Dacko S.G. The Advanced Dictionary of Marketing Putting Theory to Use
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L
laddering
DESCRIPTION
A knowledge acquisition technique where the core attributes and values that
drive the consumer of a product are identified through a form of in-depth
interview.
KEY INSIGHTS
The laddering technique aims to establish underlying motivations for
the purchase of an offering (e.g. a product) by asking a consumer why
he or she buys the product and then, given the response, asking ‘why’
to that response and each subsequent response until the respondent
can no longer provide an explanation. The approach therefore enables
a marketer to understand why the consumer really buys the product.
KEY WORDS Interviewing, in-depth interviewing, purchase drivers
IMPLICATIONS
The laddering technique can be very useful to marketing researchers
conducting in-depth interviews of product consumers or service users
to understand the real drivers behind product or service purchase. Mar-
keters must exercise caution, however, to ensure that interviewees are
sufficiently comfortable with such lines of questioning.
APPLICATION AREAS AND FURTHER READINGS
Marketing Research
Reynolds, Thomas J., and Gutman, Jonathan (1988). ‘Laddering Theory, Method,
Analysis, and Interpretation,’ Journal of Advertising Research, 28(1) February–March,
11–31.
Grunert, K. G., and Grunert, S. C. (1995). ‘Measuring Subjective Meaning Structures
by the Laddering Method: Theoretical Considerations and Methodological Prob-
lems,’ International Journal of Research in Marketing, 12(3), October, 209–225.
Hofstede, F. T., Audenaert, A., Steenkamp, J. B. E. M., and Wedel, M. (1998). ‘An
Investigation into the Association Pattern Technique as a Quantitative Approach
to Measuring Means-End Chains,’ International Journal of Research in Marketing,
15(1), February, 37–50.
Marketing Strategy
Reynolds, T. J., and Whitlark, D. B. (1995). ‘Applying Laddering Data to Communi-
cations Strategy and Advertising Practice,’ Journal of Advertising Research, 35(4), 9.
BIBLIOGRAPHY
Wansink, B. (2000). ‘New Techniques to Generate Key Marketing Insights,’ Market-
ing Research, 12(2), 28—36.
laggards see adopter categories
291 lagged effect
lagged effect
(also called lagged response or delayed response effect)
DESCRIPTION
Any delay in time between an action and its intended effect.
KEY INSIGHTS
Lagged effects represent a lack of synchronism between cause and effect.
In the context of consumer purchase as the intended effect for which
there is a delay in its occurrence, reasons for why the effect is not always
immediate and fully realized in the period for which the change takes
place include: delays in response, as when there is a delay in execution of
a marketing action, a delay in the time the marketing action is observed
by a consumer, a delay in a consumer’s decision to purchase, or a delay in
fulfillment of a customer order; customer holdover effects where market-
ing actions have an effect which carries over to periods beyond the period
of study; and anticipatory response effects, such as consumer anticipation
of a marketing action (e.g. a delay in sales due to an anticipated price
reduction).
KEY WORDS Delay, lag time, effect
IMPLICATIONS
Marketers will invariably face lags in the time between marketing
actions and the action’s effects. Marketers should consider the various
causes of lagged effects to ensure realistic planning and implementa-
tion as well to be able to proactively take action to control and reduce
undesirable delays. Marketers should also consider how current mar-
keting actions may be affected by earlier marketing actions (e.g. pre-
vious advertising campaigns) which have produced lagged effects as
well.
APPLICATION AREAS AND FURTHER READINGS
Advertising
Bass, Frank M., and Clarke, Darral G. (1972). ‘Testing Distributed Lag Mod-
els of Advertising Effect,’ Journal of Marketing Research, 9(3), August, 298–
308.
Marketing Modeling
Weinberg, Charles B. (1976). ‘Dynamic Correction in Marketing Planning Models,’
Management Science, 22(6), February, 677–687.
Doyle, Peter, and Saunders, John (1985). ‘The Lead Effect of Marketing Decisions,’
Journal of Marketing Research, 22(1), February, 54–65.
BIBLIOGRAPHY
Kotler, P. (1971). Marketing Decision Making: A Model Building Approach. New York: Holt,
Rinehart & Winston.
lagged response see lagged effect
Lancaster’s characteristics theory see characteristics theory
large numbers, law of 292
large numbers, law of
DESCRIPTION
A principle of probability and statistics which indicates that the average
of a random sample of a population is increasingly likely to be close
to the mean of the population as the sample size becomes increasingly
large.
