Dacko S.G. The Advanced Dictionary of Marketing Putting Theory to Use
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door-in-the-face technique 170
door-in-the-face technique
(also called the rejection-then-retreat technique)
DESCRIPTION
A technique for persuading an individual to accept or adopt a particular course
of action where the individual is first presented with a request to accept a much
larger course of action which the individual is almost certain to reject.
KEY INSIGHTS
Based on pioneering research by Cialdini et al. (1975), the door-in-the-face
technique was observed to be more effective in obtaining volunteers for
particular causes relative to the condition where volunteers were sought
for the same causes without using the technique. The technique therefore
involves presenting an option that is so extreme as to be unacceptable,
thereby making lesser alternatives appear more acceptable in compari-
son.
KEY WORDS Persuasion, compliance, negotiation, selling
IMPLICATIONS
While the technique may certainly not be appropriate for use in all or
even in most instances where marketers seek to persuade as it is one tech-
nique among many, it nevertheless may be an alternative, and marketers
may wish to explore its viability in areas of persuasive communication
including personal selling and negotiations.
APPLICATION AREAS AND FURTHER READINGS
Marketing Research
Groves, Robert M., Cialdini, Robert B., and Couper, Mick P. (1992). ‘Understanding
the Decision to Participate in a Survey,’ Public Opinion Quarterly, 56(4), Winter,
475–495.
Marketing Strategy
Tybout, Alice M. (1978). ‘Relative Effectiveness of Three Behavioral Influence Strat-
egies as Supplements to Persuasion in a Marketing Context,’ Journal of Marketing
Research, 15(2), May, 229–242.
Fern, Edward F., Monroe, Kent B., and Avila, Ramon A. (1986). ‘Effectiveness of
Multiple Request Strategies: A Synthesis of Research Results,’ Journal of Marketing
Research, 23(2), May, 144–152.
Dillard, James P., Hunter, John E., and Burgoon, Michael (1984). ‘Sequential-Request
Persuasive Strategies: Meta-Analysis of Foot-in-the-Door and Door-in-the-Face,’
Human Communication Research, 10(4), June, 461.
BIBLIOGRAPHY
Cialdini, R. B., Vincent, J. E., Lewis, S. K., Catalan, J., Wheeler, D., and Darby, B. L.
(1975). ‘Reciprocal Concessions Procedure for Inducing Compliance: The Door-in
the-Face Technique,’ Journal of Personality and Social Psychology, 31, 206–215.
door-to-door marketing see direct marketing
double jeopardy effect
DESCRIPTION
The phenomenon where big-share brands benefit in two ways when compared
tosmall-sharebrands,namely,(1)havingmorebuyersthan small-share brands
171 drive theory of social facilitation
and (2) being bought slightly more frequently than small-share brands, where
both effects occur within the same timeframe.
KEY INSIGHTS
The double jeopardy effect is present in a product category where it is
observed that high market penetration tends to coincide with slightly
higher purchase frequencies. Confirmed observations of the phenom-
enon make it an empirical generalization across a number of branded
product categories, ranging from detergents to pet foods to pharmaceut-
ical prescribing, in the UK, the USA, Europe and Japan.
KEY WORDS Brands, size, purchase frequency, loyalty
IMPLICATIONS
Marketers involved in brand management should strive to understand
purchase behaviors for all brands in a particular product category and
whether the double jeopardy pattern is visible. To the extent it is
observed, marketers may be able to anticipate better how changes to
encourage more buyers may also coincide with greater purchase fre-
quency.
APPLICATION AREAS AND FURTHER READINGS
Promotions
Jones, J. P. (1990). ‘The Double Jeopardy of Sales Promotions,’ Harvard Business
Review, 68(5), September–October, 145–152.
Marketing Modeling
Fader, Peter S., and Schmittlein, David C. (1993). ‘Excess Behavioral Loyalty for
High-Share Brands: Deviations from the Dirichlet Model for Repeat Purchasing,’
Journal of Marketing Research, 30(4), November, 478–493.
Marketing Research
Ehrenberg, A. S. C. (1995). ‘Empirical Generalisations, Theory, and Method,’ Mar-
keting Science, 14(3), Part 2 of 2: Special Issue on Empirical Generalizations in
Marketing, G20–G28.
BIBLIOGRAPHY
Ehrenberg, Andrew S. C., Goodhardt, Gerald J., and Barwise, T. Patrick (1990).
‘Double Jeopardy Revisited,’ Journal of Marketing, 54(3), July, 82–91.
