Journal of Retailing and Consumer Services 74 (2023) 103445

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Journal of Retailing and Consumer Services

journal homepage: www.elsevier.com/locate/jretconser

Driving marketing outcomes through social media-based

customer engagement
Viktorija Kulikovskaja a, b, Marco Hubert a, *, Klaus G. Grunert a, c, Hong Zhao b
a
Department of Management, Aarhus University, Denmark
b
University of Chinese Academy of Sciences, Sino-Danish College, China
c
University of Vaasa, Finland

A R T I C L E I N F O A B S T R A C T

Handling Editor: Prof. H. Timmermans Firms recognize the increasing potential of digital services to enhance customer engagement behaviors. Drawing
on customer engagement and user gratification theory, two studies were conducted among Chinese consumers:
Keywords: an online survey and a field study. The results reveal varying effects of content types on customer engagement
Customer engagement and underline a mediating role of engagement between content types and marketing outcomes. It is worth noting
Customer loyalty
that the relational content type displays greater mediating effects compared to other content types. The findings
Word-of-mouth
provide new insights for development of digital content marketing strategies to enhance customer engagement
Social media
Uses and gratification theory and thereby generate marketing outcomes.

1. Introduction firm/brand-related content (Hollebeek et al., 2014; Hollebeek and

The widespread customer adoption of digital innovations has
changed the nature of customer/firm interactions (i.e., Horakova et al.,
2022). In 2022, over 4.5 billion people were using social media world­
wide, and the number is projected to increase to nearly 6 billion in 2027
(Statista, 2022a). In contrast to social media platforms in Western
countries that lean towards application (app) constellations, the widely
used social media app in China, WeChat, represents an app ecosystem of
“apps-within-an-app” (Chan, 2015). WeChat reached over 1.31 billion
monthly active users in the third quarter of 2022 (Statista, 2022b)
connecting its users, digital content, and a wide variety of services from
ordering food, booking a table at restaurants to finding geo-targeted
coupons (OECD, 2019). Due to growing social media penetration in
customers’ lifestyle, China represents an appropriate contextual setting
to study.
Firms are boosting their investments in digital services and digital
marketing activities to create and deliver value for customers through
these efforts (Dolega et al., 2021; Nöjd et al., 2020; Rahman et al., 2023).
Customers in return generate value for firms directly through their
purchase and indirectly through multiple forms of customer engagement
(CE) (Islam et al., 2019; Kumar and Reinartz, 2016). CE in marketing
refers to the interaction between a customer as an engagement subject
and a focal engagement object, including a firm/brand or
Macky, 2019). Scholars define CE as a customer’s cognitive and
emotional absorption resulting from specific interactions with a firm or
brand (e.g., Brodie et al., 2011) and manifesting in customer behaviors
that have the brand or service focus (e.g., Algharabat et al., 2020; Islam
et al., 2019). Moreover, in the social media context, CE is expected to
foster the impact of firms’ marketing activities on marketing outcomes,
e.g., word-of-mouth (WOM) and customer loyalty (Santini et al., 2020;
Wang and Lee, 2020).
Marketing practitioners and scholars have therefore begun to explore
the CE concept in the social media context (Brodie et al., 2011, 2013)
and its role as a mediator for marketing outcomes (Santini et al., 2020).
However, the marketing literature provides inconsistent (positive,
negative, or insignificant) findings regarding the relationship between
content-related antecedents (e.g., distinct content types) and CE be­
haviors (e.g., distinct social media-based CE behaviors). The theoretical
foundation is relatively underdeveloped and measurement of engage­
ment largely varies (Santini et al., 2020). Also, CE research has mainly
been conducted in Western countries rather than in Eastern countries, e.
g., China (Huang et al., 2022; Islam and Rahman, 2016).
Relatedly, this research makes the following contribution to the
marketing and customer engagement literature. First, we respond to the
research call for investigation of how social media marketing content
stimulates social media-based CE (Gavilanes et al., 2018), and in turn

* Corresponding author.
E-mail address: mah@mgmt.au.dk (M. Hubert).

https://doi.org/10.1016/j.jretconser.2023.103445
Received 16 February 2023; Received in revised form 17 May 2023; Accepted 30 May 2023
Available online 11 June 2023
0969-6989/© 2023 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
V. Kulikovskaja et al.
generates marketing outcomes. Some social media marketing efforts will
fail, unless firms understand how to effectively create digital marketing
strategies to facilitate CE (Lee et al., 2014) and subsequently achieve
marketing outcomes (Lal et al., 2020). Potential consequences of having
highly engaged customers include improved customer satisfaction,
advocacy, and loyalty (Brodie et al., 2013; van Doorn et al., 2010). Yet,
more research on the consequences of CE in the social media context is
needed (Beckers et al., 2018; Gavilanes et al., 2018; Lal et al., 2020). We
extend the prior research of Cvijikj and Michahelles (2013), De Vries and
Carlson (2014), first, by adding two consequence variables (e.g., WOM,
customer loyalty) and examining not only the direct but also mediating
effects of CE between its antecedents (e.g., content types) and conse­
quences and, second, by complementing consumer self-reported data
from a survey study with behavioral data from a field study.
Second, the present research captures valence of engagement by
focusing on positively and negatively engagement behaviors that may
influence marketing outcomes. This research therefore responds to the
recent call to explore the negative side of engagement (Obilo et al.,
2020).
Third, our study offers valuable insights into the impact of digital
marketing strategies and customer engagement (CE) behavior on social
media in the Chinese market. Given the high level of social media
penetration in China, coupled with its integration into customers’ daily
lives, this context provides a suitable setting for our investigation.
Notably, unlike social media platforms in Western countries that tend to
mainly consist of app constellations, WeChat – the most widely used
social media app in China – represents an app ecosystem that allows
firms to create official accounts within the platform. As such, many
product and service firms, including retailers and restaurants, leverage
WeChat to enhance brand awareness and engage with customers
through their accounts. However, firms recognize the importance of
obtaining a better understanding of the effective utilization of social
media to drive customer engagement and improve overall customer
experiences (DiPietro et al., 2012; Huang et al., 2022).
Fourth, research on social media in the service sector predominantly
focused on social media use by hotel and tourism firms (i.e., Abbasi
et al., 2023; Chan and Guillet, 2011) while less research has been done
on social media use for marketing in restaurants (i.e., DiPietro et al.,
2012; Nilashi et al., 2021). Therefore, the studies investigating CE in the
restaurant setting are scarce (Odoom et al., 2017). This research focuses
on development of social media marketing to facilitate CE and greater
WOM and customer loyalty towards a restaurant.
The paper is structured as follows. First, we present the theoretical
background and the conceptual framework of CE. Second, we describe
the methodology for the empirical analyses. Third, we present results.
Finally, we discuss the results and implications of our findings. We
conclude with limitations and future research directions.
2. Theoretical background
Previous research has demonstrated the importance of firm’s social
media content in fostering CE. Table 1 provides an overview of relevant
research in the context of interaction between different social media
content types, forms of CE, and marketing outcomes, however empirical
studies are sparse on the mediating role of CE between content-related
antecedents and consequences (see Table 1). This research builds on
the uses and gratifications theory (UGT) and theory of CE marketing to
examine how customers engage with firm’s social media content and
how their engagement generates marketing outcomes.
2.1. Uses and gratifications theory (UGT) and its application to social
media content
UGT provides a theoretical framework to explain why and how in­
dividuals deliberately use media to satisfy their needs (Katz et al., 1973).
UGT offers a user-centered view to reveal social and psychological needs
2
Journal of Retailing and Consumer Services 74 (2023) 103445
that create individuals’ expectations from media and eventually lead to
different patterns of media use, which then result in gratification of
needs (Katz et al., 1973). A growing stream of research has employed
UGT into the social media context, attempting to explain individuals’
psychological motives and perceived values for using social media
(Muntinga et al., 2011; Rohm et al., 2013). With regards to firm’s
communication and service strategy, the delivery of varying content
types and services is expected to gratify customer needs or deliver their
perceived values, and thus stimulate CE on social media (Khan, 2017).
Based on prior research (Cvijikj and Michahelles, 2013; Gavilanes et al.,
2018; Tafesse, 2015), we identify three content types: infotainment
content, remunerative content, and relational content.
First, infotainment content refers to content that “delivers information
and/or entertains users with new, factual, useful, educational, and/or
interesting information.” (Gavilanes et al., 2018, p. 7). For example,
marketers can design a social media post with informational content
elements e.g., text, in order to inform customers about the products and
their performance. Marketers can also include entertaining elements e.
g., videos, photos, audio sounds, to augment the content of the brand
campaigns in order to catch customers attention, create brand associa­
tions and offer nonmonetary gratification of escapism, and enjoyment.
Yet, there seems to be a lack of consensus in prior studies regarding
whether to identify informational content and entertaining content as
two separate constructs (Cvijikj and Michahelles, 2013; Meire et al.,
2019) or merge them into a single construct, namely infotainment content
(Gavilanes et al., 2018). We propose infotainment content (see Gavilanes
et al., 2018) due to potential overlap between content informativeness
and entertainment and entertaining properties embedded in the content
being perceived as informational and vice versa. This content type is an
important motive for customers to adopt a social media platform (Khan,
2017).
Second, remunerative content refers to “the extent to which the social
media content provides monetary or incentive rewards” (Dolan et al.,
2019, p. 2218). For example, marketers can design social media post
with monetary elements, e.g., discounts or vouchers that can be claimed
at the point of purchase. The provision of monetary incentives offered by
the firm, such as sales promotions and discounts, appear among the
reasons for consumer-firm interaction on social media (Cvijikj and
Michahelles, 2013; Rohm et al., 2013).
Third, relational content refers to “the extent to which the social
media content meets the consumer’s need for integration and social
interaction and desire for social benefits” (Dolan et al., 2019, p. 2218).
Marketers can incorporate a structured task to customers requesting to
refer a friend, create a video, design a new product idea. For example,
“#PlayWithPringles” campaign asked customers to produce and upload
creative video content on TikTok about their Pringles product experi­
ence. Customers could interact with others, like, share, and comment on
the videos. This has enabled Pringles to reach customers in their homes
and elevate digital socializing (Blut et al., 2023). Firms ought to support
as much interactivity as possible through exclusive content,
call-to-action with the relational focus to trigger customer-to-content,
customer-to-firm as well as customer-to-customer interaction (Carlson
et al., 2018; Demmers et al., 2020; Harmeling et al., 2017).
2.2. Customer engagement
Customer engagement (CE) has evolved as an important concept in
the marketing literature, particularly due to the rise of social media that
enables interaction with a firm and other customers. CE’s conceptual
roots predominantly reside in the relationship marketing and service-
dominant logic literature (e.g., Lusch et al., 2016) that highlights the
interactive nature of the concept. CE refers to the interaction between a
customer as an engagement subject and a focal engagement object such
as a firm/brand or firm/brand-related content (Hollebeek et al., 2014;
Hollebeek and Macky, 2019) This research examines CE with firm’s
social media content as an engagement object. Concerning
V. Kulikovskaja et al. Journal of Retailing and Consumer Services 74 (2023) 103445