KEY INSIGHTS
The law of large numbers enables conclusions, such as estimates and
forecasts, to be drawn about populations based on random samples. More
specifically, as the number in a sample increases, the more likely it will
be that the estimate obtained, i.e. the average of the sample, will reflect
the actual value for the larger population, including that for what is not
measured.
KEY WORDS Sampling, probabilities, statistical analysis
IMPLICATIONS
Marketers involved in making forecasts and estimates from random
samples can understand better to what extent findings are likely to be
representative of larger populations based on the statistical principle
embodied in the law of large numbers. The law also provides insight
into appropriate sample design in support of marketing research and
marketing model development for new marketing initiatives including
online marketing.
APPLICATION AREAS AND FURTHER READINGS
Marketing Modeling
Bakos, Yannis, and Brynjolfsson, Erik (1999). ‘Bundling Information Goods:
Pricing, Profits, and Efficiency,’ Management Science, 45(12), December, 1613–
1630.
Online Marketing
Bakos, Yannis (2001). ‘The Emerging Landscape for Retail E-commerce,’ Journal of
Economic Perspectives, 15(1), Winter, 69–80.
Bakos, Y., and Brynjolfsson, E. (2000). ‘Bundling and Competition on the Internet,’
Marketing Science, 19(1), 63–82.
BIBLIOGRAPHY
Grimmett, G. R., and Stirzaker, D. R. (1992). Probability and Random Processes, 2nd
edn. Oxford: Clarendon Press.
late follower see market entry timing
late majority see adopter categories
late response bias see bias
latent demand see demand
latent trait theory see item response theory
later market entrant see market entry timing
293 leapfrogging
lateral marketing
DESCRIPTION
A marketing approach involving exploration and creativity in the restructuring
of a good by adding needs, uses, situations, or targets that would otherwise
be unreachable without the appropriate changes.
KEY INSIGHTS
Developed by Kotler and de Bes (2003) in a book by the same name,
the approach emphasizes the opportunity for a firm’s offerings to reach
beyond its current boundaries. An example is that of organic food, which
is defined based on specially labelled and regulated products. If firms in
the organic food industry were to claim and build upon a ‘well-being’
positioning, the organic food industry could aim to develop new products,
uses, and situations that might not only add to industry sales volume
but might also lessen their cannibalization with existing organic food
offerings.
KEY WORDS Repositioning, product repositioning, creativity
IMPLICATIONS
Marketers looking for ways to move the firm’s offerings beyond their
traditional boundaries may benefit from a greater understanding of
the lateral marketing approach and its associated exploration-based and
creativity-based methods. In using the approach to reposition and restruc-
ture their offerings, marketers may identify not only multiple new
repositioning directions but also particular ones that potentially provide
the firm with higher growth prospects than that constrained by the firm’s
current offerings.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Fodness, Dale (2005). ‘Rethinking Strategic Marketing: Achieving Breakthrough
Results,’ Journal of Business Strategy, 26(3), 20–34.
Marketing Research
Abubakar, Binta, and Austin, Nathan (2006). ‘An Exploratory Analysis for the
Modeling of Effective Marketing in Sensitive Historical Sites: The Consortium,’
Journal of Hospitality and Tourism, 10(1), 5–19.
BIBLIOGRAPHY
Kotler, Philip, and de Bes, Fernando Trías (2003). Lateral Marketing: New Techniques for
Finding Breakthrough Ideas. New York: John Wiley & Sons.
law(s) of . . . see specific entries, e.g. diminishing returns, law of
leadership strategy see decline strategies
lean-over marketing see stealth marketing
leapfrogging
DESCRIPTION
Strategic action involving the skipping of a strategic move that is inferior, less
efficient, or more costly than that of a subsequent strategic move adopted.
leapfrogging 294
KEY INSIGHTS
Given the steady or rapid pace of technological change affecting
many markets today, some firms, organizations, and even countries
that have (intentionally or unintentionally) not kept up with more
nimble competitors who are continually adopting the latest technology
may find their organizations are in a position to bypass the adoption of
certain technologies altogether and embrace instead a more advanced
technology that is superior, more efficient, or less costly than that cur-
rently adopted by competitors. In this sense, the organization is said to
be engaged in a process of technological leapfrogging over competitors.
Leapfrogging as a strategy is not necessarily limited to that of technolog-
ical influence, however.
