Dacko S.G. The Advanced Dictionary of Marketing Putting Theory to Use
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boomerang effect 60
boomerang effect
DESCRIPTION
A hypothesis or theoretical effect of persuasive communications where the
end result is an attitude change by individuals in the direction opposite to that
intended.
KEY INSIGHTS
When an individual views a particular form of persuasive communica-
tion as being highly discrepant from his/her original attitude, there is
the possibility, consistent with assimilation–contrast theory, that such
a discrepancy may lead the individual to change his/her attitude in the
direction opposite to that intended by the message (see assimilation–
contrast theory).
KEY WORDS Persuasion, communication, attitudes
IMPLICATIONS
While the boomerang effect may be a valid concern among marketers
using persuasive communications, there is limited evidence that the
effect occurs in practice. The area most concerned about its presence is
social marketing, where marketers seek to persuade individuals in society
that certain behaviors are bad (e.g. underage drinking) but are concerned
that communications will have the opposite effect of that intended.
APPLICATION AREAS AND FURTHER READINGS
Social Marketing
Ringold, Debra Jones (2002). ‘Boomerang Effects in Response to Public Health Inter-
ventions: Some Unintended Consequences in the Alcoholic Beverage Market,’
Journal of Consumer Policy, 25(1), March, 27–63.
Kozup, John, Burton, Scot, and Creyer, Elizabeth (2001). ‘A Comparison of Drinkers’
and Nondrinkers’ Responses to Health-Related Information Presented on Wine
Beverage Labels,’ Journal of Consumer Policy, 24(2), June, 209–230.
Marketing Communication
Bither, Stewart W., Dolich, Ira J., and Nell, Elaine B. (1971). ‘The Application of
Attitude Immunization Techniques in Marketing,’ Journal of Marketing Research,
8(1), February, 56–61.
BIBLIOGRAPHY
MacKinnon, David P., and Lapin, Angela (1998). ‘Effects of Alcohol Warnings and
Advertisements: A Test of the Boomerang Hypothesis,’ Psychology and Marketing,
15(7), 707–726.
Boston Consulting Group matrix (or Boston matrix) see product
portfolio analysis
bottom-up marketing
DESCRIPTION
The process of developing a marketing strategy within an organization by
finding a workable tactic and then building on the tactic to create a powerful
strategy.
61 bottom-up marketing
KEY INSIGHTS
Conceptually developed by Ries and Trout (1989) in a popular book by
the same name, bottom-up marketing is advocated by the authors as an
alternative to traditional top-down marketing which involves deciding
what the firm wants to do (i.e. strategy) and then figuring out how to
do it (i.e. tactics) (see top-down marketing). In support of the approach,
the authors provide examples of organizations such as Federal Express,
Microsoft, and Little Caesars whose success is explained, according to
the author’s research, by a bottom-up marketing approach. An example
of a tactic used by Domino’s Pizza in the creation of its strategy is
‘home delivery in 30 minutes, guaranteed.’ In further conceptualizing the
approach, the authors consider tactics to be ‘competitive mental angles’
and strategies as ‘coherent marketing directions.’
KEY WORDS Tactic(s), strategy development
IMPLICATIONS
Marketers involved in a firm’s marketing strategy development should
recognize the potential for a bottom-up approach to provide the firm with
insights into ways the firm can develop and achieve a sustainable com-
petitive advantage that may not be as evident with a top-down marketing
strategy development approach. While there are multiple approaches to
developing marketing strategies within an organization and arguably no
single best prescriptive approach, the bottom-up approach is certainly
consistent with the view that marketers should seek to understand
current and prospective customers, competitors, as well as the broader
marketing environment and identify ways it can provide customers with
offerings of value that are superior in some way relative to competi-
tive offerings. The approach further suggests the need for marketers to
focus their efforts in identifying and meeting customer needs to avoid
diluting organizational resources which may include the firm’s brand
itself.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
McDonald, M. (1992). ‘Strategic Marketing Planning: A State-of-the-Art Review,’
Marketing Intelligence & Planning, 10(4), 4–22.