Ehrenberg, A., and Goodhardt, G. (2002). ‘Double Jeopardy Revisited, Again,’ Mar-
keting Research, 14(1), 40–42.
drive theory of social facilitation
DESCRIPTION
A theory aimed at explaining how and why a social presence, such as that of a
passive audience, may facilitate or hinder the performance of an individual’s
task.
KEY INSIGHTS
Based on pioneering research by Zajonc (1965), the theory suggests that
the unpredictable nature of people leads one to be in a more alert or
aroused state when performing a task. When an individual performs
a task that is well learned or simple, a social presence may lead to
enhanced performance as such a presence may facilitate eliciting dom-
inant responses from the individual. On the other hand, performance
dynamic capabilities 172
may be reduced by a social presence when an individual performs an
inadequately learned or difficult task as a result of incorrect responses
dominating.
KEY WORDS Audiences, social facilitiation, motivation, performance
IMPLICATIONS
Marketers should be sensitive to how audiences or other forms of social
presence may facilitate or hinder the performance of particular indi-
viduals engaged in particular tasks, as when a marketing executive is
interviewed before a live audience. In such a case, consideration should
be given to not only the nature of the social presence (e.g. audience
receptivity, friendliness) but also the abilities of the individual relative
to the task (e.g. public speaking ability) and the relative simplicity or
difficulty of the task (e.g. whether it is a well-known or difficult and
controversial topic).
APPLICATION AREAS AND FURTHER READINGS
Marketing Communications
Sussman, Stephanie W., and Sproull, Lee (1999). ‘Straight Talk: Delivering Bad
News through Electronic Communication,’ Information Systems Research, 10(2),
June, 150–166.
Deaudelin, Colette, Dussault, Marc, and Brodeur, Monique (2003). ‘Human–
Computer Interaction: A Review of the Research on its Affective and Social
Aspects,’ Canadian Journal of Learning and Technology, 29(1), Winter.
Services Marketing
Sundaram, D. S., and Webster, Cynthia (2000). ‘The Role of Nonverbal Communi-
cation in Service Encounters,’ Journal of Services Marketing, 14(5), September, 378–
391.
BIBLIOGRAPHY
Geen, R. G., and Gange, J. J. (1977). ‘Drive Theory of Social Facilitation: Twelve Years
of Theory and Research,’ Psychological Bulletin, 84, 1267–88.
Zajonc, R. B. (1965). ‘Social Facilitation,’ Science, 149, 269–274.
Peskin, M. M. (1997). ‘Drive Theory Revisited,’ Psychoanalytic Quarterly, 66, 377–402.
Dunning’s eclectic paradigm see eclectic paradigm
durable good see goods
dynamic capabilities
DESCRIPTION
Processes within a firm aimed at maintaining consistency with, or creating
changes to, the firm’s markets.
KEY INSIGHTS
As markets are rarely static, but rather are often in a state of constant
change in terms of their evolution (e.g. they emerge, merge, divide, or
die out), dynamic capabilities capture the notion that there are processes
within a firm that assist it with maintaining compatibility with, or
proactively changing, market conditions. In particular, firms can be
viewed as having organizational and strategic routines that enable the
173 dynamic capabilities
firm to harness, integrate, or reconfigure resources, as well as establish
or release new resources, aimed at ensuring market consistency or its
focused change, and where the ultimate aim is that of developing and
achieving competitive advantages. While the term may be vaguely or
generally applied in characterizations of the relative strength of the
organization’s overall capabilities, it can also be used in the identification
of specific capabilities, such as those facilitating effective new product
development efforts (e.g. via the presence and development of technolog-
ical skills among workers) or effective strategic decision making (e.g. via
the pooling of functional expertise among managers), for example.
KEY WORDS Competitive advantage, dynamic markets
IMPLICATIONS
As markets clearly vary in the nature and extent of their dynamic change,
marketers must assess how and to what extent dynamic capabilities
within the firm may contribute to maintaining consistency between the
firm and its markets and/or influencing market change. At the extreme,
a market may be so volatile that a firm’s dynamic capabilities become
unstable. At the very least, however, a firm may benefit from under-
standing, evaluating, and integrating ‘best industry practices’ as part of
its efforts to develop and implement value-creating strategies given its
specific resources.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Teece, D. J., Pisano, G., and Shuen, A. (1997). ‘Dynamic Capabilities and Strategic
Management,’ Strategic Management Journal, 18(7), 509–534.
Rindova, V., and Kotha, S. (2001). ‘Continuous Morphing: Competing through
Dynamic Capabilities, Form, and Function,’ Academy of Management Journal, 44,
1263–1280.
