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The authors develop a three-stage framework for strategic marketing planning, incorporating multiple artificial intelligence (AI) benefits: mechanical AI for automating repetitive marketing functions and activities, thinking AI for processing data to arrive at decisions, and feeling AI for analyzing interactions and human emotions. This framework lays out the ways that AI can be used for marketing research, strategy (segmentation, targeting, and positioning, STP), and actions. At the marketing research stage, mechanical AI can be used for data collection, thinking AI for market analysis, and feeling AI for customer understanding. At the marketing strategy (STP) stage, mechanical AI can be used for segmentation (segment recognition), thinking AI for targeting (segment recommendation), and feeling AI for positioning (segment resonance). At the marketing action stage, mechanical AI can be used for standardization, thinking AI for personalization, and feeling AI for relationalization. We apply this framework to various areas of marketing, organized by marketing 4Ps/4Cs, to illustrate the strategic use of AI.

Service brands are increasingly dominating the economy. However, there is limited knowledge about how to grow service brands, and whether growing service brands will require strategies different from the strategies that are based on goods brand research. To address this knowledge gap, this paper conceptualizes a “ServBrand triad” based on the service literature, and empirically demonstrates how its three drivers are related to service brand growth. Service brand growth is defined as positive changes in brand outcomes, such as the brand being liked more, used more, or more profitable or valuable to a firm. The empirical work utilizes 11 years of longitudinal brand and firm data that are analyzed by dynamic multivariate generalized method of moments (GMM) panel models. The findings confirm the importance of the three drivers of service brand growth: quality, personalization, and relationships. Service marketers are advised to emphasize relationship-based service personalization (as opposed to quality-based personalization), maintain consistent service quality “at” customer expectation, neither above nor below, throughout the relationship, and improve service quality gradually (or subtly) to avoid quality-cost tradeoff and quality inconsistency perceptions. These findings contribute to an improved understanding of the factors that drive service brand growth, and how those factors differ from the factors that drive goods brand growth.

Customer satisfaction contributes to firm financial performance, but does it contribute to top executives' pay? Our empirical evidence shows that it may not. Customer-satisfying executives tend to have lower pay than their productive peers, even if both satisfaction and productivity contribute to firm financial performance. Thus, customer satisfaction is underappreciated, which may result in both less societal welfare and worse company performance. We propose a board myopia mechanism to account for this phenomenon. In facing short-term financial performance pressure from investors, and the asymmetric information availability between accounting-based and market-based assets for compensation decisions, the board of directors may be myopic, underappreciating executives who invest in market-based assets such as customer satisfaction that drive long-term returns. We examine this satisfaction underappreciation phenomenon empirically using 23 years of panel data that detail firm productivity, customer satisfaction, firm financial performance, and executive compensation. The longitudinal data are analyzed using fixed-effect panel models and a simultaneous system of panel vector autoregression equations with interactions to assess the direct effect of firm financial performance and its carryover effect to executive compensation across executives who are productive, customer-satisfying, or both. The results confirm that customer-satisfying executives are underappreciated: being productive is financially rewarding for both firms and executives, while being customer-satisfying is financially rewarding for firms but not as much for executives. We further demonstrate that using total shareholder returns to benchmark firm financial performance and reward executives with a higher proportion of stock compensation can encourage a long-term focus that alleviates this customer underappreciation.

Advancements in technology are radically transforming service, and increasingly providing the underlying basis for service strategy. In this paper, we develop a typology and positioning map for service strategy, in the context of rapid technological change, and outline the process for firms to position or reposition their service strategies. Which strategy to choose is based on the degree to which customer demand is heterogeneous, and the degree to which potential customer lifetime value varies across customers. This results in four strategies: the McService strategy that is standardized and transactional, the Relational Service strategy that is standardized and relational, the Customized Transaction strategy that is personalized and transactional, and the Adaptive Personalization strategy that is personalized and relational. We provide firms a roadmap for identifying a “sweet spot” strategy in relation to a segment’s realized or potential customer lifetime value, combined with the firm’s technological capabilities. Because technological capabilities inevitably advance, firms will tend to move from standardized to personalized and from transactional to relational over time, implying that firms should be alert to technological opportunities to personalize their relationships with customers. Our strategic framework also produces a useful bridge from marketing practice to the conceptual evolution of the service literature, showing how the historical trends toward continuing customer relationships and co-productive personalization should drive strategic thinking in service.

