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    Item type:Publication, Access status: without files ,
    The ugly side of customer management – Consumer reactions to firm-initiated contract terminations
    (Elsevier, 2017-02-20)
    Lepthien, Anke
    ;
    Papies, Dominik
    ;
    Clement, Michel
    ;
    Melnyk, Valentyna
    Many firms apply “customer demarketing” strategies and dismiss unprofitable customers. However, empirical research on the consequences of dismissing customers is scarce. We address this research gap and develop and empirically analyze a theoretical framework of consumer reactions to customer demarketing based on the theory of dual entitlement. We conduct seven experiments in which we identify the main effect of observing customer demarketing and analyze several moderating and mediating factors. In addition, we use a field study to illustrate the consequences of experiencing a contract termination in a real-world setting, in which a firm terminated contracts for > 10.000 customers. The results show that consumers disapprove of customer demarketing, regardless of whether they experience it themselves or only observe it, regardless of the responsibility for the cause of the contract termination, and regardless of the social proximity to the dismissed customers. The effect is, however, somewhat weaker if customer demarketing is perceived to be a common occurrence, if alternative offers are made, and if the financial cause is framed as a loss. Furthermore, firms can dampen the negative effect of customer demarketing by offering substantial monetary compensation to dismissed customers. We identify perceived fairness of the firm's behavior as the underlying process that causes the negative effects of customer demarketing, and this also holds when we control for potential alternative mediators (i.e., warmth and competence perceptions).
    Publicationtype: Journal Article
      211
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    Item type:Publication, Access status: without files ,
    The impact of brand extension success drivers on brand extension price premiums
    (Elsevier, 2010-12-01)
    Sattler, Henrik
    ;
    Völckner, Franziska
    ;
    Riediger, Claudia
    ;
    Ringle, Christian M.
    Research into brand extensions has mainly focused on consumers' extension evaluations without considering an important financial implication: the ability of the extension product to charge a price premium. This study analyzes (1) the extent to which consumers are willing to pay a price premium for the extension product and (2) the impact of potential success drivers on consumers' attitudes toward the extension and the extension price premium. The results show, for example, that perceived advertising support positively influences consumers' attitudes toward the extension, but it does not directly affect the magnitude of the brand extension price premium. Furthermore, this study reveals monetary effects associated with these success drivers (i.e., parent brand quality, perceived fit, marketing support for the brand extension, and consumer experience with the extension category), which offer important information regarding how to allocate resources to various success drivers. For example, brand investments that increase perceptions of parent brand quality by one unit (seven-point scale) tend to enhance the brand extension price premium of typical fast moving consumer goods (average price of €2.04 in the study sample) by €.208, all else being equal.
    Publicationtype: Journal Article
      110