KEY WORDS Competitive strategy, strategic moves
IMPLICATIONS
While opportunities for leapfrogging clearly vary depending on the
rate and extent of change of technological and other factors, and
factors internal to the organization as well, the approach as a
strategy is something that marketers in organizations operating
in a dynamic marketing environment need to give careful consider-
ation to if the aim is to remain competitive over the longer term.
The long-term evolution of many markets is such that leapfrogging
may enable currently weak competitors to become future strong
competitors in terms of their processes used, their offerings, or
both.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Morgan, R. E., and Hunt, S. D. (2002). ‘Determining Marketing Strategy: A Cyber-
netic Systems Approach to Scenario Planning,’ European Journal of Marketing, 36(4),
450–478.
Glazer, Rashi, and Weiss, Alien M. (1993). ‘Marketing in Turbulent Environments:
Decision Processes and the Time-Sensitivity of Information,’ Journal of Marketing
Research, 30(4), November, 509–521.
Marketing Research
Danaher, P. J., Hardie, B. G. S., and Putsis, W. P. (2001). ‘Marketing-Mix Variables and
the Diffusion of Successive Generations of a Technological Innovation,’ Journal of
Marketing Research, 38(4), 501–514.
John, George, Weiss, Allen M., and Dutta, Shantanu (1999). ‘Marketing in
Technology-Intensive Markets: Toward a Conceptual Framework,’ Journal
of Marketing, 63, Fundamental Issues and Directions for Marketing, 78–
91.
Chen, Y., Narasimhan, C., and Zhang, Z. J. (2001). ‘Individual Marketing with
Imperfect Targetability,’ Marketing Science, 20(1), 23–41.
BIBLIOGRAPHY
Weiss, Allen M., and John, George (1989). Leapfrogging Behavior and the Purchase of
Industrial Innovations: Theory and Evidence. Cambridge, Mass.: Marketing Science
Institute.
295 learning curve effect
learning curve effect
DESCRIPTION
Thesystematicpositiveeffectonhumanperformanceofaccumulatedlearning
through practice.
KEY INSIGHTS
Developed in pioneering research by Thurstone (1919), the learning curve
effect emphasizes the view that systematic changes in human perfor-
mance as a result of accumulations in learning can be mathematically
examined and graphically illustrated. Depiction of the systematic effects
of learning is typically through a graph of accumulated learning on the
x-axis and some performance measure on the y-axis. Performance may
be measured any number of ways including time it takes to complete a
task or the number of errors made in performing a task, both of which
would be shown to systematically decrease with cumulative learning as
indicated over time or the number of tasks performed.
The learning curve effect may also be described through a percentage
term for a given performance measure, as where an 80% learning curve
for the time to complete a task means that the average time to complete
the task falls to 80% of the previous average for every doubling in the
number of tasks completed.
The learning curve concept is closely related to the experience curve
concept in that both emphasize the change that occurs with learning.
Unlike the experience curve effect, however, the learning curve effect
refers to changes in the performance of individuals or, more broadly,
organizations through learning, whereas the experience curve more
often than not relates to the context of changes in production outcomes
as a result of accumulated production experience, which may be due in
part to a learning curve effect among production workers. (See experi-
ence curve effect.)
KEY WORDS Learning, performance, individuals, organizations
IMPLICATIONS
As marketers are engaged in a process of encouraging consumers to learn
about their brands, products, and services, the learning curve effect has
relevance for the development and design of marketing communications
aimed at systematically increasing a consumer’s learning about the mar-
keter’s offerings which enables the consumer to respond more effectively
to the offerings. In addition, learning within the marketing manager’s
own organization becomes an issue when the organization seeks to be
able to respond better and faster to information originating from outside
the organization including that from the firm’s own customers (e.g.
responding to customer complaints).
APPLICATION AREAS AND FURTHER READINGS
Marketing Research
Balachander, Subramanian, and Srinivasan, Kannan (1998). ‘Modifying Customer
Expectations of Price Decreases for a Durable Product,’ Management Science, 44(6),
June, 776–786.
learning theory 296
Marketing Management
Lapre, M. A., and Tsikriktsis, N. (2006). ‘Organizational Learning Curves for Cus-
tomer Dissatisfaction: Heterogeneity across Airlines,’ Management Science, 52(3),
352–366.
Argote, Linda, Beckman, Sara L., and Epple, Dennis (1990). ‘The Persistence and
Transfer of Learning in Industrial Settings,’ Management Science, 36(2), February,
140–154.
BIBLIOGRAPHY
Thurstone, L. L. (1919). ‘The Learning Curve Equation,’ Psychological Monographs, 26,
1–51.
learning theory
DESCRIPTION
Theory or theories aimed at explaining the individual learning process.