Table 1
Relevant customer engagement literature.
Article Type of Research Context Theoretical perspective Social Media Positive Negative Marketing
Content Engagement Engagement Outcomes

Current study Empirical WeChat, UGT, relational marketing, CE Infotainment Positive Negative WOM,
Quantitative Service theory content contribution contribution Customer
industry, Remunerative (Likes, Shares, (Likes, Shares, loyalty
restaurants content Comments), Co- Comments),
Relational content creation Dormancy,
Disengagement
Demmers et al. Empirical Facebook UGT Informational Positive
(2020) Qualitative Multiple content-oriented contribution
(netnography) event pages (information (Likes, Shares,
value) Comments)
Entertaining
content-oriented
(entertaining
value)
Relational
content-oriented
(activation)
Athwal et al. (2019) Empirical, Facebook, UGT Informational Positive
Qualitative Instagram content-oriented contribution
(online and Twitter, (cognitive needs)
observations and Luxury Entertaining
interviews) fashion content-oriented
brands (affective needs)
Dolan et al. (2019) Empirical, Facebook, UGT Informational Positive
Qualitative Wine brand content contribution
(netnography) page Remunerative (Likes, Shares,
content Comments)
Entertaining Consumption
content
Relational content
Meire et al. (2019) Empirical, Facebook, / Informational Positive Negative Purchase
Quantitative Soccer content contribution contribution
(online team’s fan Entertaining (positive (negative
experiment) page content comments) comments)
Carlson et al. (2018) Empirical, Facebook, Stimulus–organism–response, Informational Co-creation
Quantitative Multiple (S–O-R) model content-oriented (feedback
(survey) brand pages (brand learning intention),
value) Positive
Entertaining contribution
content-oriented (collaboration
(hedonic value) intention)
Relational
content-oriented
(sociability,
interactivity,
entitativity value)
Gavilanes et al. Empirical, Facebook / Infotainment Positive Negative
(2018) Quantitative Sales contribution contribution
New product (Likes, Shares, (Hide, Close,
announcement Comments), Unlike)
Current product Consumption
display (Clicks)
Sweepstakes and
contests
Customer
feedback
Organization
branding
Gan (2017) Empirical, WeChat UGT Informational Positive
Quantitative content-oriented contribution
(survey) (information (liking behavior)
seeking)
Entertaining
content-oriented
(enjoyment)
Relational
content-oriented
(social support)
Khan (2017) Empirical, YouTube UGT Informational Co-creation Negative
Quantitative content-oriented (uploads), contribution
(survey) (information Positive (dislikes)
seeking motive, contribution
(Likes, Shares,
(continued on next page)

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V. Kulikovskaja et al. Journal of Retailing and Consumer Services 74 (2023) 103445

Table 1 (continued )
Article Type of Research Context Theoretical perspective Social Media Positive Negative Marketing
Content Engagement Engagement Outcomes

information Comments),
giving motive) Consumption
Entertaining (views, reads)
Relational content- content-oriented
oriented (social (relaxing
interaction entertainment
motive) motive)
Tafesse (2015) Empirical, Facebook, UGT Informational Positive
Qualitative Multiple content contribution
(netnography) brand pages Entertaining (Likes, Shares)
Quantitative content
(statistical Remunerative
analysis) content
(transactional
content)
Relational
content-oriented
(interactivity)
de Vries and Carlson Empirical, Facebook, UGT, Involvement And self- Informational Positive Brand loyalty
(2014) Quantitative Multiple brand congruency theory content-oriented contribution
(survey) brand pages (functional value) (Likes, Shares,
Entertaining Comments)
content-oriented
(hedonic value)
Relational
content-oriented
(social value, co-
creation value)
Cvijikj and Empirical, Facebook, UGT Informational Positive
Michahelles Qualitative Multiple content contribution
(2013) (netnography) brand pages Entertaining (Likes, Shares,
content Comments)
Remunerative
content
Relational
(interactivity)
Rohm et al. (2013) Empirical, Facebook UGT Informational Positive
Qualitative and Twitter, content-oriented contribution
(social media Multiple (motivation for
diary), brand pages product
Quantitative information)
(latent class Entertaining
analysis) content-oriented
(motivation for
entertainment)
Relational
content-oriented
(motivation for
identification
with or
connection to the
brand)
Remunerative
(motivation for
incentives and
promotions)
de Vries et al. (2012) Empirical, Facebook, / Informational Positive Negative
Quantitative Multiple content contribution contribution
(survey) brand pages Entertaining (Likes, (share of
content Comments) negative
Relational comments)
(interactivity and
valence)
Gummerus et al. Empirical, Facebook, / Entertaining Positive Satisfaction,
(2012) Quantitative Gaming content-oriented contribution Loyalty
(survey) brand (entertainment (Likes,
community benefits) Comments,
Remunerative playing/spending
content-oriented behaviors,
(economic Consumption
benefits) (reads)
Relational
content-oriented
(social benefits)
(continued on next page)

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Table 1 (continued )
Article Type of Research Context Theoretical perspective Social Media Positive Negative Marketing
Content Engagement Engagement Outcomes

Jahn and Kunz Empirical, Facebook UGT Informational Positive Brand loyalty
(2012) Qualitative Multiple content-oriented contribution (fan- (brand
(netnography, brand pages (functional value page commitment,
focus groups) Entertaining engagement), WOM behavior,
and quantitative content-oriented Consumption purchase
(survey) (hedonic value) (fan-page usage intention)
Relational intensity)
content-oriented
(social interaction
value, brand
interaction value)
Muntinga et al. Empirical, Facebook, UGT Informational Co-creation,
(2011) Qualitative YouTube content-oriented Positive
(interviews) and Twitter (motivation for contribution
information) Consumption
Entertaining
content-oriented
(motivation for
entertainment)
Remunerative
content-oriented
(motivation for
remuneration
Relational
content-oriented
(motivation for
integration and
social interaction)

