenly split.
Whilee 40.6% stateed that they had a sociaal media buudget, the ssame percenntage statedd that
they ddid not. A
Additionally, 18.8% repported
that thhey did not kknow whethher their com
mpany
had suuch a budgett (Figure 8).
Figurre 5. Importaance of Social Media Usse
Search Engine
E
Optim
mization an
nd Search EnE
gine Marrketing
The vast
v
majoritty of the sample (81.3%
%)
claimed that
t
they weere familiar with the terrm
Search Engine
E
Optim
mization. Meanwhile,
M
ono
ly 18.8%
% had no kno
owledge of the term. FiF
nally, respondents were
w
asked whether they
know thee term Search Engine Marketing.
M
It
seems th
hat the majo
ority (68.8%
%) are familiiar
with the term, whille 31.3% arre not. Th
his
hat Greek co
ompanies arre accustomeed
shows th
to these new
n Internett marketing methods (Fiigure 9).
CLUSIONS
S AND IMP
PLICATION
NS
CONC
Thhe Internet aand social m
media tools have
fundam
mentally chhanged the w
world we livve in,
especiially the waay we comm
municate andd how
we buuy or sell prooducts. Thee developmeent of
social media suchh as blogs, social netw
works,
virtuaal communitiies, wikis, m
media file shaaring,
and otther collaborrative projeccts has had a significannt impact oon the markketing systeem as
well. There has never beenn so much iinformationn available and never have consuumers
had soo much poweer and influeence.
74
JOURNAL OF
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RKETING
Figurre 6: Existen
nce of a Sociial Media Strrategy
Figu
ure 7. Person
n/Team Resp
ponsible for the Use of S
Social Mediaa
ms such ass Web 2.0 and Usser
Term
Generateed Content, electronic
e
Word-of-Mou
W
uth
and viraal marketing
g have chan
nged the waay
marketin
ng experts and pub
blic relations
practition
ners
communicate
with
theeir
customerrs. Web 2.0
0 provided the
t foundatio
on
for the emergence
e
of social media
m
and th
he
existencee of content created by end-users. In
addition, eWoM enabled
e
new
w pieces of
w
a high
her
informatiion to be trransmitted with
diffusion
n speed betw
ween consum
mers and theeir
friendds, colleaguees, or otheer acquaintaances.
Throuugh all thesse functionss, the markketing
messaage is trannsmitted faaster and more
efficieently to thouusands of peoople almost llike a
“viruss.”
Markeeting experrts appraisee the
imporrtance of soccial media aand make efforts
to expploit the pow
wer of this neew medium.. But
still, thhe rise of soocial media in marketingg does
not neecessarily m
mean that traditional m
media
are us eless.
75
Figu
ure 8. Existeence of a Soccial Media B
Budget
Figuree 9: Familiarr with the Teerms SEO annd SEM
ng
Neither does it meaan that the old marketin
rules do not apply an
nymore. Co
ompanies mu
ust
find the perfect com
mbination between the old
o
ucand the new media in order to create a su
cessful caampaign.
Mark
keting experrts use each social med
dia
category according to the com
mpany’s objeec-
tives. For exampple, advertissers can use content shharing mediaa such as YoouTube to laaunch
an advvertising cam
mpaign for the promotion of
a new
w product, annd they can uuse other caategories suuch as SNS
S, blogs, annd wikis to help
build or repair a company’s image. Coonclusivelyy, not all cattegories of social mediia are
76
suitable for all purposes. The effectiveness of
social media campaigns can be measured and
analyzed in detail through the use of various
analytic tools. Still, this is an evolving field
and marketing managers should proceed with
caution.
The authors completed this paper with the
examination of social media usage as a marketing tool in the Greek market. The time period in which the research was conducted was
also an extremely important factor that should
be taken under consideration. As the ongoing
economic crisis had reduced the advertising
spending in Greece by 47.34% (almost half of
its revenue) from 2009 to 2011 (GR-Reporter,
2012), social media could be used as a low
cost/mass audience solution. According to our
study, the most popular social media in
Greece are SNS, micro blogging, and video
sharing sites (Q1). Despite their recent adoption, they are considered to be a very important communication medium (Q3, Q4),
confirming the study of Kahar (2012) in Malaysia. More specifically, results showed that
social media are used mostly for promoting
new products and services and attracting new
customers (Q2). Most Greek companies have
a specific social media strategy, and the marketing division is usually responsible for their
use (Q5). In conclusion, although their use is
in early stages and although they are considered to be a new part of the marketing mix,
they are acknowledged as a useful marketing
tool, which can help a company achieve its
goals.