Smart technologies are rapidly transforming frontline employee-customer interactions. However, little academic research has tackled urgent, relevant questions regarding such technology-empowered frontline interactions. The current study conceptualizes (1) smart technology use in frontline employee-customer interactions, (2) smart technology–mediated learning mechanisms that elevate service effectiveness and efficiency performance to empower frontline interactions, and (3) stakeholder interaction goals as antecedents of smart technology–mediated learning. We propose that emerging smart technologies, which can substitute for or complement frontline employees’ (FLEs) efforts to deliver customized service over time, may help resolve the long-standing tension between service efficiency and effectiveness because they can learn or enable learning from and across customers, FLEs, and interactions. Drawing from pragmatic and deliberate learning theories, the authors conceptualize stakeholder learning mechanisms that mediate the effects of frontline interaction goals on FLEs’ and customers’ effectiveness and efficiency outcomes. This study concludes with implications for research and practice.

Purpose: In this article, we introduce the concept of Value Fusion to describe how value can emerge from the use of mobile, networked technology by consumers, firms, and entities such as non-consumers, a firm’s competitors, and others simultaneously.Design/methodology/approach: We discuss the combination of characteristics of mobile devices that enable Value Fusion. We discuss specific value and benefits to consumers and firms of being mobile and networked. We introduce and define Value Fusion and set it apart from related, other conceptualizations of value. We provide examples of Value Fusion and discuss the necessary conditions for Value Fusion to occur. We discuss under which conditions the use of mobile, networked technology by consumers and firms may lead to Value Confusion instead of Value Fusion. We end with several research questions, proposed to further enhance the understanding and management of Value Fusion.Findings: The combination of portable, personal, networked, textual/visual and converged characteristics of mobile devices enables firms and consumers to interact and communicate, produce and consume benefits, and create value in new ways that have not been captured by popular conceptualizations of value. These traditional conceptualizations include customer value, experiential value, customer lifetime value, and customer engagement value. Value Fusion is defined as value that can be achieved for the entire network of consumers and firms simultaneously, just by being on the mobile network. Value Fusion results from producers and consumers (i) individually or collectively, (ii) actively and passively, (iii) concurrently, (iv) interactively or in aggregation contributing to a mobile network (v) in real time and (vi) just-in-time.Implications: Mobile devices have revolutionized the way we live, and there is widespread expectation that they will have “game- changing” implications for marketing in the near future (MSI, 2012). Therefore, research is needed to help us understand how mobile technologies are likely to change conventional wisdom about how customers and firms connect, interact and do business, and finally culminate in mutual, synergetic value; a phenomenon which we label Value Fusion.Originality: This paper synthesizes insights from the extant value literature that by and large has focused on either the customer’s or the firm’s perspective, but rarely blended the two. The contribution of this paper is that the Value Fusion concept achieves such a blending in the distinct context of mobile technologies and social media. Value should be considered more holistically, and value to the consumer and firm should be jointly optimized (i.e., Value Fusion) rather than managed in isolation. In addition, both active and passive participation should be valued. This paper calls for a more holistic approach to conceptualize value and identifies unanswered questions about value in the distinct context of mobile technology and social media.

A typical firm is operated by multiple functional managers who may collaborate as well as compete to achieve firm performance. In the digital age, firm performance is essentially customer-dependent and technology-dependent, with both marketing and information technology (IT) playing key roles. Unfortunately the two functions often have very different worldviews. We show how these differences can damage firm performance, and suggest ways to mitigate this damage. We build a worldview difference model, synthesized from multiple disciplines. The model is tested using both matched and nonmatched observations from marketing and IT managers, and is analyzed with hierarchical linear models using both perceptual and objective firm performance data over a 4-year period. We find that differences between the beliefs and perceptions of marketing managers and IT managers generate a negative impact on firm performance, and suggest appropriate technology-culture associations to effectively align their worldviews for firm performance. To improve firm performance, a cross-functional appreciation for market and technology drivers can be achieved by making marketing managers more learning-oriented and by providing IT managers a culture that is congruent with technology.

Flow, a construct borrowed from reference disciplines, has been proposed as the central process in Web navigation. However, when flow is applied directly to the context of marketing, it suffers from conceptual ambiguity and overlap with the popular marketing construct, involvement. The present study aims to provide a clear framework within which to delineate the relationship between flow and involvement, and thus develop a better theoretical basis that incorporates the flow construct into Internet marketing. This study first distinguishes explicitly between flow, enduring involvement, and situational involvement. It then operationalizes these constructs with the use of customary measures to disclose their unique and common characteristics. Finally, a second-order confirmatory factor analysis allowing measurement errors is used to identify explicitly the tripartite relationship between the three constructs. The conceptual and operational implications are discussed. © 2006 Wiley Periodicals, Inc.