dimensionality of the CE construct, extant research lacks clarity. One
research stream uses a behavioral perspective to study CE in terms of
engagement behaviors (Pansari and Kumar, 2017). Another research
stream considers a multi-dimensional perspective to study engagement
integrating emotional, cognitive, and behavioral dimensions. Although
the multidimensional perspective provides a broader conceptualization,
in this research, we adopt a behavioral perspective of CE to exclusively
study CE behaviors on social media. CE behaviors have been defined as
“customers’ behavioral manifestations that have a brand or firm focus,
beyond purchase, resulting from motivational drivers” (van Doorn et al.,
2010, p. 254). We recognize that behavioral manifestations can have
different intensity levels (low, moderate, high) and valence (positive,
negative) (Gavilanes et al., 2018). Many scholars have assessed CE using
positively valenced measures (Hollebeek et al., 2014) that have low to
high intensity levels, e.g., content consumption, contribution, and cre­
ation (Schivinski et al., 2016). Others have focused on content popu­
larity using social media metrics, e.g., Likes, Comments and Shares
(Swani and Labrecque, 2020).
In the social media context, scholars suggest that lower intensity
levels reflect passive forms of engagement (consumption) while higher
levels relate to active forms (creation) (Schivinski et al., 2016; Khan,
2017). Co-creation as a behavioral manifestation of engagement (Bij­
molt et al., 2010) represents a high engagement level, for example,
customers creating firm-related content or suggestions to improve a
firm’s products or services (Schivinski et al., 2016). Both positive and
negative contribution reflect a moderate engagement level, for example,
customers’ contributing to firm-related content previously created by
either the firm or another customer (Schivinski et al., 2016). Contribu­
tion can be measured by social media metrics, e.g., Likes, Shares and
Comments (Demmers et al., 2020). Disengagement reflects temporary or
permanent termination of an individual’s interaction with an engage­
ment object (Bowden et al., 2015). Dormancy reflects a temporarily
inactive state of engagement (van Doorn et al., 2010; Brodie et al.,
2011). However, the latter forms of engagement, i.e., disengagement
and dormancy remain largely unexplored in the marketing literature to
date (Bowden et al., 2015).
Based on the above rationale, in this research we anticipate obtain­
ing a comprehensive understanding of the nature of social media-based
CE by integrating five engagement forms, e.g., co-creation, positive
contribution, negative contribution, dormancy and disengagements as
well as examining how aforementioned content types can affect mar­
keting outcomes through activation of these engagement forms.
2.3. Marketing outcomes: customer loyalty and word-of-mouth
Based on the relationship marketing literature, managing CE is
argued to enhance the key relationship marketing outcomes: customer
loyalty and WOM (Kumar et al., 2010; Kumar and Reinartz, 2016).
Scholarly research has demonstrated that customer experience exerts a
positive impact on CE, thereby resulting in heightened customer loyalty
(Leckie et al., 2016; Roy et al., 2020). This highlights the potential of
customer engagement as a powerful means to enhance customer loyalty,
especially when complemented with a favorable customer experience.
In the current literature, conceptualization of customer loyalty varies
across studies. Some studies focus on attitudinal loyalty (Leckie et al.,
2016) whereas others examine behavioral loyalty (Romaniuk and
Nenycz-Thiel, 2013). Some scholars consider positive WOM as a
component of loyalty (Zeithaml et al., 1996) whereas others argue for
treating WOM and repurchase intentions as two discrete constructs (de
Matos and Rossi, 2008). In this research, we operationalize customer
loyalty as a separate construct from WOM and define it as a customer’s
positive attitude and behavior towards a firm/brand and it is manifested
in a customer’s tendency to repurchase a preferred firm/brand (Oliver,
1999). According to Hennig-Thurau et al. (2004), WOM in the online
context is defined as “any positive or negative statement made by po­
tential, actual, or former customers about a product or company, which
is made available to a multitude of individuals” (p. 39). While WOM can
be positive or negative, firms are interested in promoting positive WOM.
Positive WOM might include making positive recommendations to
others about a firm (Brown et al., 2005).

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V. Kulikovskaja et al.
3. Hypotheses development
The hypothesis development draws on UGT (Katz et al., 1973) and
CE marketing theory (Blut et al., 2023; Harmeling et al., 2017; Holle­
beek et al., 2014). Based on the theoretical background, customers are
expected to exhibit different engagement behaviors on social media
because of motivational influences that tend to drive their behaviors
(Khan, 2017). In line with UGT, different CE behaviors can result from
customer interaction with different content types on social media (Cvi­
jikj and Michahelles, 2013; Gavilanes et al., 2018; Muntinga et al.,
2011); this in turn might influence their WOM and loyalty. Thus, the
conceptual framework presented in this study consists of interrelation­
ships between three content types (e.g., infotainment, remunerative,
and relational content), five CE behaviors (e.g., positive CE: co-creation,
positive contribution; negative CE: dormancy, negative contribution,
and disengagement), and two marketing outcomes (e.g., WOM and
customer loyalty) (see Fig. 1).
3.1. Infotainment content, customer engagement and marketing outcomes
Previous research shows that infotainment content type positively
influences customer attitudes toward social media advertising and can
be engaging because of information and entertainment gained (Rohm
et al., 2013). Empirical studies, which employed the UGT framework,
have found information and entertainment relate to passive engagement
on social media, as customers passively consume content (e.g., read
posts and comments) (Dolan et al., 2019; Jahn and Kunz, 2012; Khan,
2017). Customers consume content as a source of information for
making well-informed buying decisions, getting new ideas or being
entertained (Gummerus et al., 2012; Muntinga et al., 2011). Moreover,
infotainment content can stimulate customer contributing behaviors
through Likes, Comments, and Shares (Cvijikj and Michahelles, 2013;
Dolan et al., 2019; Khan, 2017; Muntinga et al., 2011). However, studies
show varying effects (positive or insignificant) regarding these
engagement metrics (Cvijikj and Michahelles, 2013; Dolan et al., 2019;
Khan, 2017). For instance, Khan (2017) found that customers with in­
formation seeking motives contribute to the content through likes and
comments but not shares; on the other hand, customers with information
giving motives contribute to the content through all three metrics.
Despite limited research on consequences, customers might reinforce
marketing outcomes through positively valenced engagement behaviors
Fig. 1. Conceptual framework.
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Journal of Retailing and Consumer Services 74 (2023) 103445
(i.e., positive contribution), by liking, commenting, or sharing info­
tainment content with others (Agrawal and Mittal, 2022; Gummerus
et al., 2012; Santini et al., 2020). Previous studies exhibit a positive
effect of CE behaviors on social media and WOM activities (Chu et al.,
2019). Moreover, scholars recognize CE as a predictor of customer
loyalty, e.g., purchase intention, customer acquisition and use of the
products or services (Jahn and Kunz, 2012; Zhang et al., 2022). There­
fore, we propose:
H1. The positive relationship between the perception of infotainment
content and marketing outcomes – (a) customer loyalty and (b) WOM –
is mediated by positively valenced CE behaviors (i.e., positive contri­
bution). Specifically, if the positive perception of infotainment content
increases the frequency of positively valenced CE behaviors, this in
consequence will positively influence marketing outcomes.
Only a few marketing studies have focused on negatively valenced
CE activities (Juric et al., 2015; Marbach et al., 2019; Obilo et al., 2020).
Behavioral manifestations of negative CE are argued to generate unfa­
vorable marketing outcomes, e.g., negative WOM (Marbach et al.,
2019). However, firms have the potential to shape customer perceptions
through marketing information (Bowden et al., 2015) and minimize
detrimental effects of negative CE on marketing outcomes (Marbach
et al., 2019). Customers tend to use firm-related content to positively
enhance their perceptions of the firm (Bowden et al., 2015). With
regards to negatively valenced behavioral manifestations of CE on social
media, we expect that the positive perception of infotainment content
will decrease negatively valenced CE activities and subsequently lead to
positive marketing outcomes. Therefore, we propose:
H2. The positive relationship between the perception of infotainment
content and marketing outcomes – (a) customer loyalty and (b) WOM –
is mediated by negatively valenced CE activities (i.e., negative contri­
bution). Specifically, if the positive perception of infotainment content
decreases the frequency of negatively valenced CE activities, this in
consequence will positively influence marketing outcomes.
3.2. Remunerative content, customer engagement and marketing
outcomes
Some scholars recognize that people engage online to gain monetary
benefits, e.g., discounts or take part in competitions (Gummerus et al.,
2012). Others claim that remuneration leads to passive engagement
V. Kulikovskaja et al.
(Muntinga et al., 2011) or lower engagement levels compared to info­
tainment content (Cvijikj and Michahelles, 2013). Although monetary
incentives are found to affect customers’ motivation to engage and
contribute (Cvijikj and Michahelles, 2013), remuneration is least
frequently mentioned as motivation for engagement on social media
(Muntinga et al., 2011) and as a factor in willingness to engage in
co-creation (Fernandes and Remelhe, 2016). Existing research shows
inconclusive findings (positive, negative, or insignificant effects)
regarding the relationship between the perception of remunerative
content and engagement behaviors (Cvijikj and Michahelles, 2013;
Dolan et al., 2019). According to Dolan et al. (2019), remunerative
content positively relates to liking and sharing behaviors, while Cvijikj
and Michahelles (2013) found that this content type has a positive effect
on commenting, but a negative effect on liking behaviors. However, Lee
et al. (2014) found that content with economic information, e.g., price
mention, deals, or sale promotions, has a negative effect on commenting
behaviors. Despite the inconclusive evidence, we test the relationship
between the remunerative content and social media-based CE and posit
that positive customer perception of remunerative content is likely to
generate positively valenced CE behaviors (i.e., positive contribution)
on social media. This empirical investigation will help to resolve in­
consistences and mixed results of the previous research. In addition, like
the infotainment content type, we expect that remunerative content will
positively affect marketing outcomes, e.g., WOM and customer loyalty
through social media-based CE. In other words, when people positively
contribute to remunerative content, this engagement will positively
drive marketing outcomes. Therefore, we propose:
H3. The positive relationship between the perception of remunerative
content and marketing outcomes – (a) customer loyalty and (b) WOM –
is mediated by positively valenced CE behaviors (i.e., positive contri­
bution). Specifically, if the positive perception of remunerative content
increases the frequency of positively valenced CE behaviors, this in
consequence will positively influence marketing outcomes.
Similarly, we expect that remunerative content will minimize
negatively valenced CE on social media and consequently have a posi­
tive impact on marketing outcomes. Therefore, we propose:
H4. The positive relationship between the perception of remunerative
content and marketing outcomes – (a) customer loyalty and (b) WOM –
is mediated by negatively valenced CE behaviors (i.e., negative contri­
bution). Specifically, if the positive perception of remunerative content
decreases the frequency of negatively valenced CE behaviors, this in
consequence will positively influence marketing outcomes.
3.3. Relational content, customer engagement and marketing outcomes
Firms might enhance the value of firm-related information by
engaging customers through active experiences and relational content
(Dolan et al., 2019). Existing research shows inconclusive findings
(positive or insignificant effects) regarding the relationship between the
perception of relational content and engagement behaviors (Dolan et al.,
2019; Jahn and Kunz, 2012; Khan, 2017). Those who want to socialize
and build relationships on social media are likely to exhibit either all
social media metrics, e.g., liking, commenting, and sharing, and creating
content (Jahn and Kunz, 2012) or only some metrics (Khan, 2017).
Moreover, a number of firms have leveraged social media to foster
customer co-creation and crowdsource new ideas as part of a marketing
campaign (Rohm et al., 2013). Scholars argue that people often engage
in co-creation because of the possibility to interact with like-minded
others who they want to establish social relationships with. For
example, Fernandes and Remelhe (2016) found that the desire to so­
cialize with peers has a positive impact on willingness to engage in
collaborative innovation. Moreover, higher engagement levels, e.g.,
customers’ co-creation of products, services, or content, are suggested to
7
Journal of Retailing and Consumer Services 74 (2023) 103445
increase positive attitudes toward the firm or facilitate WOM (Lawrence
et al., 2013). Despite limited research on consequences, relational con­
tent may indirectly affect marketing outcomes, e.g., WOM and customer
loyalty through social media-based CE (Jahn and Kunz, 2012). When
people show their involvement with relational content through their
positively valenced CE behaviors (e.g., positive contribution), their
engagement will positively affect marketing outcomes. Therefore, we
propose the following hypothesis:
H5. The positive relationship between the perception of relational
content and marketing outcomes – (a) customer loyalty and (b) WOM –
is mediated by positively valenced CE behaviors (i.e., positive contri­
bution). Specifically, if the positive perception of relational content in­
creases the frequency of positively valenced CE behaviors, this in
consequence will positively influence marketing outcomes.
In addition, recent marketing research highlights the detrimental
impact of negatively valenced CE behavior in an online context (Azer
and Alexander, 2020), e.g., negative WOM (Marbach et al., 2019; Juric
et al., 2015) and financial and reputational consequences for firms
(Kumar et al., 2010). Then again, customers may influence each other’s
valence of CE (Li et al., 2018). Customers tend to rely on each other for
information about products or services, i.e., user-generated content, and
accept other customers’ influencing behavior to alleviate perceived risks
and reduce their dependence on firm-generated content (Alexander
et al., 2018). Similarly, social contagion, i.e., customers influencing each
other, might play a role in shaping their attitudes and decisions to like or
comment on the content (de Vries et al., 2012). Positive perception of
the relational content can be argued to have the potential to influence
customer attitudes towards the firms and their actions, e.g., mitigate
negatively valenced CE and consecutively generate favorable marketing
outcomes. Therefore, we propose:
H6. The positive relationship between the perception of relational
content and marketing outcomes – (a) customer loyalty and (b) WOM –
is mediated by negatively valenced CE behaviors (i.e., negative contri­
bution). Specifically, if the positive perception of relational content
decreases the frequency of negatively valenced CE behaviors, this in
consequence will positively influence marketing outcomes.
4. Empirical studies
This research is based on two empirical studies. Study 1 examines
mediating effects of five CE behaviors (e.g., co-creation, positive
contribution, negative contribution, dormancy, and disengagement)
between three content types (e.g., infotainment, remunerative, and
relational content) and two marketing outcomes (e.g., WOM, customer
loyalty). For Study 1 we conduct an online survey with customers in the
context of social media. Taking a detailed view into positive contribu­
tion as an important form of CE, we conduct Study 2 to examine direct
effects of content types on engagement metrics of positive contribution
(e.g., Likes, Shares, and Comments). For Study 2 we conduct a field
study to take a behavior-centric perspective and collect behavioral data
from social media to complement the results of Study 1.
4.1. Study 1
4.1.1. Participants
Data were collected by means of an online cross-sectional survey
using a panel of Chinese consumers from a marketing research agency.
Participants had to meet eligibility criteria to participate in the survey.
Participants had to be between 18 and 66 years old. They had to be
located in the first or second tier cities (Beijing, Shanghai, Chengdu, and
Xian). Participants were asked to name their favorite restaurant and had
to be followers of the restaurant’s account on WeChat. The restaurant
name was then auto filled for the remaining questions relating to the
V. Kulikovskaja et al. Journal of Retailing and Consumer Services 74 (2023) 103445