Online Marketing
Wood, C. (2003). ‘Marketing and E-commerce as Tools of Development in the
Asia-Pacific Region: A Dual Path,’ International Marketing Review, 21(3), 301–
320.
International Marketing
Prendergast, Gerard, West, Douglas, and Shi, Yi-Zheng (2006). ‘Advertising Bud-
geting Methods and Processes in China,’ Journal of Advertising, 35(3), Fall, 165–
176.
BIBLIOGRAPHY
Ries, A., and Trout, Jack (1989). Bottom-Up Marketing. New York: McGraw-Hill.
boundary spanning 62
boundary spanning
DESCRIPTION
Effort within an organization that involves activity aimed at bridging one or
more recognized organizational boundaries to facilitate the flow of informa-
tion across such boundaries.
KEY INSIGHTS
Boundary spanning within an organization seeks to facilitate information
transfer, frequently but not limited to information from outside the orga-
nization to inside the organization. The aim of such activity is to enhance
communication and strategic decision-making effectiveness within the
firm as a result of employees and managers being able to access and draw
upon cross-boundary information that is both relevant and increasingly
timely.
KEY WORDS Information transfer, organizational communication
IMPLICATIONS
Marketing managers and strategists should seek to recognize the benefits
of organizational boundary spanning activity as a means of supporting
effective strategic decision making. Given that such activity relies criti-
cally on the actions of key individuals who are routinely in a position to
access information across organization boundaries, marketing managers
should seek to ensure that systems and processes are in place to encour-
age and support sustained boundary spanning activity that frequently
begins with information access by such individuals.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Dollinger, Marc J. (1984). ‘Environmental Boundary Spanning and Information
Processing Effects on Organizational Performance,’ Academy of Management Jour-
nal, 27(2), June, 351–368.
Marketing Management
Tushman, Michael L., and Scanlan, Thomas J. (1981). ‘Boundary Spanning Indi-
viduals: Their Role in Information Transfer and their Antecedents,’ Academy of
Management Journal, 24(2), June, 289–305.
Singh, Jagdip (1998). ‘Striking a Balance in Boundary-Spanning Positions: An Inves-
tigation of some Unconventional Influences of Role Stressors and Job Charac-
teristics on Job Outcomes of Salespeople,’ Journal of Marketing , 62(3), July, 69–
86.
Services Marketing
Singh, Jagdip, Goolsby, Jerry R., and Rhoads, Gary K. (1994). ‘Behavioral and
Psychological Consequences of Boundary Spanning Burnout for Customer
Service Representatives,’ Journal of Marketing Research, 31(4), November, 558–
569.
BIBLIOGRAPHY
Rosenkopf, L., and Nerkar, A. (2001). ‘Beyond Local Search: Boundary-Spanning,
Exploration, and Impact in the Optical Disc Industry,’ Strategic Management Jour-
nal, 22(4), 287–306.
63 bounded rationality
bounded rationality
DESCRIPTION
Partial rationality in individual decision-making behavior as a result of it
being bounded by the limitations of individuals in their ability to handle the
complexities of information available to them as well as limitations in the
availability of information to such individuals.
KEY INSIGHTS
The concept of bounded rationality in relation to decision making sug-
gests that individuals do not employ optimal decision-making approaches
as a result of human limitations in the ability to comprehend and manage
complex information as well as a result of challenges associated with
limitations in information availability. Rather, the concept suggests that
individuals adopt approaches that are more limited and which rely upon
heuristics to ultimately make the decision-making process manageable,
which includes the process of generating and evaluating alternatives for
possible action.
KEY WORDS Decision making, information complexity
IMPLICATIONS
The concept of bounded rationality is far-reaching and is of influence
in marketing decision making as much as consumer decision making.