KEY INSIGHTS
There are multiple theories of learning, including those characterized
by constructivism and behaviorism. Constructivism is where a learner is
viewed as constructing ideas based upon past and current knowledge.
Behaviorism is where a learner is viewed as being conditioned to learn as
a result of environmental reinforcement or punishment. There are also
more specialized theories of learning such as Hullian learning theory as
developed by Hull (1943), which elaborately relates concepts including
work, energy, reinforcement, and response. While the aim of all such
theories is to help understand and explain the process of learning, the
diversity of learning approaches and contexts makes any particular learn-
ing theory difficult to generalize.
KEY WORDS Learning processes, individuals
IMPLICATIONS
Theoretical perspectives on learning continue to attract the interest and
attention of marketers as such perspectives can often provide unique
insights into how marketing activities can be developed and imple-
mented to enhance consumer learning about the marketer’s offerings.
While there are multiple theoretical approaches, marketers can never-
theless aim to understand better such approaches, particularly when
their views are argued to be relevant to particular marketing activities
such as sales promotions or advertising.
APPLICATION AREAS AND FURTHER READINGS
Learning
Kolb, David A., Boyatzis, Richard E., and Mainemelis, Charalampos (2000). ‘Expe-
riential Learning: Previous Research and New Directions,’ in R. J. Sternberg and
L. F. Zhang (eds.), Perspectives on Cognitive, Learning, and Thinking Styles. Mahwah, NJ:
Lawrence Erlbaum Associates.
Marketing Communications
Rothschild, Michael L., and Gaidis, William C. (1981). ‘Behavioral Learning Theory:
Its Relevance to Marketing and Promotions,’ Journal of Marketing, 45(2), Spring,
70–78.
297 least effort, principle of
Weiss, R. F. (1968). ‘An Extension of Hullian Learning Theory to Persuasive Com-
munication,’ in A. G. Greenwald, T. C. Brock, and T. M. Ostrum (eds.), Psychological
Foundations of Attitudes. New York: Academic Press.
BIBLIOGRAPHY
Ormrod, J. E. (2003). Educational Psychology: Developing Learners, 4th edn. Upper Saddle
River, NJ: Merrill-Prentice Hall.
Skinner, B. F. (1938). The Behavior of Organisms: An Experimental Analysis. New York:
Appleton-Century.
Hull, C. L. (1943). Principles of Behavior. New York: Appleton-Century-Crofts.
least effort, principle of
DESCRIPTION
The view that in an individual’s efforts to achieve a goal, the individual will
generally seek a method involving the minimum expenditure of effort or
energy.
KEY INSIGHTS
The principle of least effort has been put forth in contexts including
human ecology (Zipf 1949), cognitive processes (Allport 1954), and, most
recently, information search (Mann 1987). While each of these contexts
shares the same general view of individuals minimizing their effort when
striving to achieve their goals, the differing contexts suggest different
methods of goal achievement. Mann (1987), for example, considers the
principle in the context of search approaches, and therefore emphasizes
that individuals will tend to use the most convenient search method and
in the least exacting mode available.
KEY WORDS Behavior, effort, individuals
IMPLICATIONS
The principle of least effort is of considerable importance to marketers
since it suggests consumers will tend to follow the path of least resistance
in their search and purchase behaviors, all else being equal. Minimizing
consumer search effort and maximizing convenience and ease of use (e.g.
in terms of physical distance traveled or time required to find sought-
after information) can therefore be strategic aims of marketers who seek
to take advantage of consumers’ systematic tendencies to minimize effort
and energy in their goals to be satisfied.
APPLICATION AREAS AND FURTHER READINGS
Consumer Behavior
Woods, Walter A. (1960). ‘Psychological Dimensions of Consumer Decision,’ Journal
of Marketing, 24(3), January, 15–19.
Hubbard, Raymond (1978). ‘A Review of Selected Factors Conditioning Consumer
Travel Behavior,’ Journal of Consumer Research, 5(1), June, 1–21.
Larsen, Otto N., and De Fleur, Melvin L. (1987). The Flow of Information. New
Brunwick, NJ: Transaction Publishers.
BIBLIOGRAPHY
Zipf, G. K. (1949). Human Behaviour and the Principle of Least Effort: An Introduction to
Human Ecology, 1st edn. Hafner reprint, New York: Addison-Wesley.
least interest, principle of 298
Allport, G. W. (1954). The Nature of Prejudice. Cambridge, Mass.: Addison-Wesley.