Table 2 negative contribution response items on a seven-point Likert scale (from

Socio-demographics. 1 = “strongly disagree” to 7 = “strongly agree”), except for co-creation,
Demographic Category Frequency Percentage dormancy and disengagement constructs that were measured by a single
item. Lastly, participants were asked to report their WOM and loyalty
Gender Female 260 50.0%
Male 260 50.0% toward their favorite restaurant. They rated response items on a
Age (years) Under 25 110 21.2% seven-point Likert scale (from 1 = “never” to 7 = “very often”). WOM
26–35 318 61.2% was measured with two items from Zeithaml et al. (1996), and loyalty
36–45 75 14.4% was measured with five items suggested by Watson et al. (2015). The
46–55 16 3.1%
56 and older 1 0.2%
analysis revealed that one item should be removed from the loyalty
Education Primary school 2 0.4% measure. Moreover, the questionnaire was developed in English and
Secondary school/not 40 7.7% translated into Chinese. To ensure conceptual equivalence, the trans­
finished university lations were discussed with three independent translators whose native
Vocational education 24 4.6%
language was Chinese. The measures were pretested with 50 re­
Bachelor degree 366 70.4%
Master degree 83 16% spondents. We conducted preliminary assessment, e.g., sample de­
Other 5 1% mographics and exploratory factor analysis.
Monthly income <3000 12 2.3%
before tax (RMB) 3000–5999 54 10.4% 4.1.3. Data analysis
6000–8999 84 16.2%
9000–11999 123 23.7%
Data analysis followed a two-step approach including the evaluation
12000-14999 97 18.7% of the measurement models and the assessment of the structural model
15000-17999 69 13.3% and hypotheses testing (Hair et al., 2017). Partial Least
>18000 81 156% Squares-Structural Equation Modeling (PLS-SEM) using the SmartPLS
Occupation Student 16 3.1%
3.2 software (Ringle et al., 2015) was applied for assessing the mea­
Officer 34 6.5%
Manager 268 51.5% surement model and path estimations of the hypothesized model that
Employee 137 26.3% focus on the relationships of CE behaviors according to the conceptual
Self-employed 24 4.6% framework (Fig. 1). We used a bootstrapping approach with 5000 sub­
Teacher 25 4.8% samples and the 95% bias-corrected and accelerated bootstrap confi­
Other 16 3.1%
dence intervals to assess the significance of path coefficients (Ringle
Region Beijing 122 23.5%
Shanghai 151 29.0% et al., 2015).
Guangzhou 77 14.8%
Shenzhen 26 5.0% 4.1.4. Results
Tianjin 8 1.5%
For the measurement model assessment, we evaluated construct
Second- tier cities: Chengdu, 136 26.2%
Xian, Wuhan, and other measure reliability (i.e., indicator reliability and internal consistency
reliability) and validity (i.e., convergent and discriminant validity) (Hair
et al., 2021). Indicator reliability was ensured as all indicators exhibited
standardized indicator loadings larger than 0.7 and the average variance
restaurant in the survey. Only fully complete questionnaires were extracted (AVE) larger than 0.5 (Hair et al., 2021). An overview of items
delivered by the field agency. Five hundred twenty respondents fully used in the analysis, factor loadings and AVE values is presented in
completed the survey. Table 3. Regarding Cronbach’s alpha (CA), composite reliability (CR),
Gender was distributed evenly in the sample (50% males, 50% fe­ and AVE, the values for the latent constructs of both models were greater
males). Participants were from 18 to 66 years old, with a mean age of 30 than the thresholds of CA > 0.8, CR > 0.7, and AVE >0.5 (Hair et al.,
years (median = 30, standard deviation = 6.33). They were relatively 2021), thus meeting the recommended requirements (Table 4).
well educated (see Table 2). Discriminant validity of all the latent constructs was examined applying
the Fornell–Larcker criterion (Fornell and Larcker, 1981). All squared
4.1.2. Measures correlations among latent variables were smaller than their AVE;
Participants were asked to answer questions related to the focal therefore, we consider the discriminant validity met by the constructs. In
constructs of the conceptual framework (see Fig. 1) including content- addition, it is recommended that researchers apply the hetero­
related antecedents, dimensions, and consequences of CE. First, partic­ trait–monotrait (HTMT) criterion for PLS-SEM (Hair et al., 2021;
ipants had to indicate their favorite restaurant and evaluate the res­ Henseler et al., 2015). Results show that values of HTMT (except for the
taurant’s generated content on its WeChat platform in terms of the three link between infotainment and remunerative content, HTMT = 0.92)
content types (e.g., infotainment, remunerative, and relational). Info­ were below the critical value of 0.85 (Hair et al., 2021), thus indicating
tainment and relational content types were measured using items by discriminant validity. We estimated the model with the “the same
Jahn and Kunz (2012) while remunerative content was measured by source” first-order factor added to the construct indicators (Podsakoff
self-developed items based on Muntinga et al.’s (2011) conceptualiza­ et al., 2003) to examine the impact of potential common method bias.
tion. Participants rated content-related response items on a seven-point The fit statistics indicate an adequate fit (standardized root mean
Likert scale (from 1 = “strongly disagree” to 7 = “strongly agree”). squared residual (SRMR) is equal to 0.05, the normed fix index (NFI) is
Second, participants assessed their engagement behaviors (i.e., equal to 0.87). Using a PLS-SEM approach, we test causal–predictive
co-creation, positive contribution, dormancy, negative contribution, relationships between the latent variables simultaneously.
and disengagement) in response to the content on their favorite res­ First, infotainment content (IEC) had a significant positive effect only
taurant’s WeChat platform. Taking a behavior-centric perspective, we on positive contribution (PCONTR) (β = 0.265, p < .001). The re­
operationalized CE as a set of actions that customers take on social lationships between the IEC and co-creation (COC) (β = − 0.008, p =
media, e.g., reacting to content (e.g., Likes), commenting on content (e. .921), dormancy (DOR) (β = 0.022, p = .83), negative contribution
g., Comments), sharing content with others (e.g., Shares) and adapted (NCONTR) (β = 0.036, p = .667) and disengagement (DIS) (β = − 0.006,
Schivinski et al.’s (2016) conceptualization to develop items for p = .953) were found insignificant. Moreover, IEC did not have a direct
co-creation, positive contribution, and negative contribution. The items effect on WOM (β = 0.014, p = .84) and loyalty (LOYAL) (β = − 0.052, p
for dormancy and disengagement were developed based on Brodie et al. = .491). Nonetheless, we tested the hypothesis for mediating effects of
(2011) and van Doorn et al. (2010). Participants rated positive and the relationship between IEC and marketing outcomes and found