Recognizing the sub-optimality of much marketing decision making in
marketing, marketers may therefore benefit from examining more crit-
ically the decision-making processes in use by the firm with the aim
of understanding better the benefits and limitations involved. Similarly,
marketers must strive to understand better how and to what extent
consumer decision making is also characterized by bounded rationality in
decision-making processes involved in their evaluations and, potentially,
adoption of the firm’s products or services.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Taylor, Ronald N. (1976). ‘Psychological Determinants of Bounded Rationality:
Implications for Decision-Making Strategies,’ Decision Sciences, 6, 409–429.
International Marketing
Shoham, A. (1999). ‘Bounded Rationality, Planning, Standardization of Interna-
tional Strategy, and Export Performance: A Structural Model Examination,’ Jour-
nal of International Marketing, 7(2), 24–50.
Marketing Modeling
Munier, B., Selten, R., Bouyssou, D., Bourgine, P., Day, R., Harvey, N., Hilton, D.,
Machina, M., Parker, P., and Sterman, J. (1999). ‘Bounded Rationality Modeling,’
Report—Marketing Science Institute Cambridge Massachusetts, 121, 21–24.
Consumer Behavior
Dyner, I., and Franco, C. J. (2004). ‘Consumers’ Bounded Rationality: The Case of
Competitive Energy Markets,’ Systems Research and Behavioral Science, 21(4), 373–
390.
BIBLIOGRAPHY
Gigerenzer, G., and Goldstein, D. G. (1996). ‘Reasoning the Fast and Frugal Way:
Models of Bounded Rationality,’ Psychological Review (New York), 103(4), 650–669.
brand community 64
Camerer, C. (1998). ‘Bounded Rationality in Individual Decision Making,’ Experimen-
tal Economics, 1(2), 163–183.
Gigerenzer, G., and Selten, R. (2002). Bounded Rationality. Cambridge, Mass.: MIT
Press.
Simon, Herbert A. (1957). ‘A Behavioral Model of Rational Choice,’ in Herbert A.
Simon (ed.), Models of Man: Social and Rational. New York: Wiley: 241–61.
brand community
DESCRIPTION
The sense of community developed, shared, and practiced by individuals using
or having a common interest in a particular brand.
KEY INSIGHTS
The nature of some branded products and services has led to a following
among certain consumers to the point where such individuals feel part
of an active community of advocates or users of the brands. Harley-
Davidson motorcycles, Saab automobiles, and Tide laundry detergent are
just a few examples of branded products that have developed followings
of users who are involved with the branded products to such a strong
extent that they actively participate in discussions of the brands and
their developments, whether via the internet or in person through clubs
or associations.
KEY WORDS Community behavior
IMPLICATIONS
Marketers interested in developing a strong community (or community-
like) following of consumers of the firm’s brand(s) may benefit from
understanding better the drivers and consequences of brand community-
related research. In particular, recognizing the scope of consumer behav-
iors associated with brand communities can provide the marketer with
insights into how and why particular marketing strategies may or may
not be effective for brand community development.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
McAlexander, James H., Schouten, John W., and Koenig, Harold F. (2002). ‘Building
Brand Community,’ Journal of Marketing, 66(1), January, 38–54.
McAlexander, J. H., Kim, S. K., and Roberts, S. D. (2003). ‘Loyalty: The Influences
of Satisfaction and Brand Community Integration,’ Journal of Marketing Theory and
Practice, 11(4), 1–11.
Consumer Behavior
Muniz, Albert M., Jr. and Schau, Hope Jensen (2005). ‘Religiosity in the Abandoned
Apple Newton Brand Community,’ Journal of Consumer Research, 31, March, 737–
747.
Algesheimer, R., Dholakia, U. M., and Herrmann, A. (2005). ‘The Social Influence
of Brand Community: Evidence from European Car Clubs,’ Journal of Marketing,
69(3), 19–34.