The nature of marketing science is changing in a systematic, predictable, and irrevocable way. As information technology enables ubiquitous customer communication and big customer data, the fundamental nature of the firm's connection to the customer changes: better, more personalized service can be offered, from which service relationships are deepened, and consequently, more profitable customers grow the influence of service within the goods sector and expand the service sector in the economy. Marketing is becoming more personalized, and marketing science techniques that exploit customer heterogeneity are becoming more important. Information technology improvements also guarantee the increasing importance and usage of computationally intensive data processing and “big data.” Most importantly, these trends have already lasted for more than a century, and they will become even more pronounced in the coming years as a result of the monotonic nature of technology improvement. These changes imply a transformation of marketing science in both the topics to be emphasized and the methods to be employed. Increasingly, and inevitably, all of marketing will come to resemble to a greater degree the formerly specialized area of service marketing, only with an increased emphasis on marketing analytics.

To determine whether a theory of emotions in marketing is needed, this article assesses the current theoretical status of emotions in marketing. The theoretical propositions and the characteristics of four major theories of emotions borrowed from psychology, as well as five marketing accounts for emotions are reviewed. The characteristics of emotions in marketing are specified and compared with the characteristics of emotions as seen by psychology. The article ends with four theoretical proposals on directions for future development of a theory of emotions in marketing.

This article documents an effort to experimentally examine the effects of information characteristics of Web shopping sites on consumers' desire to approach the sites. A field experiment was conducted in which respondents visited shopping sites characterized by varying levels of information load. Two dimensions of information load, complexity and novelty were identified and were found to have differential effects on the desire to approach shopping sites. The novelty dimension kept consumers exploring the shopping sites, whereas the complexity dimension has the potential to induce impulse purchases. Managers are advised to design their virtual shopping environments in line with their marketing objectives. Novelty is the key to successfully shaping attitudes, delivering content and soliciting responses, whereas complexity encourages on-line transactions. Future research directions for information academicians are suggested to formulate alternative models for on-line exploration behavior and to develop better measures for on-line informational environments.

Employing a survival analysis approach, this study synthesizes 3 aspects of gift literature and suggests their effects on the timing of dissolution for a romantic relationship. Products or services can be consumed for the purpose of enhancing self-attractiveness (self-gift), expressing love to partners (other-gift), and announcing a relationship to the outer world (joint-gift). Results indicate that the distribution of time until dissolution for young students’ romantic relationships is more likely to first fall and then rise. Gifts can delay the timing of dissolution, but not the probability of its final destination. For female students, self-enhancing gifts are found to delay the timing; for male students, love-expressive gifts speed up the timing; and for both male and female students, relationship-announcing gifts delay the timing of dissolution. Consumers, thus, are advised to use gifts to make their relationships endure, but not to attempt to alter a poor relationship into a successful one.

Why do some consumers stick with a certain brand(s), whereas others are prone to switch? This study proposes, and empirically examines, the hypothesis that the structure of the evoked set is the nonconscious memory representation of consumers' repeat purchase behavior. Two causes of repeat purchase are identified: Brand loyalty, which is inherent to consumers and is constant over time, and inertia, which fluctuates with marketing variables. A model selection procedure is performed to compare the relative efficiency of using multinomial and binary logit models to examine the theoretical accuracy of the hypotheses. Findings suggest a U-shaped relation: Consumers who hold moderately intercorrelated evoked sets are intrinsically brand loyal, but are susceptible to the impact of marketing variables. They are intrinsically prone to switch, but less open to marketing variables, when their evoked sets are high or low in intercorrelation. The findings contribute to the understanding of both conscious and nonconscious aspects of repeat purchase patterns. © 1999 John Wiley & Sons, Inc.

This study proposes, and empirically examines a new typology of emotional global appeals in terms of consumers' similarity of response. Each basic emotion possesses an evolutionary survival value, is associated with a different pattern of autonomic nervous system activity and facial expression, and is acquired early in the socialisation process. Basic emotions are universal in all demographic groups. Alternatively, social emotions are the blends of basic emotions. They are culturally specific because they are the social reactions that are acquired later in the socialisation process. Six Benetton ads were used to generate three pairs in the basic-social emotional hierarchy: happiness versus humour, love versus warmth, and sadness versus surprise. Two hundred and forty-seven male and female undergraduate consumers from the US, UK, Taiwan, and mainland China served as the subjects. Ads that employ basic emotions (happiness, love, and sadness) are found to generate more similar emotional responses among globa...

