Purpose This paper aims to investigate the impact of brand equity (BE) on stock performance (i.e. stock return, volatility and beta), and compare the performance of a high brand equity stocks (HBES) portfolio with that of the overall market during market downturn, market upturn and total disturbance periods of the COVID-19 pandemic in 2020. Design/methodology/approach Stock performance data and brand valuation estimates are obtained from various sources to assemble a portfolio of HBES and conduct the analyses. Econometric models are estimated to examine the impact of BE on stock performance and compare the HBES portfolio performance versus the overall market. Findings BE was positively associated with stock return and negatively associated with both types of risk (volatility and beta) during the COVID-19 pandemic. Specifically, during the market downturn period, BE was positively related to stock return and negatively related to stock volatility; during the market upturn period, BE was negatively associated with both types of risk; and during the total disturbance period, BE was positively associated with stock return and negatively associated with both types of risk. Finally, the HBES portfolio outperformed the market (S&P 500 index). Research limitations/implications The findings advance the extant research by providing evidence pertaining to brands' role in mitigating the impact of unpredictable market shocks and crises, such as the COVID-19 pandemic, on stock performance. While brands are mostly viewed as drivers of sustained competitive advantage and profitability, their protective role in crisis times is noteworthy. Practical implications The research findings potentially help marketing and brand managers to justify marketing spending and craft their strategies to enhance firm performance during crises similar to COVID-19. Originality/value The marketing–finance interface can benefit from insights offered by the COVID-19 pandemic, as such crises are becoming prevalent and are capable of damaging various stakeholders' outcomes (firms, investors and customers). The empirical examination is separately conducted on the market downturn, market upturn and total disturbance period attributable to the COVID-19 pandemic.
Frontline employees (FLEs) often face customer incivility—rude or demeaning remarks, verbal aggression, or hostile gestures. Although incivility from customers is rising at an alarming rate, most organizations refuse to act decisively to protect their FLEs and stop customer incivility. This research asserts that an organizational policy of ignoring and accepting incivility from customers is neither a wise business strategy nor has positive outcomes. In contrast, customer incivility should be handled promptly and decisively. Specifically, the authors present FLE Constructive Resistance (FLE CR) as a strategy to confront customer incivility. The authors conduct interviews with FLEs, develop a Constructive Resistance (CR) scale to fit the context of FLE–customer encounters, and test a conceptual model to examine the impact of CR by FLEs. The results suggest that customers who observe incivility perpetrated by fellow customers respond positively to FLE CR, including greater future purchase intention, greater positive word-of-mouth intention, and reduced future misbehavior intention. These effects are mediated by the observer’s perceived fairness of the FLE’s CR. Finally, the indirect effects of FLE’s CR on observer outcomes are more likely to manifest in customers with higher moral identity as well as newer customers.
Purpose The purpose of this study is to empirically investigate the impact of incumbents’ defensive strategies, specifically price-cut and capacity expansion, on new entrants’ (NEs) exit decisions and examine the moderating role of incumbents’ relational market-based assets (RMBAs). Design/methodology/approach Drawing upon real options theory, an empirical study using logistic regression is conducted on a rich, multi-market data set of NE exits between 1997 and 2019 in the U.S. airline industry. Findings Contrary to intuitive expectation, the results show that cutting prices in response to entry reduces NEs’ likelihood of market exit. However, when incumbents possess strong RMBAs, using a price cut proves to be effective in pushing NEs out of a market. Moreover, an NEs’ exit likelihood is higher when incumbents expand capacities in response to entry. Research limitations/implications In this study, market exit is defined as a complete withdrawal from the market and operationalized as a binary variable. Future research could examine different degrees of downscaling by NEs while remaining in the market. Practical implications This research demonstrates the opposing effects of price-cut and capacity expansion and the crucial role of RMBAs and advises managers to be cautious and consider trade-offs when implementing their defensive strategies to push NEs out of their markets. Originality/value This study contributes to the literature by examining the impact of incumbents’ defensive strategies, price-cut and capacity expansion, side by side and exploring the moderating role of RMBAs. Extant research has focused on antecedents of defensive strategies, whereas the consequences are the focus of this research.
[ACCESS RESTRICTED TO THE UNIVERSITY OF MISSOURI AT REQUEST OF AUTHOR.] Apparel and fashion retail buyers are responsible for selecting and ordering products, on behalf of the retailer, to be sold to retailers' end-consumers. Compared to their counterparts in other retailing sectors, fashion buyers face unique challenges such as high demand uncertainty and volatility, seasonality, frequent changes in fashion trends, and short product life cycles. As previous trends rarely provide useful information for predicting future sales of trendy products, fashion buyers make a subjective assessment of products' future demand by relying on their intuition and perceived expertise. Industry reports show that fashion buyers' predictions are often far from the demand that is later realized causing loss of profits for retailers. In this dissertation. I argue that retailers can benefit from the Wisdom of the Crowd (WOC) in predicting future sales of fashion products. It is suggested that lay customers as a group can provide more accurate prediction of future demand of fashion products than individual fashion buyers. An empirical study is conducted to test this proposition involving two groups: professional fashion buyers (N=60) and lay customers (N=397). Customers predicted future sales of products in all six product categories that were used in the study. The prediction error, measured by MAPE, was reduced between 12 and 73 percent. The implication of these findings for retailers are discussed, and directions for implementing crowdsourcing in fashion buying to improve prediction accuracy are provided.
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