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V. Kulikovskaja et al. Journal of Retailing and Consumer Services 74 (2023) 103445

Table 3 Table 3 (continued )

Measurement scales. Constructs and items (AVE) Acronym Loadings
Constructs and items (AVE) Acronym Loadings
Customer loyalty (.67) LOYAL
Infotainment content (.71) IEC I often buy products/services from [restaurant name]. LOYAL1 .83
The content of [restaurant name] on WeChat is helpful for IEC1 .87 The last time I purchased a product/service, I bought it LOYAL2 .75
me. from [restaurant name].
The content of [restaurant name] on WeChat is useful for IEC2 .84 I frequently buy from [restaurant name]. LOYAL3 .87
me. Mostly I buy from [restaurant name]. LOYAL4 .86
The content of [restaurant name] on WeChat is functional IEC3 .85
Note: IEC = Infotainment content, REM = Remunerative content, REL = Rela­
for me.
The content of [restaurant name] on WeChat is practical IEC4 .85 tional content, PCONTR = Positive contribution, COC–
– Co-creation, NCONTR =
for me. Negative contribution, DIS = Disengagement, DOR = Dormancy, WOM = Word-
The content of [restaurant name] on WeChat is fun. IEC5 .82 of-mouth, LOYAL = Customer loyalty.
The content of [restaurant name] on WeChat is exciting. IEC6 .85
The content of [restaurant name] on WeChat is pleasant. IEC7 .82
significant mediating effects through positive contribution (PCONTR)
The content of [restaurant name] on WeChat is IEC8 .85
entertaining. on both, WOM (β = .101, p = .002) and LOYAL (β = 0.108, p = .002).
Second, remunerative content (REMC) had significant negative effects
Remunerative content (.79) REMC
The content of [restaurant name] on WeChat includes REMC1 .90
on positive contribution (PCONTR) (β = − 0.168, p = .021) and negative
special offers. contribution (NCONTR) (β = − 0.175, p = .016). The relationships be­
The content of [restaurant name] on WeChat includes REMC2 .90 tween REMC and co-creation (COC) (β = 0.045, p = .579), dormancy
discounts. (DOR) (β = 0.079, p = .38) and disengagement (DIS) (β = 0.068, p =
The content of [restaurant name] on WeChat includes REMC3 .88
.516) were found insignificant. Regarding consequences, REMC did not
coupons that could be redeemed.
have direct effects on WOM (β = − 0.036, p = .594) and LOYAL (β =
Relational content (.65) RELC
0.018, p = .81). Furthermore, while negative contribution acted as
I can interact with [restaurant name] on WeChat. RELC1 .84
I can communicate with [restaurant name] on WeChat. RELC2 .83 mediator between REMC and WOM (β = 0.028, p = .031), positive
I can give feedback to [restaurant name] on WeChat. RELC3 .79 contribution negatively mediated the relationship between REMC and
I can get answers from [restaurant name] on WeChat. RELC4 .83 WOM (β = − 0.064, p = .035) and REMC and LOYAL (β = 0.068, p =
I can interact with other customers on WeChat account of RELC5 .76 .036).
[restaurant name].
Third, relational content (RELC) displayed a significant effect on
I can read other customers’ comments about [restaurant RELC6 .79
name] on WeChat account of [restaurant name]. positive contribution (PCONTR) (β = 0.634, p < .001), co-creation
(COC) (β = 0.291, p < .001), and on disengagement (DIS) (β = 0.189,
Positive contribution (.66) PCONTR
How often do you like a positive comment on the WeChat PCONTR1 .81 p = .001). The relationship between RELC negative contribution
account of [restaurant name]? (NCONTR) (β = − .115, p = .055) and dormancy (DOR) (β = 0.043, p =
How often do you comment on a positive comment on the PCONTR2 .82 .46) was found insignificant. With regards to consequences, RELC was
WeChat account of [restaurant name]? found to have a positive direct effect on both, WOM (β = 0.234, p= <
How often do you write a positive comment under posts PCONTR3 .82
.001) and LOYAL (β = 0.291, p < .001). Moreover, positive contribution
on the WeChat account of [restaurant name]?
How often do you share the posts of the WeChat account of PCONTR4 .79 (PCONTR) and co-creation (COC) acted as mediator for the relationship
[restaurant name] on your own WeChat? between RELC and WOM (β = 0.243, p < .001; β = 0.043, p = .001) as
How often do you share the posts of the WeChat account of PCONTR5 .82 well as between RELC and LOYAL (β = 0.258, p < .001; β = 0.034, p =
[restaurant name] to your relatives and friends?
.013).
Co-creation COC Table 5 displays the results of direct and mediating effects between
If you send your feedback to [restaurant name] on antecedents, CE behaviors and consequences.
WeChat, what would you expect your feedback should
lead to? Please select one of the following: Nothing/
Based on the observation of a relative importance of positive
Slight improvements in products or services of the contribution as mediator, an additional model with content types (IEC,
restaurant/New products, recipes or services of the REMC, and RELC) as antecedents and WOM and customer loyalty as
restaurant consequences, but more detailed view into positive contribution, was
Negative contribution (.85) NCONTR analyzed. Positive contribution was differentiated with regard to par­
How often do you like a negative comment on the WeChat NCONTR1 .95 ticipants’ likelihood of liking (Likes: how often do you like a positive
account of [restaurant name]? comment on the WeChat account of [restaurant name]?), sharing (Shares:
How often do you comment on a negative comment on the NCONTR2 .80
WeChat account of [restaurant name]?
how often do you share the posts of the WeChat account of [restaurant name]
How often do you write a negative comment on the NCONTR3 .95 on your own WeChat? how often do you share the posts of the WeChat ac­
WeChat account of [restaurant name]? count of [restaurant name] to your relatives and friends?), and commenting
How often do you share a negative comment on the NCONTR4 .95 (Comments: how often do you comment on a positive comment on the
WeChat account of [restaurant name] on your own
WeChat account of [restaurant name]? how often do you write a positive
WeChat?
How often do you share a negative comment about NCONTR5 .94 comment under posts on the WeChat account of [restaurant name]?) on a
[restaurant name] to your relatives and friends? given content. PLS-SEM (Ringle et al., 2015) was applied for assessing
Dormancy DOR
the measurement model and path estimations. We used a bootstrapping
Have you previously been temporarily inactive or have approach with 5000 subsamples and the 95% bias-corrected and
disabled notifications on the WeChat account of X? Yes/ accelerated bootstrap confidence intervals to assess the significance of
No path coefficients (Ringle et al., 2015).
Disengagement DIS With regards to the assessment of the measurement model, a similar
Have you previously unfollowed the WeChat account of procedure compared to model 1 was used. Indicator reliability was
[restaurant name]? Yes/No ensured as all indicators exhibited standardized indicator loadings
Word-of-mouth (.88) WOM larger than 0.7 and AVE larger than 0.5 (Hair et al., 2021). Cronbach’s
I introduce [restaurant name] to other people. WOM1 .94 alpha (CA), composite reliability (CR), and the values for the latent
I recommend [restaurant name] to other people. WOM2 .94
constructs of both models were adequate and greater than the thresholds
of CA > 0.8, CR > 0.7, (Hair et al., 2021), thus meeting the