This study examines a new typology of emotional appeals in terms of consumers' similarity of response. Basic emotions are universal due to their being instinctual biological reactions shared by all human beings. Alternatively, social emotions are culturally specific because they are the social reactions acquired at a later stage of human development. Basic emotional appeals are found to generate more similar emotional and evaluative responses in consumers compared to social emotional appeals. Thus, this study suggests that basic emotions can be used to capitalize on the similarity, while social emotions can be used to capitalize on the uniqueness, among consumers.

More than one type of negative affect is experienced by a consumer exposed to an ad. Some types of the affect are persuasive; others are dissuasive. The present study, motivated by these observations, explores the internal relations of negative affect. Three functional forms are derived from two competing theoretical views and their measurements of negative affect. The superiority of the three forms is examined in terms of their parsimony and precision of estimation for the variances in consumers' attitudes toward ads. Results suggest that in predicting the persuasiveness of negatively affective ads, researchers need to consider the specific nature of the different types of negative affect and their directions of persuasiveness. More controlled and more effective negative-affect-inducing executions will then be made possible. © 1997 John Wiley & Sons, Inc.

Information technology (IT)-related service is the strategic management of the creation and delivery of service in which information and communication technology (referred to as IT here) plays a substantial role. IT can serve as a facilitator (e.g., facilitates access to customer information and customer communication) or enabler (e.g., enables value cocreation), serves as the context (e.g., mobile phone market or e-commerce), or is itself service (e.g., social networking sites or information goods). There are three essential characteristics of IT-related service—it is information-intensive, customer-centric, and multidisciplinary. IT-related service is information-intensive. The ability to communicate (firm-to-customer, firm-to-firm, and customer-to-customer) anytime, anywhere, and to anyone, is significantly facilitated by the recent technology trends of big data, cloud computing, and mobile and networking platforms. IT-related service is customer-centric. The use of IT, both by firms and by customers, alleviates the common observation that there is a trade-off between customer satisfaction and productivity improvement for service. Customers are able to talk back to firms with their new communication power and firms are better able to cost-efficiently satisfy their customers. The study of IT-related service is thus inherently multidisciplinary involving such fields as marketing, strategic management, computer science/information systems, and operations management/organizational research. The results of the IT-service transformation are that IT blurs the distinction between goods and service; service is becoming more goods-like and goods are acquiring the characteristics of service. The Journal of Service Research special issue on IT-related service brings together all of these elements, and provides rich strategic implications for managers.

To increase service productivity, many companies utilize automation extensively to reduce the use of labor. However, greater use of automation does not always result in higher service quality, and the effectiveness of automation in providing service hinges on how advanced the technology level is. Departing from the standard perspective in which productivity is simply treated as an output measure of firm performance, the authors propose service productivity as a strategic decision variable; that is, the firm manages the service productivity level to maximize profits. They develop a theory of optimal service productivity that explains when the optimal productivity level will be higher or lower and distinguishes between short-term effects of service productivity due to labor–automation trade-offs and long-term effects due to the advance of technology. The theory, together with the existing literature, inspires the development of three testable empirical hypotheses, which are confirmed using data from more than 700 service companies in two time periods. The research shows that service productivity should be lower when factors (e.g., higher profit margin, higher price) motivate the provision of better service quality and that service productivity should be higher when factors (e.g., higher market concentration, higher wages) discourage the provision of better service quality. The empirical results also provide preliminary evidence that large service companies may tend to be too productive relative to the optimal level and, if so, should place less emphasis (in the short run) on cost reduction through automation and more emphasis on service quality.

We consider the implications of the three pillars of sustainability (environment, economy and social justice) on consumption in a wealthy country. Building a theoretical model that includes consumers, business, government, the environment, and economic and political relations between nations, we explore how sustainability should affect the consumption behavior of consumers, charitable aid to poorer countries, and responsible environmental practices by businesses. Our model enables us to provide normative implications for consumers, society and business. Importantly, we assume that all stakeholders will optimize their self-interest, and that altruism will only partly explain behavior consistent with sustainability. Among the more non-obvious findings are that (1) the poorer the poor countries are, the less the rich countries should consume, (2) the more sensitive the global political climate is to economic inequity between the rich and poor nations, the less the rich countries should consume, and (3) if aid to poor countries is effective enough, then the more materialistic the society is, the more charitable aid it should give. We also confirm a number of more intuitive findings, such as that business should use more green technology as the taxes on pollution and/or efficiency of green technology increase, and the more resource-intensive consumption is, the less consumers should consume. Taken as a whole, the findings imply that societal consumption patterns should be sensitive to aspects of environmental impact and social justice, even if altruistic motivations are absent.