These findings can be used both by academics and by marketing managers as they
emphasize the use of the newest trend in marketing communication. The paper contributes
to the current literature by analyzing this new
medium and the way it has revolutionized advertising. It constitutes a useful guide for
marketing managers as well, in terms of
demonstrating the place of social media in the
Greek market.
LIMITATIONS AND SUGGESTIONS
FOR FUTURE RESEARCH
The limitations of the present study
that should be acknowledged were the following: The number of questions has not fully
covered the examined issue as our intention
was to make it easier and quicker for respondents to complete it. Furthermore, these findings should be generalized beyond the study’s
objectives so as to give a detailed picture concerning the use of social media for business
purposes in Greece.
The world of Internet technology and social media is so rapidly changing that this
study could be considered out of date even
before it has been completed. A more detailed
and systematic research study of the issue
would offer Greek companies more information about the way they should use this new
medium and the way that Greek consumers
are influenced by the use of social media. A
further study of the matter would be useful for
both marketing managers and academics.
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Enlarged Europe is playing an increasingly
more important role in the global economy. The
purpose of the Journal of Euromarketing is to
meet the needs of academics, practitioners, and
public policy makers in the discussion of
marketing issues pertaining to Europe and
European countries’ trading relationship with
other nations. The purpose of this journal is to
increase our understanding of the strategic
planning aspects of marketing management in
Europe. As well, marketing and international
business aspects of the trading relationship
between European and foreign firms are also
explored conceptually and analytically. The
unique position of the region provides
fascinating reading material for practitioners,
public policy makers and academicians. The
articles submitted to the journal create a forum
whereby a conceptual understanding of the
European markets and marketing systems be
operationalized, analytical insights obtained as
well as the past, the present, and the future of
European marketing be highlighted.
The manuscripts submitted should report the
results of cross-cultural/national and comparative studies conducted among countries of Europe
and European countries and other nations. The
articles submitted can be based upon a single
country of the region and/or industry there upon
with a concerted effort to contrast the
results/findings and managerial implications
with those obtained by international marketing
scholars/practitioners elsewhere. Both thought
provoking and well-developed and documented
conceptual/ theoretical as well as empirical
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must have an applied, managerial orientation.
With its 28 full and 6 associate members,
EU is the world’s largest internal market
possessing nearly $13 trillion economy. Its
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factor to the global marketing scene;
emphasizing on an interaction mode – that is,
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comparison with the practices of those in
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America, the Far East and Africa.
c) Determine the best methods available for
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socio-economic,
demographic,
cultural,
competitive, and legal-political environments
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d) The method by which European marketing
institutions are linked together into viable
and coherent business systems.
e) The type of environmental factors prevailing
in different European countries of the region
which force changes in the marketing
structure of the area countries and industrial
sectors
f) How efficiently does the marketing system
perform its universal functions in the
countries of Europe and how the weaknesses
of the marketing system can be overcome in
the region?
g) The various stages of market and marketing
system development in Europe as a working
device for generalizing and, possibly,
predicting likely developments in marketing
in individual countries of the region.