International Marketing
Griffith, David A., and Harvey, Michael G. (2001). ‘A Resource Perspective of Global
Dynamic Capabilities,’ Journal of International Business Studies, 32(3), 597–606.
New Product Development
Marsh, S. J., and Stock, G. N. (2003). ‘Building Dynamic Capabilities in new Product
Development through Intertemporal Integration,’ Journal of Product Innovation
Management, 20, 136–148.
BIBLIOGRAPHY
Eisenhardt, K., and Martin, J. (2000). ‘Dynamic Capabilities: What are They?’ Stra-
tegic Management Journal, 21, 1105–1121.
dynamic pricing see pricing strategies
E
E, theory see E and O theories of change
E and O theories of change
DESCRIPTION
A set of two dramatically different theories of organizational change, with
theoryE focusing on the creation of economicvalue and with theory O focusing
on the development of the organization’s human capabilities.
KEY INSIGHTS
Put forth and developed by Beer and Nohria (2000), the two different
approaches to organizational change emphasize differences in both the
purpose and means of organizational change. With theory E’s purpose
being that of creating economic value (e.g. shareholder value), the means
of change associated with theory E is viewed as including, among other
factors, top-down leadership, an organizational emphasis on structure
and systems, and programmatic planning. In contrast, theory O’s purpose
of developing human capabilities within the organization for effective
strategy implementation and learning from organizational change leads
the organization to adopt a cultural focus with participative leadership
and rely on an emergent approach to planning. Given that arguments
for both approaches to organizational change are equally legitimate and
plausible, each has shortcomings relative to the other, however. As such,
combining the two approaches, while somewhat paradoxical, may lead
to more effective organizational change in comparison to the adoption of
only one approach or the other. Still, the daunting challenge associated
with the effective integration of the two approaches (either by simulta-
neous or sequential means) suggests that firms lacking the overall skills
to integrate them may be better adopting only a single approach with
recognition of its particular costs and benefits.
KEY WORDS Organizational change, value, capabilities
IMPLICATIONS
Marketing managers and strategists involved in major efforts to develop
and implement organizational change may find a greater knowledge of
the E and O theories of change to understand and evaluate better the
change options and approaches open to the firm. In particular, man-
agers must assess to what extent the firm may be able to integrate the
175 eclectic paradigm
approaches or implement either in an effort to identify the most suitable
means of pursuing particular organizational changes.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Sturdy, A., and Grey, C. (2003). ‘Beneath and beyond Organizational Change Man-
agement: Exploring Alternatives,’ Organization, 10(4), 651–662.
Prastacos, G., Soderquist, K., Spanos, Y., and Van Wassenhov, L. (2002). ‘An Inte-
grated Framework for Managing Change in the New Competitive Landscape,’
European Management Journal, 20(1), 55–71.
Lawson-Borders, G. (2003). ‘Integrating New Media and Old Media: Seven Obser-
vations of Convergence as a Strategy for Best Practices in Media Organization,’
International Journal on Media Management, 5(2), 91–99.
BIBLIOGRAPHY
Beer, M., and Nohria, N. (ed.) (2000). Breaking the Code of Change. Boston: Harvard
Business School Press.
early adopters see adopter categories
early follower see market entry timing
early majority see adopter categories
eclectic paradigm
(also called Dunning’s eclectic paradigm or the OLI paradigm)
DESCRIPTION
A paradigmatic view for the consideration of foreign direct investment which
suggests that ownership-specific advantages, location-specific advantages,
and internalization advantages are three factors that are important in estab-
lishing whether a firm pursues direct investment in international operations.
KEY INSIGHTS
The eclectic paradigm as advanced by Dunning and developed in sub-
sequent internationalization research suggests that the combination of
ownership-specific advantages (i.e. advantages specific to the firm which
enable them to compete against firms in the target country), location-
specific advantages (advantages associated with the conditions prevailing
in the target country), and internalization advantages (advantages associ-
ated with abilities to manage assets within the firm rather than license
their use) often requires foreign direct investment, as in requiring a firm
to establish production facilities where its foreign assets and resources
are located.
KEY WORDS Internationalization, foreign direct investment, multinational
enterprises, international operations
IMPLICATIONS
Marketers involved in international marketing strategy development and
international marketing management may benefit from understanding
mechanisms of internationalization which draw upon the eclectic para-
digm when the aim of a firm is to ascertain the need for foreign direct
economies of growth 176
investment given a firm’s particular ownership, locational, and/or inter-
nalization advantages. Such knowledge may be beneficial, for example,
in assisting marketers with decisions regarding the best way of meeting
customer needs in different country markets (e.g. through a local pres-
ence versus a contractual arrangement with another organization).