BIBLIOGRAPHY
Muniz, Albert M., Jr., and O’Guinn, Thomas C. (2000). ‘Brand Community,’ Journal
of Consumer Research, 27, 412–432.
65 brand loyalty
brand equity
DESCRIPTION
The marketing and financial value that is built up and associated with a brand.
KEY INSIGHTS
The concept of brand equity captures the notion that marketing actions
can lead to brands possessing equity in the sense that they become
valuable strategic assets of a firm. Positive brand equity enables the firm
to expect future revenues that are higher than that for an identical
non-branded product as a result of the brand’s positive influence on
consumer purchase behavior. For example, a brand’s association with
perceived high quality can lead to trust and confidence in the firm’s
branded products that can increase product purchase likelihood among
consumers.
KEY WORDS Brand value
IMPLICATIONS
Marketers should seek to understand and regularly monitor the level and
nature of brand equity for each of their brands to determine and ensure
their brands’ strategic significance to the firm. The dynamic nature of
many markets is such that brand equity will decline if not actively
managed through coordinated marketing actions involving efforts to
maintain or strengthen brand recognition and specific, positive brand
associations.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Keller, Kevin Lane (1993). ‘Conceptualizing, Measuring, and Managing Customer-
Based Brand Equity,’ Journal of Marketing, 57(1), January, 1–22.
Marketing Management
Aaker, David A. (1991). Managing Brand Equity: Capitalizing on the Value of a Brand Name.
New York: The Free Press.
Marketing Research
Krishnan, H. S. (1996). ‘Characteristics of Memory Associations: A Consumer-
Based Brand Equity Perspective,’ International Journal of Research in Marketing, 3(4),
October, 389–405.
BIBLIOGRAPHY
Aaker, David A. (1996). Building Strong Brands. New York: The Free Press.
brand loyalty
DESCRIPTION
The extent of consumer preference for a brand in comparison to close
substitutes.
KEY INSIGHTS
Brand loyalty, as exemplified through consumer preference for the brand
and an associated commitment to repurchasing the brand, is recog-
nized by marketers as an important indicator of a brand’s value. While
brand positioning 66
repurchase behavior is clearly associated with brand loyalty, repurchase
behavior does not in and of itself demonstrate brand loyalty, as a brand’s
repurchase may be due to convenience rather than loyalty, for example.
In this context, many firms may have loyalty programs that encourage
repurchase, but even frequent repurchases do not necessarily indicate
that consumers are brand loyal to any degree.
KEY WORDS Consumer preference, brand preference
IMPLICATIONS
Marketers aiming to achieve strong brand loyalty among the firm’s cus-
tomers should seek to understand the extent of consumer preference for
the firm’s brand(s) in ways that go beyond examining repeat purchase
behavior. Such an understanding can enable marketers to benefit from
and make strategic use of brand loyalty in ways that include lowering the
cost to serve loyal customers and leveraging loyalty to help attract new
customers. (See loyalty ripple effect.)
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Raju, Jagmohan S., Srinivasan, V., and Lal, Rajiv (1990). ‘The Effects of Brand Loyalty
on Competitive Price Promotional Strategies,’ Management Science, 36(3), March,
276–304.
Marketing Management
Bloemer, Jose M. M., and Kasper, Hans D. P. (1995). ‘The Complex Relationship
between Consumer Satisfaction and Brand Loyalty,’ Journal of Economic Psychology,
16, 311–29.
Consumer Behavior
Jacoby, Jacob, and Kyner, David B. (1973). ‘Brand Loyalty vs. Repeat Purchasing
Behavior,’ Journal of Marketing Research, 10(1), February, 1–9.
Baldinger, Allan L., and Rubinson, Joel (1996). ‘Brand Loyalty: The Link between
Attitude and Behavior,’ Journal of Advertising Research, 36(6), 22–36.