Articles submitted must contain practical
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areas to be covered in the Journal:
 Cross-National Consumer Segments in
Europe
 Export behavior of European Firms
 Marketing
Strategies
of
European
Multinationals
 Marketing Implications of Strategic
Alliances of European Firms
 Markets and Marketing Systems of
European Countries
 Marketing Practices of Europe Companies
 Public Sector Marketing in Europe
 Comparative Marketing Systems in Europe
 Diffusion of Innovations Among European
Nations
 Transfer of Marketing Technology and
Reverse Technology Transfer in Europe
 Buyer-Seller Interactions and Organizational
Buyer Behavior Issues in European Markets
 Business Customs and Practices Among
European Countries
 Marketing
Interaction/Interrelationships
Between Europe and Other Trading Blocs
 European Corporate Cultures
 Legal-Political Aspects of Marketing in
Europe
 Marketing Issues Pertaining to EU, EFTA,
Council of Europe, European Members of
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 Marketing Research in Europe
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Strategies of European Firms
 Other Topics Directly Related to European
Marketing
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Papers are blind reviewed by at least two
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reviews and special case study materials based
on product/service, success and/or failure of
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Prospective authors are requested to attempt
to restrict their submissions to approximately
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figures, tables, and references. Authors should
submit their manuscripts electronically along
with a short abstract and a one-page executive
summary (this is in addition to an abstract
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Erdener Kaynak, Ph.D. D. Sc.
Editor-in-Chief
Journal of Euromarketing
The IMDA Press
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Telephone: (717) 566-3054 (Journal)
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CALL FOR PAPERS Special Issue Journal of Euromarketing Marketing in Russia
and the Commonwealth of Independent States
Submission Deadline: 30 April 2015 Guest Editor: Professor Dr. Marin Marinov The Journal of Euromarketing is published by IMDA Press and by the end of 2014 published twenty-three
volumes. It is the official Journal of the International Management Development Association (IMDA). The
aims of the journal are to serve the needs of academics, practitioners, and public policymakers concerning
marketing issues pertaining to the European context. The journal is a premier publication outlet in
international/global marketing with a distinct focus on the enlarged Europe as well as the emerging business
relationships between European countries and other regions and countries worldwide.
The call for a Special Issue on Marketing in Russia and the Commonwealth of Independent States invites
submissions focusing on the uses of marketing in the entire region of Russia and the Commonwealth of
Independent States (CIS). Marketing in this part of the world has undergone significant changes. The
regional characteristics are impressive. This region was in the recent past the former Soviet Union. Being the
key decedent of that state contemporary Russia is among the largest economies in the world. Russian
businesses and population are with ever increasing potentials. The country forms a part of the Brazil,
Russia, India, China and South Africa (BRICS) conglomeration of emerging economies, and a fresh entrant
to the World Trade Organization (WTO). The CIS region is on the ascent with ever increasing economic
significance and augmenting middle class.
The Special Issue invites submissions dealing with marketing in Russia and CIS in the following areas, but
not limited to them:
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Current issues in marketing;
Segmenting the Russian market and the markets of the CIS;
Consumer behavior:
B2B marketing;
Company product and brand strategies across various international markets;
Cultural specifics of marketing;
Domestic and international marketing strategies of Russian firms and firms from the CIS;;
Promotional strategies of Russian firms and firms from the CIS;
Distribution strategies of Russian firms and firms from the CIS;
Pricing strategies of Russian firms and firms from the CIS;
Marketing of non-for-profit firms in Russia and the CIS;
Environmental impacts on firm marketing strategies
.
The manuscripts can be theoretical and empirical, including quantitative and qualitative studies. Full papers
should be sent to Professor Marin Marinov (marinov@id.aau.dk) by 30 April 2015.
The manuscripts should be no longer than 9000 words, double spaced (including references, tables, figures
and abstracts) with a margin of at least one inch (2.54 cm) on all sides. The pages of the manuscript should
be numbered throughout.
Each manuscript has to be accompanied by a statement that it has not been published and has not been
submitted simultaneously for publication elsewhere. Authors are responsible for obtaining permission to
reproduce copyrighted material from other sources. All accepted manuscripts, artwork, and photographs
become the property of the publisher.
24
th
ANNUAL
World
Business
Congress
of the
will be held from May 27th through 31st 2015 in Famagusta,
North Cyprus in cooperation with
Eastern Mediterranean University, Faculty of Business and Economics,
Department of Business Administration
24th World Business Congress devoted to “Regional and National
Competitiveness: Defining National and Governmental Drivers
of Productivity, Growth and Profitability”
Venue: Salamis Bay Conti Resort Hotel
For details
http://www.imda.cc
"For Your International Career"
INSTRUCTIONS FOR AUTHORS
Aims and Scope. The Journal of Euromarketing aims to meet the needs of academicians, practitioners, and public
policymakers in the discussion of marketing issues pertaining to Europe. It helps to increase our understanding of
the strategic planning aspects of marketing in Europe and the marketing aspects of the trading relationship between
European and foreign firms. Today’s Europe is going to play an increasingly more important role in the global
economy, so the unique position of the region is certain to provide fascinating reading material. The Journal of
Euromarketing fosters a conceptual understanding of the European markets and marketing systems, provides
analytical insights, and highlights the past, present, and future of European marketing.