APPLICATION AREAS AND FURTHER READINGS
International Marketing
Dawson, J. A. (1994). ‘Internationalisation of Retail Operations,’ Journal of Marketing
Management, 10, 267–282.
Johansson, Jan, and Vahlne, Jan-Erik (1990). ‘The Mechanism of Internationalisa-
tion,’ International Marketing Review, 7(4), October.
Cantwell, John, and Narula, Rajneesh (2001). ‘The Eclectic Paradigm in the Global
Economy,’ International Journal of the Economics of Business, 8(2), July, 155–172.
BIBLIOGRAPHY
Dunning, J. H. (1981). International Production and the Multinational Enterprise. London:
Allen & Unwin.
Dunning, John H. (1995). ‘Reappraising the Eclectic Paradigm in an Age of Alliance
Capitalism,’ Journal of International Business Studies, 26, 461.
Dunning, John H. (2001). ‘The Eclectic (OLI) Paradigm of International Production:
Past, Present and Future,’ International Journal of the Economics of Business, 8(2), July,
173–190.
Williamson, O. E. (1979). ‘Transaction-Cost Economics: The Governance of Contrac-
tual Relations,’ Journal of Law and Economics, 22, October, 233–261.
ecological validity see validity
eco-centric marketing see green marketing
eco-marketing see green marketing
economic environment see macroenvironment
economic theory of clubs see clubs, theory of
economies of growth
DESCRIPTION
Advantages accruing to a growing firm as a consequence of its current or
earlier economic growth.
KEY INSIGHTS
Independent of other factors such as scale or scope, a growing firm may
experience certain advantages relative to that experienced by a stationary
firm. Beyond a certain rate of growth, a growing firm may find it is easier
to retain and attract high-quality management, for example.
KEY WORD Growth
IMPLICATIONS
Depending on the current or past growth rate of their firm, marketers
may find that such a measure of organizational performance provides
the firm with certain advantages that are not achievable or evident in
relation to other organizational performance indicators or strategies.
177 economies of scale
Given such favorable circumstances, marketing managers may wish to
actively explore ways to put such advantages to use, such as in the area
of recruitment of new management and related negotiations.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Penrose, Edith T. (1960). ‘The Growth of the Firm: A Case Study: The Hercules
Powder Company?’ Business History Review, 34(1), 1–23.
Pitelis, C. (ed.) (2002). The Growth of the Firm: The Legacy of Edith Penrose. Oxford: Oxford
University Press.
BIBLIOGRAPHY
Penrose, E. (1958). The Theory of the Growth of the Firm. New York: Wiley.
economies of scale
DESCRIPTION
Reductions in unit production costs resulting from an increase in production
output.
KEY INSIGHTS
Economies of scale in a production process can be achieved with higher
output levels in a production process when the higher levels of output
enable the use of more productive technologies, greater specialization
of labor, lower per-unit material costs, more efficient equipment, better
management utilization, and the like. In the context of economies of
scale, production processes may include activities beyond the traditional
manufacture of goods such as product distribution and services market-
ing and management. A benefit of economies of scale is that they enable
a producer to offer products or services at more competitive prices or to
obtain higher per-unit profit margins.
KEY WORDS Production output, cost(s), scale
IMPLICATIONS
Marketers seeking to reduce unit production costs for goods or services
in any process should consider how increasing output to specifically
higher levels can provide opportunities to incorporate new or different
approaches into the production process that could result in predictable
cost reductions.
APPLICATION AREAS AND FURTHER READINGS
Marketing Management
Webster, Frederick E., Jr. (1992). ‘The Changing Role of Marketing in the Corpora-
tion,’ Journal of Marketing, 56(4), October, 1–17.
Srivastava, Rajendra K., Shervani, Tasadduq A., and Fahey, Liam (1999). ‘Marketing,
Business Processes, and Shareholder Value: An Organizationally Embedded View
of Marketing Activities and the Discipline of Marketing,’ Journal of Marketing, 63,
Fundamental Issues and Directions for Marketing, 168–179.
International Marketing
Ayal, Igal, and Zif, Jehiel (1979). ‘Market Expansion Strategies in Multinational
Marketing,’ Journal of Marketing, 43(2), Spring, 84–94.
economies of scope 178
Levitt, Theodore (1982). The Globalization of Markets. Boston: Soldiers Field, Division
of Research, Graduate School of Business Administration, Harvard University.
