Signaling effects and the role of culture: movies in international auxiliary channels

Abstract

Given the high uncertainty in the quality perception of experiential products, manufacturers use signals to influence consumers' decisions. In the movie industry, literature shows that performance of the main channel (e.g., cinema) strongly influences the performance of auxiliary channels (e.g., DVDs). The success of a movie in the home country is also to be resonated by its good performance in host countries. However, the cultural contingency of these success-breeds-success (SBS) effects has not been examined. Our research tests the influence of cultural values on the SBS effects across channels and countries. Borrowing concepts from the signaling literature and analyzing DVD sales data from six international markets using a multilevel mixed-effect model, we find that culture plays significant roles to influence both SBS effects. In countries with high power distance high long-term orientation and low indulgence consumers who purchase from auxiliary channels are less likely to be influenced by the box office performance of movies.Meanwhile, cultural distance between the home and host nations significantly decreases the cross-national SBS effect. This paper contributes to the existing literature by investigating the international auxiliary channels of movies and incorporating cultural values into the framework of sequential distributions. This study is the first one to test the links between the main and auxiliary channels from an international marketing perspective. Our research suggests that the SBS effects may vary across nations. When managers plan for the sequential distributions of experiential products, the cultural values of target markets should be considered to decrease the uncertainty in sales prediction.

Signaling theory and its relevance in international marketing: a systematic review and future research agenda

“…National cultural contingency has an impact on success-breeds-success taking the example of visual entertainment, the performance of the main channel (cinema) has a strong influence on the performance of auxiliary channels (DVDs). Sinha et al (2019) collected data from six different countries; Australia, Japan, Germany, the UK, the USA, and France. The study concludes that in countries with low power distance, short-term orientation, and high IMR 41,2 indulgence, consumers who purchase from auxiliary channels are more likely to be influenced by the box office performance of movies.…”

“…The study concludes that in countries with low power distance, short-term orientation, and high IMR 41,2 indulgence, consumers who purchase from auxiliary channels are more likely to be influenced by the box office performance of movies. Meanwhile, the cultural distance between the home and host nations significantly decreases the cross-national success-breeds-success effect (Sinha et al, 2019). Also, success of box of office movies is yet another context that has been studied along with national culture.…”

“…However, marketers can use positive product attributes as signals to form favorable consumer product evaluations. Additionally, signaling theory helps to effectively communicate favorable product signals across cultural boundaries (Akdeniz and Talay, 2013;Sinha et al, 2019;Grow et al, 2012;Swoboda and Hirschmann, 2017;Swoboda and Batton, 2020). These signals will help consumers to shape their willingness to purchase.…”

“…National cultural contingency has an impact on success-breeds-success taking the example of visual entertainment, the performance of the main channel (cinema) has a strong influence on the performance of auxiliary channels (DVDs). Sinha et al. (2019) collected data from six different countries; Australia, Japan, Germany, the UK, the USA, and France.…”

National customer orientation: a framework, propositions and agenda for future research

“…Crossnational marketing strategy research has focused on, among other topics, standardization versus adaption to new country markets (Venaik and Midgley, 2019), innovation (Mooi et al, 2020) and managerial use of information (Mintz et al, 2021). Further, cross-national international marketing and IB research has also investigated various cross-national differences in consumer behavior topics such as trust (Steenkamp and Geyskens, 2006), National customer orientation country-of-origin brand imaging (Crouch et al, 2021), culture and cultural distance (Sinha et al, 2019) and the importance of social networking (Krishen et al, 2019). In addition, the IB literature focuses on potentially marketing-related topics such as the importance of foreign investments (Hu et al, 2021), mergers and acquisitions (Zhou et al, 2016) and research and development strategies (Wang et al, 2020).…”