For the third time, the European Marketing Academy (EMAC) and the McKinsey & Company management consultancy have awarded the "EMAC McKinsey Marketing Dissertation Award" for outstanding research in the field of marketing. The award was made public at the EMAC Annual Conference gala dinner in Ljubljana on Friday, May 27, 2011.
The first-place winner, Carlos Jorge da Silva Lourenço, earned a EUR 7,000 cash prize for the dissertation he submitted to Tilburg University in the Netherlands. His research deals with the dynamic formation of store price image and its determinants, as well as its impact on store choice. Lourenço is currently teaching consumer marketing research at the Rotterdam School of Management (RSM), Erasmus University, the Netherlands, and is the academic director of the RSM master's program in marketing management. Goran Vlašić, who wrote his dissertation at Bocconi University in Milan, Italy, and now lectures at the University of Zagreb, Croatia and University of Sussex, UK, took second place. Vlašić's thesis points out the important role of marketing managers as makers of strategic choices who proactively manage the markets, rather than mere processors of market information who adjust to market conditions. Third place went to Dominik Mahr, who wrote his dissertation at the University of Antwerp, Belgium and is currently teaching marketing and innovation management at Maastricht University, the Netherlands. His dissertation examines the nature, process, tools, and impact of customer co-creation of knowledge during firms' innovation processes. The second- and third-place finishers received prizes of EUR 3,000 and EUR 1,000 respectively.
This year, about 60 young scholars from 20 countries took part in the program. The authors of the top three entries were invited to the final round at the EMAC conference in Ljubljana. They presented their work to a four-person jury of EMAC professors and McKinsey marketing experts and answered questions posed by the jury members. In judging the presentations, the jury considered the novelty, relevance, and conceptual rigor of the participants' dissertations.
Carlos Lourenço, Tilburg University, The Netherlands
Dynamic Store Price Image Formation and Category Pricing
Despite the importance of Store Price Images (SPI) and the large sums involved in managing them, research about the topic is sparse and has left retailers with little guidance for setting their pricing and SPI strategies. The main contributions of this research are twofold. First, it proposes a framework that grants product categories a greater role in shaping SPIs and examines what drives these effects. Specifically, it identifies characteristics typical of “lighthouse categories,” i.e., product categories that strongly signal low store prices, yet make up only a small portion of store spending. Second, we empirically test this framework by estimating a dynamic model of SPI formation, including category prices, based on a unique data set. This data set combines information on weekly store visits and purchases from a representative panel of households with semiannual store price perceptions of these same households. The data cover all major retail chains in the Netherlands (close to 20 chains), contain information on purchases and weekly prices in these stores for nearly 50 major product categories, and cover a period of four years. A number of the findings bring surprising new insights to light. For instance, counter to conventional wisdom, lighthouse categories are not fresh food items but those related to home and personal care – products for which there are strong incentives to track prices, e.g., because of the large price spreads. Managerial implications of the findings are discussed.
Goran Vlasic, Bocconi University, Milan, Italy
Essays on Market-Driving Strategies: The Customer Is King, but Who Is the Grand Vizier?
Ever since the concept of market orientation was developed, providing managers with a framework for managing sustainable competitive advantage, firms have increasingly recognized customers as their kings and asserted customer centricity as a key value. In particular, firms have focused on innovations – delivering better products on dimensions that consumers consider meaningful, relevant, and valuable. However, firms should not simply wait for and adjust to the king’s random choices, but take a role of grand viziers – educating customers on how to make choices. Such an approach gives rise to a new competitive landscape in which firms do not merely compete to uncover and adjust to consumers’ utility function, but to manage consumer preferences and create an asymmetric preference structure (i.e., utility function) favoring the focal product. To be successful, firms need to compete simultaneously in these two distinct (but interconnected) competitive landscapes, as each has a different impact on different measures of performance (short term versus long term; marketing versus financial) throughout the product’s life cycle and is differently suited to various consumers, products, and environmental conditions. In order to pursue these strategies, firms need to be aware of factors at four levels – the individual (CEO and star marketer), department, firm, and industry – that are likely to favor one strategy versus the other. The thesis concludes that firms should not merely be king’s servants, and reveals paths for firms to become the king’s most trusted advisors. As a result, it points out an important role of marketing managers as strategic choice-makers who proactively manage the markets, rather than mere market information processing units who adjust to market conditions.
Dominik Mahr, Antwerp University, Belgium
Customer Co-Creation of Knowledge during the Innovation Process
A firm’s growth and profitability depend on the creation and use of knowledge during the innovation process. Increasingly, firms supplement their internal innovation efforts by tapping into the knowledge and skills of external partners. As buyers of the firm’s products and services, customers represent a unique source of such external knowledge. Increasingly digitalized communication provides firms with new opportunities to cocreate knowledge with their customers. This dissertation examines the nature, process, and impact of customer co-creation of knowledge during firms’ innovation processes. Drawing on theories of innovation, organizational knowledge creation, marketing, and communication, this research encompasses three studies that pose separate research questions and apply complementary views and methodologies to address them. Study 1 investigates how firms use and benefit from knowledge co-created by customers in innovation projects. Customer co-creation seems most effective for the creation of highly relevant but moderately novel knowledge. Study 2 centers on the interaction process between firms and specific customers (i.e., lead users) by assessing the value of their contributions in a virtual B2C community. The greatest value stems from contributions that suggest solutions to lead users’ needs and contain explicit descriptions of new functions. The focus of Study 3 is customers as individuals beyond the firms’ boundaries and examines their creative and deliberate problem-solving routines. Their effectiveness is contingent on available information on the problem’s context and on the temporal resources invested. The dissertation concludes with a summary of the studies’ contributions and directions for further research. It also offers recommendations for firms investing in collaborative competences and online platforms in terms of understanding the differential impact of customer co-creation, identifying appropriate customers, and choosing the right media.