Mann, Thomas (1987). A Guide to Library Research Methods. Oxford: Oxford University
Press.
least interest, principle of
DESCRIPTION
A principle stating that the person who is the least interested in the continua-
tion of a relationship is able to dictate the conditions of association.
KEY INSIGHTS
Put forth and developed by Waller (1938), the principle of least interest
suggests that power in any relationship lies with the least interested indi-
vidual. The principle also suggests that such an individual is in a position
to exploit those most interested in the relationship’s continuation. As
such, the principle can be considered to be a generalized view of what
Ross (1921) termed the ‘law of personal exploitation,’ namely, that ‘in
any sentimental relation, the one who cares less can exploit the one who
cares more.’ While such views originated in a sociological context, they
have since been extended to contexts beyond marital relationships to
provide insights into areas including effective working relationships and
bargaining.
KEY WORDS Exchange relationships, power
IMPLICATIONS
Marketers concerned with understanding or evaluating the nature of
power in any exchange relationship may benefit from a greater know-
ledge of the principle of least interest. In particular, the principle sug-
gests that power depends on the relative interests of parties to an
exchange relationship. As such, the principle can be viewed as applicable
in explaining power in exchange relationships occurring not only at the
level of the individual but also the level of the organization as well as
the level of broader economic or political entities such as nations where
exchange relationships are present.
APPLICATION AREAS AND FURTHER READINGS
Marketing Management
Anderson, James C., and Narus, James A. (1984). ‘A Model of the Distributor’s
Perspective of Distributor–Manufacturer Working Relationships,’ Journal of Mar-
keting, 48(4), Autumn, 62–74.
Cook, Karen S., and Emerson, Richard M. (1978). ‘Power, Equity and Commitment
in Exchange Networks,’ American Sociological Review, 43(5), October, 721–739.
Marketing Research
Beniger, James R. (1980). ‘Using the Principle of Least Interest to Derive a Domi-
nance Hierarchy from Interaction or Exchange Data,’ American Statistical Associa-
tion, Proceedings of the Survey Research Methods Section (SRMS).
Consumer Behavior
Webster, C., and Reiss, M. C. (2001). ‘Do Established Antecedents of Pur-
chase Decision-Making Power Apply to Contemporary Couples?,’ Psychology and
Marketing, 18(9), 951–972.
299 lifestyle marketing
BIBLIOGRAPHY
Waller, W. (1938). The Family: A Dynamic Interpretation . New York: Gordon.
Ross, Edward A. (1921). Principles of Sociology. New York: Century.
leisure class, theory of the see conspicuous consumption
Lewin’s field theory see field theory
life cycle see product life cycle
life-cycle segmentation see segmentation
lifestyle marketing
DESCRIPTION
Marketing based on knowledge of individuals’ actual or desired patterns of
living, in areas including their activities and interests.
KEY INSIGHTS
Lifestyle marketing is concerned with understanding the lifestyles of
consumers, as demonstrated by consumers’ preferences and behaviors in
their social relations, consumption, entertainment, dress, and the like,
and using such an understanding as a central element in an organ-
ization’s marketing efforts. Given that consumers’ lifestyles are deter-
mined in part by their values and attitudes, lifestyle marketing neces-
sarily involves understanding not only particular lifestyle patterns but an
understanding of the drivers of such patterns as well. Lifestyle marketing
can emphasize how a firm’s offerings can assist consumers with leading
lifestyles they would like to have or it can be based on reinforcing a
lifestyle a consumer is already leading. Lifestyle marketing may be the
primary focus of a firm’s efforts or it may be a part, as when lifestyle
market segmentation is combined with other segmentation approaches.
(See segmentation.)
KEY WORDS Consumer interests, consumer activities, consumer values
IMPLICATIONS
Marketers may benefit from assessing how and to what extent a market-
ing approach based on lifestyle marketing may assist the marketer’s firm
in reaching existing markets and developing new markets for the firm’s
offerings.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Cahill, Dennis J. (2006). Lifestyle Market Segmentation. New York: Haworth Press.
Consumer Behavior
Englis, Basil G., and Solomon, Michael R. (1995). ‘To Be and Not to Be: Lifestyle
Imagery, Reference Groups and the Clustering of America,’ Journal of Advertising,
24, Spring, 13–28.
Swenson, C. A. (1990). Selling to a Segmented Market: The Lifestyle Approach. New York:
Quorum Books.