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V. Kulikovskaja et al. Journal of Retailing and Consumer Services 74 (2023) 103445

Table 4
Mean and Standard Deviations, Cronbach’s alpha, Composite Reliability and Discriminant Validity based on Fornell-Larcker.
Construct M (SD) CA CR IEC REMC RELC COC PCONTR NCONTR DOR DIS WOM LOYAL

IEC 5.17 (1.29) .94 .95 0.844

REMC 5.25 (1.41) .87 .92 0.829 0.892
RELC 5.43 (1.12) .89 .92 0.529 0.466 0.805
COC 2.39 (0.53) 0.183 0.174 0.308 /
PCONTR 5.43 (1.05) .87 .91 0.461 0.347 0.696 0.280 0.814
NCONTR 2.97 (0.17) .96 .97 − 0.170 − 0.199 − 0.178 − 0.092 − 0.068 0.920
DOR / / / 0.110 0.117 0.091 0.132 0.039 − 0.115 /
DIS / / / 0.150 0.151 0.218 0.161 0.206 − 0.081 0.451 /
WOM 5.74 (1.08) .86 .94 0.333 0.270 0.559 0.332 0.587 − 0.234 0.041 0.134 0.938
LOYAL 5.43 (1.11) .85 .90 0.323 0.269 0.591 0.309 0.627 − 0.080 0.008 0.163 0.673 0.828

Note: IEC = Infotainment content, REM = Remunerative content, REL = Relational content, PCONTR = Positive contribution, COC–
–Co-creation, NCONTR = Negative
contribution, DIS = Disengagement, DOR = Dormancy, WOM = Word-of-mouth, LOYAL = Customer loyalty, M = Mean, SD = Standard deviation, CA = Cronbach’s
alpha, CR = Composite reliability.

Table 5
Structural model results – direct effects and mediation effects.
IV DV: PCONTR DV: COC DV: NCONTR DV: DOR DV: DIS
2 2 2 2
Beta R Beta R Beta R Beta R Beta R2

Content: IEC 0.265** 0.526 − 0.008 0.096 0.036 0.049 0.022 0.016 − 0.006 0.051
Content: REMC − 0.168* 0.045 − 0.175* 0.079 0.068
Content: RELC 0.634** 0.291** − 0.115 0.043 0.189**

DV: WOM DV: LOYAL DV: WOM DV: LOYAL

2 2
Beta R Beta R Mediator Beta Beta
Content: IEC 0.014 0.433 − 0.052 0.455 PCONTR .101** .108**
COC − .001 − .001
NCONTR − .006 <.001
DOR <.001 − .001
DIS <.001 <.001
Content: REMC − 0.036 0.018 PCONTR − .064* − .07*
COC .007 .005
NCONTR .03* <.001
DOR − .002 − .005
DIS − .001 .002
Content: RELC 0.234** 0.291** PCONTR .243** .26**
COC .04** .03*
NCONTR .02 <.001
DOR − .001 − .003
DIS − .004 .006

CE: PCONTR 0.383** 0.407**

CE: COC 0.147** 0.115**
CE: NCONTR − 0.162** <.001
CE: DOR − 0.022 − 0.060
CE: DIS − 0.020 0.030

Note: **p < .01; *p < .05; DV = Dependent variable, IV = Independent variable, IEC = Infotainment content, REM = Remunerative content, REL = Relational content,
CE= Customer engagement, PCONTR = Positive contribution, COC– – Co-creation, NCONTR = Negative contribution, DIS = Disengagement, DOR = Dormancy, WOM
= Word-of-mouth, LOYAL = Customer loyalty.

recommended requirements. Discriminant validity of the latent con­
structs was examined applying the Fornell–Larcker criterion (Fornell
and Larcker, 1981). All squared correlations among latent variables
were smaller than their AVE; thus, we consider the discriminant validity
met by the constructs.
First, infotainment content (IEC) positively and significantly affected
Likes (β = 0.207, p = .006), Shares (β = 0.281, p = .001) and Comments
(β = 0.194, p = .029). IEC had no direct effect on WOM (β = − 0.004, p =
.951) and LOYAL (β = − 0.064, p = .382). Furthermore, while Likes
mediated the relationship between IEC and WOM only (β = 0.039, p =
.047), Shares mediated the relationship between IEC and WOM (β =
0.061, p = .021) and between IEC and LOYAL (β = 0.067, p = .009).
Second, remunerative content (REMC) had a significant negative effect
on Shares (β = − 0.266; p = .003) while effects on Likes and Comments
were found insignificant (β = − 0.072, p = .322; β = − 0.066, p = .458).
REMC had no direct effect on WOM (β = 0.01, p = .885) and LOYAL (β =
0.03 p = .645). Furthermore, Shares mediated the relationship between
REMC and WOM (β = − 0.058, p = .034) as well as between REMC and
LOYAL (β = – 0.064, p = .017).
Third, relational content (RELC) significantly affected Likes (β =
0.521, p < .001), Shares (β = 0.586, p < .001), and Comments (β =
0.548, p < .001). RELC had direct effects on WOM (β = 0.281, p < .001)
and LOYAL (β = 0.311, p < .001). Moreover, while Likes and Shares
acted as mediators of the relationship between RELC and WOM (Likes: β
= 0.099, p = .0012; Shares: β = 0.128, p = .002), Shares and Comments
mediated the relationship between RELC and LOYAL (Shares: β = 0.140,
p = .001; Comments: β = 0.086, p = .027). Only Shares had a positive
direct effect on both, WOM (β = 0.219, p = .002) and LOYAL (β = 0.239,
p < .001). Likes was positively related to WOM (β = 0.190, p = .002) and
Comments was positively related to LOYAL (β = 0.157, p = .018).
Overall, Study 1 shows that the relationships between social media
content types and marketing outcomes are mediated by CE behaviors. In
particular, relational content has a greater mediating effect of positive
contribution on WOM and customer loyalty, compared to infotainment