Manuscript Submissions. Authors are strongly encouraged to submit manuscripts electronically. If submitting a
disk, it should be prepared using MS Word or WordPerfect and should be clearly labeled with the authors’ names,
file name, and software program. Manuscripts should be submitted in triplicate to Dr. Erdener Kaynak, Editor,
Journal of Euromarketing, School of Business Administration, Pennsylvania State University at Harrisburg, 777
West Harrisburg Pike, Middletown, PA 17057 or by e-mail at k9x@psu.edu or ek9@comcast.net
Each manuscript must be accompanied by a statement that it has not been published elsewhere and that it has not
been submitted simultaneously for publication elsewhere. Authors are responsible for obtaining permission to
reproduce copyrighted material from other sources and are required to sign an agreement for the transfer of
copyright to the publisher. All accepted manuscripts, artwork, and photographs become the property of the
publisher.
All parts of the manuscript should be typewritten, double-spaced, with margins of at least one inch on the all sides.
Number manuscript pages consecutively throughout the paper. Authors should also supply a shortened version of
the title suitable for the running head, not exceeding 50 character spaces. Each article should be summarized in an
abstract of not more than 100 words. Avoid abbreviations, diagrams, and reference to the text in the abstract.
References. References, citations, and general style of manuscripts should be prepared accordance with the APA
Publication Manual, 4th ed. Cite in the text by author and date (ex: Smith, 1983) and include an alphabetical list at
the end of the article. Examples: Journal: Tsai, M. & Wagner, N. N. (1978). Therapy groups for women sexually
molested as children. Archives of Sexual Behavior, 7(6), 417-427. Book: Millman, M. (1980). Such a pretty face.
New York: W. W. Norton. Contribution to a Book: Hartley, J. T., & Walsh, D. A. (1980). Contemporary issues in
adult development of learning. In L. W. Poon (Ed.), Ageing in the 1980s (pp. 239-252). Washington, DC: American
Psychological Association.
Illustrations. Illustrations submitted (line drawings, halftones, photos, photomicrographs, etc.) should be clean
originals or digital files. Digital files are recommended for highest quality reproduction and should follow these
guidelines: 300dpi or higher; sized to fit on journal page; EPS, TIFF, PSD format only; and submitted as separate
files, not embedded in text files.
Color Illustrations. Color illustrations will be considered for publication; however the author will be required to
bear the full cost involved in color art reproduction. Color art can be purchased for online only reproduction or for
print + online reproduction. Color reprints can only be ordered if print + online reproduction costs are paid. Rates
for color art reproduction are: Online Only Reproduction: $225 for the first page of color; $100 per page for the next
three pages of color. A maximum charge of $525 applies. Print + Online Reproduction: $900 for the first page of
color; $450 per page for the next three pages of color. A custom quote will be provided for articles with more than
four pages of color.
Tables and Figures. Tables and figures (illustrations) should not be embedded in the text, but should be included as
separated sheets or files. A short descriptive title should appear above each table with a clear legend and any
footnotes suitably identified below. All units must be included. Figures should be completely labeled, taking into
account necessary size reduction. Captions should be typed, double-spaced, on a separate sheet.
Proofs. Page proofs are sent to the designated author using IMDA Press's Article Tracking System (ATS). They
must be carefully checked and returned within 48 hours of receipt.
Reprints and Issues. Reprints of individual articles are available for order at the time authors review page proofs. A
discount on reprint is available to authors who order before print publication. Each contributing author will receive 1
complete issue in which the article publishes and a complimentary PDF. The file is for personal use only and may
not be copied and disseminated in any form without prior written permission from IMDA Press.

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