BIBLIOGRAPHY
Jacoby, Jacob, and Chestnut, Robert W. (1978). Brand Loyalty: Measurement and Man-
agement. New York: Wiley.
Tucker, W. T. (1964). ‘The Development of Brand Loyalty,’ Journal of Marketing
Research, 1(3), August, 32–35.
brand positioning
DESCRIPTION
The distinctive position adopted by a firm’s brand in relation to competing
brands.
KEY INSIGHTS
Effective brand positioning enables a firm’s brand to be readily distin-
guishable from competing brands in the marketplace. Distinguishing the
brand from other brands can be in terms of associated brand attributes,
benefits to users, and/or market segment emphasis, among other factors.
Effective brand positioning further emphasizes elements of superiority
along one or more distinguishing dimensions which are valued by con-
sumers. By adopting multiple brands, firms also have an opportunity to
67 bundling
strategically position brands with respect to each other and those of other
competitors, such as when a firm chooses to introduce a fighter brand to
protect one or more of its higher-priced brands. A fighter brand—a brand
that is priced close to that of a competitor’s lower-priced offering—can
take pressure off the firm to lower the price of its higher-priced brand to
compete with the competitor’s brand in a market characterized by high
price sensitivity.
KEY WORDS Brand distinctiveness, brand superiority
IMPLICATIONS
Marketers concerned with effective brand position for their firm’s brands
should seek to understand carefully the relevant dimensions along which
their brands are able to be distinguishable and distinctive as a result of
consumer evaluations of brands in the marketplace. Effective brand posi-
tioning is an important aim in a firm’s marketing strategy development
and associated marketing mix management.
APPLICATION AREAS AND FURTHER READINGS
International Marketing
Alden, Dana L., Steenkamp, Jan-Benedict E. M., and Batra, Rajeev (1999). ‘Brand
Positioning through Advertising in Asia, North America, and Europe: The Role
of Global Consumer Culture,’ Journal of Marketing, 63(1), January, 75–87.
Marketing Strategy
De Chernatony, Leslie, and Daniels, Kevin (1994). ‘Developing a More Effective
Brand Positioning,’ Journal of Brand Management, 1(6), 373–379.
Marketing Research
Sujan, Mita, and Bettman, James R. (1989). ‘The Effects of Brand Positioning
Strategies on Consumers’ Brand and Category Perceptions: Some Insights from
Schema Research,’ Journal of Marketing Research, 26(4), November, 454–467.
Marketing Modeling
Bronnenberg, Bart J., and Wathieu, Luc (1996). ‘Asymmetric Promotion Effects and
Brand Positioning,’ Marketing Science, 15(4), 379–394.
BIBLIOGRAPHY
Sengupta, Subroto (2005). Brand Positioning: Strategies for Competitive Advantage. New
Delhi: Tata McGraw-Hill.
break-even pricing see pricing strategies
brick(s)-and-mortar marketing see entry at online marketing
brown goods see goods
bundling
DESCRIPTION
The marketing strategy or practice that involves offering multiple products or
services as a single combined product or service offering.
KEY INSIGHTS
A bundling strategy or practice can be potentially beneficial to a
firm under conditions including those where products or services are
bundling 68
characterized by high volume and high margins. While the approach
helps simplify consumer decision making and further enables consumers
to benefit from possessing or consuming the combination offered, the
firm may also benefit further from the approach as a result of economies
of scale in production and/or economies of scope in distribution. The
strategy or practice of bundling has variations including that of offer-
ing consumers an inseparable bundled offering (i.e. a pure bundling
approach) or a separable bundled offering (i.e. a mixed bundling approach
that allows the consumer to purchase one or more elements of the
bundle).