10
V. Kulikovskaja et al.
content and remunerative content; yet, remunerative content displays
negative effects. Only relational content shows a mediating effect of co-
creation on both outcomes. Only remunerative content type has a
mediating effect of negative contribution on WOM. However, the effect
is negative. No differences are found for dormancy and disengagement.
The results find support for H1a, H1b, H5a, and H5b. Although remu­
nerative content has a significant mediating effect of positive contri­
bution on both outcomes and of negative contribution on WOM, the
effects are of the opposite directions than anticipated; thus, H3a, H3b
and H4a are not supported. Importantly, positive contribution that re­
flects a moderate level of active CE (Schivinski et al., 2016) appears to
exhibit mediating effects between all content types and outcomes. In line
with hypotheses, positive contribution acts as an important mediator
through which content relates to marketing outcomes, offering impor­
tant implications for development of content strategies to generate
marketing outcomes.
4.2. Study 2
Based on Study 1 results and the relative importance of positive
contribution, the objective of Study 2 is to examine direct effects of three
content types (e.g., infotainment, remunerative, and relational content)
on three engagement metrics of positive contribution (e.g., Likes,
Shares, and Comments). It is important to distinguish between the
metrics because they reflect different customer behavioral responses and
indicate how engaging firm marketing activities are on social media
(Moran et al., 2019). Likes enable customers to indicate their interest
reaction toward specific content (Swani and Labrecque, 2020). Com­
ments and shares enable firm/customer interactions and intensify the
reach of the content to others (de Vries et al., 2012).
4.2.1. Data and sample
We collected consumer behavioral data from a restaurant in China.
The dataset consists of social media campaigns that were developed and
launched by the restaurant on its official WeChat account from January
to May 2020. Each campaign contains a name, specific content, launch
date, and social media metrics, i.e., a number of reads, number of likes,
number of comments, and number of shares. The campaigns were
launched in batches of different content; thus, timing or the sequence of
the content within a batch was recorded. We extracted 68 WeChat
campaigns, yielding a total of 26731 Reads, 74 Likes, 793 Shares, and 30
Comments from the followers of the restaurant’s WeChat account. We
did not measure valence of CE, i.e., positive and negative comments.
Given the number of campaigns (n = 68), we opted for manual
categorization of three content types following two steps. First, we
defined coding instructions according to the existing literature to
analyze the textual or qualitative content data. Second, two coders used
the instructions to categorize the content for quantitative analysis. The
coders then discussed the content, especially the incongruent instances,
to ensure high agreement in categorization. Following the Study 1, we
categorized the extracted campaigns according to three content types, i.
e., infotainment content (n = 21), remunerative content (n = 34), and
relational content (n = 13). Furthermore, with respect to dependency
between passive consumption (i.e., reads) and the respective chance of
active contribution (i.e., Likes, Comments), we used a relative measure
for each active contribution for further analyses. Thus, the ratio of Likes,
Shares and Comments was calculated by dividing the number of Reads
from the observed number of active contributions for each content using
the following formulas:
Likes ratio = (Number of Likes) / (Number of Reads)
Shares ratio = (Number of Shares) / (Number of Reads)
Comments ratio = (Number of Comments) / (Number of Reads)
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Journal of Retailing and Consumer Services 74 (2023) 103445
4.2.2. Data analysis and results
First, a univariate analysis (univariate GLM) was used with Reads as
dependent variable, content type (infotainment (IEC), remunerative
(REMC), relational (RELC)) as fixed factor and timing as covariate
(including interaction). The analysis showed significant main effects of
content type (F(2, 68) = 3.77, p = .029) and timing (F(1, 68) = 15.22, p
< .001), but no interaction effect of content type and timing (F(2, 68) =
0.69, p = .504) on Reads (R2 = 0.35). Bonferroni-corrected pairwise
comparison (evaluated with timing at the value of 2.6) showed signifi­
cantly higher values of Reads for IEC (M = 612.89, SE = 66.61)
compared to REMC (M = 308.49, SE = 53.35; p = .002) and RELC (M =
244.65 SE = 92.31; p = .006). No difference between REMC and RELC
was found.
Second, a univariate analysis (univariate GLM) was used with Likes
ratio as dependent variable, content type (infotainment (IEC), remu­
nerative (REMC), relational (RELC)) as fixed factor and timing as co­
variate (including interaction). The analysis showed a significant main
effect of content type (F(2, 68) = 7.85, p = .001), but no main effect of
timing (F(1, 68) = 2.98, p = .089) nor any interaction effect of content
type and timing (F(2, 68) = 2.82, p = .067) on share of Likes (R2 = 0.29).
Bonferroni-corrected pairwise comparison (evaluated with timing at the
value of 2.6) showed especially significantly higher values for Likes ratio
for IEC (M = 0.004, SE = 0.001) compared to REMC (M = 0.001, SE =
0.001; p = .001) and RELC (M = 0.001, SE = 0.001; p = .03). No dif­
ference between REMC and RELC was found.
Third, a univariate analysis (univariate GLM) was used with Shares
ratio as dependent variable, content type (infotainment (IEC), remu­
nerative (REMC), relational (RELC)) as fixed factor and timing as co­
variate (including interaction). The analysis showed neither significant
main effects of content type (F(2, 68) = 0.09, p = .919), timing (F(1, 68)
= 0.115, p = .736) nor a significant interaction effect of content type and
timing (F(2, 68) = 0.006, p = .994) on Shares ratio (R2 = 0.02).
Bonferroni-corrected pairwise comparison (evaluated with timing at the
value of 2.6) showed no differences between IEC (M = 0.022, SE =
0.027), REMC (M = 0.051, SE = 0.022) and RELC (M = 0.03, SE =
0.038).
Fourth, a univariate analysis (univariate GLM) was used with Com­
ments ratio as dependent variable, content type (infotainment (IEC),
remunerative (REMC), relational (RELC)) as fixed factor and timing as
covariate (including interaction). The analysis showed significant main
effects of content type (F(2, 68) = 6.02, p = .004), timing (F(1, 68) =
6.34, p = .014) and an interaction effect of content type and timing (F(2,
68) = 3.77, p = .029) on Comments ratio (R2 = 0.20). Bonferroni-
corrected pairwise comparison (evaluated with timing at the value of
2.6) showed especially significantly higher values for Comments ratio for
RELC (M = 0.005, SE = 0.001) compared to IEC (M = 0.001, SE = 0.001;
p = .035) and REMC (M = 0.0002, SE = 0.001; p = .005). No significant
difference between IEC and REMC was found.
Overall, Study 2 addresses the significant effect of content types on
positive contribution found in Study 1. Study 2 takes a detailed view into
positive contribution by focusing on its engagement metrics e.g., Likes,
Shares, Comments, which are commonly used to measure positive
contribution. As described earlier, liking firm-related content enables
customers to indicate their interest toward social media content (Swani
and Labrecque, 2020). Commenting on and sharing firm-related content
enable customer-to-firm and customer-to-customer interaction and
dissemination of the content to others (de Vries et al., 2012). Study 2
uncovers which content types are effective to generate positive customer
responses. In line with Study 1, the results of Study 2 show that all
content types relate to Likes. While infotainment content exhibits
greater effects than other types in Study 2, remunerative content shows
negative effects in Study 1. All content types display significant re­
lationships with Comments; yet, relational content exhibits greater ef­
fects compared to the other two content types. We find the results of
Study 1 and Study 2 to be mainly consistent regarding the social media
metrics (e.g., Likes, Shares, Comments).
V. Kulikovskaja et al.
5. Discussion
5.1. Theoretical implications
The present research offers new scientific insights by examining
antecedents, dimensions, and consequences of CE in the social media
context.
First, this research contributes to literature on digital marketing by
applying the underlying principles of uses and gratification theory to
define the typology of social media marketing content being categorized
into three types, i.e., infotainment, remunerative, and relational content
to reflect distinct customer needs. Infotainment content is expected to
gratify customer needs for information and enjoyment (Rohm et al.,
2013) and “deliver information and/or entertain customers with new,
factual, useful, educational, and/or interesting information” (Gavilanes
et al., 2018, p. 7). Remunerative content is expected to deliver customer
perceived monetary value from sales promotions and incentives (Cvijikj
and Michahelles, 2013) while relational content might gratify their
needs for social interaction and building relationships (Dolan et al.,
2019). This typology can be applied in both product and service settings.
Moreover, the research findings imply that customers fulfill their spe­
cific needs through their engagement with specific content types,
particularly consumption of or contribution to the digital content.
Second, this research enriches literature on CE and digital marketing
by examining CE as a mediator for the relationship between social media
content and marketing outcomes. We have found evidence supporting
the conceptual framework that links three distinct content types (e.g.,
infotainment, remunerative, and relational) with five distinct CE be­
haviors (e.g., co-creation, positive contribution, dormancy, negative
contribution, and disengagement), illustrating how these content types
in turn relate to two marketing outcomes (e.g., WOM and customer
loyalty). It is important to recognize that the five engagement behaviors
can take different intensity levels (low, moderate, high) and valence
(positive, negative). This research contributes by focusing on both
positively and negatively valenced CE behaviors. In general, the findings
suggest varying effects of content types on CE and underline the
important mediating role of positive contribution (a moderate, positive
engagement level) in all instances of content types. Co-creation (a high,
positive engagement level) mediates the relationship of relational con­
tent and both marketing outcomes (WOM, customer loyalty). Negative
contribution (a moderate, negative engagement level) mediates the
relationship between remunerative content and both marketing out­
comes (WOM, customer loyalty). Two other engagement levels, i.e.,
disengagement and dormancy do not demonstrate mediation effects.
However, as CE evolves over time (Bowden et al., 2015), the latter
engagement behaviors may have important implications over time.
Regarding infotainment content, in line with previous studies (Cvijikj
and Michahelles, 2013; Demmers et al., 2020), our results show that
customers do not only passively consume this content type but also
positively contribute to the content through all social media metrics -
Likes, Shares, and Comments. These results help resolve the inconsistent
(positive/insignificant) findings of the previous research (Cvijikj and
Michahelles, 2013; De Vries et al., 2012; Dolan et al., 2019). In support
of our proposed framework (see Fig. 1), our results also confirm a
mediating role of social media-based CE between content and marketing
outcomes, e.g., when customers engage with firm-related infotainment
content through positively valenced behaviors (positive contribution),
this then positively drives their WOM and loyalty towards the firm.
However, the study did not find support for the mediating role of
negatively valenced behaviors (negative contribution), which implies
that this content type is unlikely to lead to negative social media-based
engagement.
Regarding remunerative content, in contrast to previous research
studies (Cvijikj and Michahelles, 2013; Dolan et al., 2019), our results
show a direct negative effect on CE behaviors, i.e., positive and negative
contributions and thus imply that this content type is unlikely to lead to
12
Journal of Retailing and Consumer Services 74 (2023) 103445
neither positive nor negative engagement. For example, customers may
consume (read) content with monetary elements, but not actively
engage with it through Likes and Comments, and thus implementing
only this social media marketing strategy is unlikely to increase
engagement on the platform. Moreover, in support of our proposed
model, negative contribution has a mediating effect between remuner­
ative content and WOM while positive contribution mediates the re­
lationships between the content and WOM and loyalty. However, the
relationships are negative; thus, yielding important theoretical insight.
Therefore, implementing remunerative content extensively is counter­
productive as it does not seem to stimulate CE for building long-term
relationships, customer advocacy and loyalty; and may only relate to
short-term transactional outcomes.
Regarding relational content, in line with previous studies (Jahn and
Kunz, 2012; Khan, 2017), customers who want to socialize and build
firm/customer relationships on social media exhibit positively valenced
engagement behaviors, i.e., positive contribution and co-creation.
Relational content is found to be the most influential in comparison to
infotainment and remunerative contents, by generating engagement
through all social media metrics – Likes, Shares, and Comments as well
as leading to marketing outcomes, e.g., WOM and customer loyalty. A
possible explanation for this result can be related to customers’ need for
social interaction (Khan, 2017) as well as social contagion i.e., cus­
tomers influencing each other (de Vries et al., 2012), that might play a
role in customers’ decision to contribute to and create firm-related
content. This implies that firms’ social media marketing activities
should be directed at establishing, developing, and maintaining re­
lationships with customers through relational content.
5.2. Managerial implications
This research has important implications for marketing managers in
the development of digital marketing strategies for stimulating CE and
generating favorable marketing outcomes.
First, empirical findings show that firm’s social media marketing
activities lead to WOM and customer loyalty, through CE. More
importantly, relational content is found to stimulate moderate to high
level of CE such as positive contribution (Likes, Shares, Comments) and
co-creation (customers providing their suggestions for improvements in
the offerings of service firms, e.g., restaurants), which in turn enhances
WOM and customer loyalty as demonstrated in this study. The finding
implies that customers who are engaged or highly engaged contribute to
the enhanced marketing outcomes (Pansari and Kumar, 2017). Man­
agers should deploy both relational and infotainment content types to
initiate firm/customer interaction that will enhance customer advocacy
and loyalty. Importantly, remunerative content does not seem to stim­
ulate CE. This finding implies that the use of remunerative content with
embedded occasional deals might be counterintuitive and not the most
effective strategy for the firm to drive active and deeper CE on social
media (Marketing Science Institute, 2020).
Second, the findings suggest that marketing managers should take a
strategic decision to develop and implement content design strategies
according to the needs of their customer segment, the firm’s anticipated
outcomes, and the contextual setting. Customers seek content on social
media because of their specific needs; likewise, the delivery of varying
content types is expected to gratify those needs (Carlson et al., 2018;
Khan, 2017) and maximize customer value (Hollebeek and Macky,
2019; Kumar and Reinartz, 2016). Moreover, the contextual setting,
such as where a customer is in the customer journey (Colicev et al.,
2019; Demmers et al., 2020), might influence effective implementation
of content marketing strategies. For example, remunerative content
deems useful to attract customers with incentives in the
pre-consumption stage (Odoom et al., 2017) while infotainment content
may stimulate engagement and advocacy in the pre- or
post-consumption stage (Demmers et al., 2020). Relational content
could be considered for enhancing advocacy and loyalty toward the firm
V. Kulikovskaja et al.
and maintaining relationships with customers in the post-consumption
stage.
Overall, marketers are advised to go beyond remunerative content
and incorporate entertaining and relational elements in the content for
stimulating firm-to-customer and customer-to-customer interaction that
is essential for maintaining CE and building relationships with cus­
tomers (Kumar and Reinartz, 2016).
5.3. Limitations and future research
The present research has limitations that provide avenues for future
research. First, our research is limited to single contexts and the related
sampling strategy, e.g., a service sector, restaurants; a social media
platform, WeChat; and a country, China. We suggest replication of our
research design across different settings and different strategy of
participant selection to further validate the proposed model and
examine the effects of the proposed content types on CE in other sectors
of the service industry as well as the product industry. Future studies
may explore CE in different online platforms used by the same firm.
Specifically, more attention is needed to the effectiveness of content
types across different platforms. Second, the findings highlight the
relational content type being related not only to positive contribution (a
moderate, positive engagement level) but also to co-creation (a high,
positive engagement level); future research might consider addressing
design of relational content and different design elements embedded in
the content (Harmeling et al., 2017). Third, potential moderators such as
customers’ personality might affect the effectiveness of social media
marketing. Individual factors like personality traits might influence
customer response to social media marketing activities (Islam et al.,
2017). Future research should explore how individuals’ personality
traits influence their engagement with content. Finally, a majority of
research focuses on positive CE while other forms of CE, including
negative engagement, dormancy, and disengagement, have been
underexplored. As the CE concept evolves over time (Bowden et al.,
2015), these CE behaviors might show different effects over time;
therefore, future research should consider conducting a longitudinal
study.
5.4. Conclusion
This research focused on social media context and examined
customer engagement with firm’s content as an engagement object. It
adopted a behavioral perspective to examine CE behaviors as mediators
for the relationship between distinct content types and marketing out­
comes. The findings found support for the proposed conceptual frame­
work that links three content types, e.g., infotainment, remunerative,
and relational content, with five CE behaviors, e.g., co-creation, positive
contribution, dormancy, negative contribution, and disengagement,
illustrating how these types in turn relate to two marketing outcomes, e.
g., WOW, and customer loyalty. The findings reveal varying effects of
content types on engagement and outcomes; yet, infotainment and
relational content types show greater effects on outcomes, suggesting
that customers purposely choose to engage with and contribute to the
content, which gratifies their needs for information, entertainment or
socialization and enables them to build relationships with the firm and
other customers though social media-based interactions. On the other
hand, content with remunerative incentives does not seem to stimulate
engagement. This research contributes to the literature by assessing the
relevance and significance of content types in facilitating social media-
based CE that in turn drives customer advocacy and loyalty.
Declaration of competing interest
None.
13
Journal of Retailing and Consumer Services 74 (2023) 103445
Data availability
Data will be made available on request.
Acknowledgements
This research received funding from Sino-Danish Center for Educa­
tion and Research (SDC).
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 Heliyon 9 (2023) e15913