BIBLIOGRAPHY
Stigler, George J. (1958). ‘The Economies of Scale,’ Journal of Law and Economics,1,
October, 54–71.
economies of scope
DESCRIPTION
Reductions in unit production costs resulting from an increase in the range of
goods produced.
KEY INSIGHTS
Given that the production of goods can be broadly defined to include
the provision of any product or service by a firm, economies of scope
are present any time a change in the scope of the firm’s offerings leads
to a reduction in the unit costs associated with the provision of the
offerings. Thus, an economy of scope is evident when it is more efficient
for a salesperson to sell several of the firm’s products rather than just
one product. Typically, economies of scope arise when multiple activities
of the firm are related and where common or shared resources such as
equipment or personnel are involved.
KEY WORDS Product range, cost(s)
IMPLICATIONS
Marketing managers may benefit from examining the range of the firm’s
offerings for possible expansion if the aim is to manage and reduce such
unit marketing costs. However, marketers should also seek to under-
stand how and when there may be limits to the achievement of scope
economies in certain marketing efforts (as when a salesperson is respon-
sible for the sale of greater numbers of specialized products to the point
where product knowledge suffers).
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Helfat, Constance E., and Eisenhardt, Kathleen M. (2004). ‘Inter-temporal
Economies of Scope, Organizational Modularity, and the Dynamics of Diversi-
fication,’ Strategic Management Journal, 25(13), 1217–1232.
Nayyar, P., and Kazanjian, R. (1993). ‘Organizing to Attain Potential Benefits from
Information Asymmetries and Economies of Scope in Related Diversified Firms,’
Academy of Management Review, 18, 735–759.
Services Marketing
Nayyar, Praveen R. (1993). ‘Performance Effects of Information Asymmetry and
Economies of Scope in Diversified Service Firms,’ Academy of Management Journal ,
36(1), February, 28–57.
BIBLIOGRAPHY
Gimeno, J., and Woo, C. Y. (1999). ‘Multimarket Contact, Economies of Scope, and
Firm Performance,’ Academy of Management Journal, 43, 239–259.
edge effect see serial position effect
179 efficient market hypothesis
effect, law of
DESCRIPTION
The psychological principle that states, of the several responses made to the
same situation, that which is accompanied or closely followed by satisfaction,
other things being equal, will more likely be repeated, and the connections
learned, whereas those responses that are followed by punishment will be
extinguished.
KEY INSIGHTS
Based on pioneering research by Thorndike (1927), the law of effect
is a way to explain how people learn, which involves the selection of
behaviors based on their consequences. According to this view, responses
that lead to reward tend to increase in strength, whereas those that lead
to punishment tend to decrease in strength. The first part of the law has
been amply corroborated by empirical studies, while the second part of
the law has received less corroboration.
KEY WORDS Learning, behavioral consequences, satisfaction
IMPLICATIONS
Based on the law of effect, marketers would expect consumers to be
much more likely to repeatedly purchase a brand if they were satisfied
with it and be much more likely to discontinue purchase if dissatisfied.
In any offering, whether goods purchased or services used, future con-
sumer behaviors may be dependent on consumers’ views of the likely
consequences of their particular consumption choice behaviors.
APPLICATION AREAS AND FURTHER READINGS
Consumer Behavior
Kahn, Barbara, Ratner, Rebecca, and Kahneman, Daniel (1997). ‘Patterns of Hedo-
nic Consumption over Time,’ Marketing Letters, 8(1), January, 85–96.
Bennett, Peter D., and Mandell, Robert M. (1969). ‘Prepurchase Information Seek-
ing Behavior of New Car Purchasers: The Learning Hypothesis,’ Journal of Market-
ing Research, 6(4), November, 430–433.
Heiner, Ronald A. (1983). ‘The Origin of Predictable Behavior,’ American Economic
Review, 73(4), September, 560–595.
BIBLIOGRAPHY
Thorndike, Edward L. (1927). ‘The Law of Effect,’ American Journal of Psychology,
39(1–4), December, 212–222.
Herrnstein, R. J. (1970). ‘On the Law of Effect,’ Journal of the Experimental Analysis of
Behavior, 13, 243–266.
efficient market hypothesis
DESCRIPTION
The view that asset prices in a market reflect fully all known information and
therefore are the best available estimates of their real values.
KEY INSIGHTS
The efficient market hypothesis, largely examined in relation to the
prices of securities in the stock market, provides a basis for economic