KEY WORDS Combined offerings
IMPLICATIONS
Firms may benefit strategically from use of a bundling approach for their
product or services to the extent the practice provides economic benefits
to the firm and consumption-related benefits to consumers (e.g. financial,
simplified decision making) in relation to benefits provided by unbundled
offerings. Given the wide array of bundles that a firm may potentially
offer its customers, marketing managers and strategists must seek to
understand and manage carefully the characteristics of production, dis-
tribution, pricing, and promotion of its products and/or services that may
make particular bundled offerings highly attractive to both the firm and
its customers.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Stremersch, Stefan, and Tellis, Gerard J. (2002). ‘Strategic Bundling of Products and
Prices: A New Synthesis for Marketing,’ Journal of Marketing, 66(1), January, 55–72.
Services Marketing
Guiltinan, Joseph P. (1987). ‘The Price Bundling of Services: A Normative Frame-
work,’ Journal of Marketing, 51(2), April, 74–85.
Online Marketing
Bakos, Yannis, and Brynjolfsson, Erik (2000). ‘Bundling and Competition on the
Internet,’ Marketing Science, 19(1), Winter, 63–82.
Retail Marketing
Mulhern, Francis J., and Leone, Robert P. (1991). ‘Implicit Price Bundling of Retail
Products: A Multiproduct Approach to Maximizing Store Profitability,’ Journal of
Marketing, 55(4), October, 63–76.
Marketing Research
Soman, Dilip, and Gourville, John T. (2001). ‘Transaction Decoupling: How Price
Bundling Affects the Decision to Consume,’ Journal of Marketing Research, 38(1),
February, 30–44.
Yadav, Manjit S., and Monroe, Kent B. (1993). ‘How Buyers Perceive Savings in
a Bundle Price: An Examination of a Bundle’s Transaction Value,’ Journal of
Marketing Research, 30(3), August, 350–358.
BIBLIOGRAPHY
Fuerderer, Ralph, Herrmann, Andreas, and Wuebker, Georg (1999). Optimal
Bundling: Marketing Strategies for Improving Economic Performance. Berlin: Springer.
69 business-to-business marketing
business analysis see new product development
business buyer behavior see industrial buyer behavior
business buying process see industrial buyer behavior
business marketing see business-to-business marketing
business-to-business marketing
(also called B2B marketing, business marketing, industrial marketing,
organizational marketing, and trade marketing)
DESCRIPTION
The marketing of products and services by one organization to another and
where such products and services are typically used in the production of other
products for resale purposes or in support of service offerings provided to
other customers.
KEY INSIGHTS
Business-to-business (B2B) marketing is often characterized by sophisti-
cated buyers and complex products and constitutes a major proportion of
all marketing activity. The scope of B2B marketing not only encompasses
the marketing of products and services to other businesses, but to gov-
ernments, institutions (e.g. hospitals) and other agencies, organizations,
and authorities (e.g. those for airports) as well.
KEY WORDS Industrial marketing, organizational marketing
IMPLICATIONS
In many ways, B2B marketing approaches can be quite different than
business-to-consumer marketing approaches, such as the frequently
greater use of personal selling approaches in generating interest among
potential customers. It is therefore imperative for B2B marketers to
understand better the intricacies of business buyer behavior and the
business buying process (see industrial buyer behavior) in order to
accomplish the firm’s B2B marketing objectives.
APPLICATION AREAS AND FURTHER READINGS
Services Marketing
Filiatrault, P., and Lapierre, J. (1997), ‘Managing Business-to-Business Marketing
Relationships in Consulting Engineering Firms’, Industrial Marketing Management,
26(2), 213–222.
Online Marketing
Sharma, A. (2002). ‘Trends in Internet-Based Business-to-Business Marketing,’ Indus-
trial Marketing Management, 31(2), February, 77–84.
Avlonitis, G. J., and Karayanni, D. A. (2000). ‘The Impact of Internet Use on Business-
to-Business Marketing: Examples from American and European Companies,’
Industrial Marketing Management, 29(5), September, 441–459.
BIBLIOGRAPHY
Webster, F. E., Jr. (1995). Industrial Marketing Strategy, 3rd edn. New York: John Wiley
& Sons.