Contents lists available at ScienceDirect

Heliyon
journal homepage: www.cell.com/heliyon

Research article

Economic and carbon emission performance of green farming by

marketing cooperatives
Qiufen Zheng a, *, Jiacheng Liu b, Hongbin sun c
a
School of Economics and Management, Nanjing Agricultural University, PR China
b
School of Public Finance and Taxation, Nanjing University of Finance & Economics, PR China
c
Shandong Agricultural Technology Promotion Center (Shandong Agricultural and Rural Development Research Center), PR China

A R T I C L E I N F O A B S T R A C T

Keywords: Investigating the economic and carbon emission performance of green production in marketing
Carbon emission effect cooperatives is important in clarifying China’s green transition path and promoting green
Economic performance development. In this paper, we estimated the economic and carbon emission performance of
Green farming
green production in marketing cooperatives using survey data from 340 samples in Shandong
Marketing cooperative
Province, China. The results show that green farming improved the performance of marketing
cooperatives, and the larger the scale, the better the performance. It is still valid after weakening
the endogenous problem through endogenous transformation regression. Particularly, green
farming has a more significant effect on the performance of low-performing marketing co­
operatives. In addition, the carbon emission per unit area of green produces are significantly
lower than that of conventional produces, and the carbon emission per unit yield of most green
produces lower than that of conventional produces. Therefore, strengthening the standardized
development of marketing cooperatives, promoting green technology research and development,
and standardizing the market supervision of green produces are important ways to achieve the
economic and carbon emission performance of green produces in China, as well as to promote
China’s green transformation.

1. Introduction

In recent years, the Chinese government has been committed to the green transformation of agriculture,1 as the problems of the
decline in the fertility of cultivated land, the pollution of producing areas and the ecological security have become increasingly
prominent [1,2]. The key to the green transformation of agriculture is to achieve greater economic and environmental performance
with fewer inputs. Green farming is manifested by the transition in agriculture from traditional to nontraditional (environmental,
nature-like, “nature-based”, “green”) technologies [3]. Many scholars have also observed that the environmental performance of green

* Corresponding author.
E-mail address: 293516420@qq.com (Q. Zheng).
1
In 2017, the Chinese government issued the “Opinions on Innovating Institutions and Mechanisms to Promote Green Agricultural Development,”
requiring the comprehensive establishment of a green ecology-oriented institutional system to promote green agricultural development. In 2018, the
No. 1 document of the Central Committee needed to carry out agricultural green development actions to realize the reduction of inputs, clean
production, recycling of waste, and colocalization of industrial models. The No. 1 Central Document in 2020 pointed out that it is necessary to
continue to adjust and optimize the agricultural structure, strengthen the certification and management of green food, organic crops, and
geographically indicated crops, and increase the supply of high-quality green crops.

https://doi.org/10.1016/j.heliyon.2023.e15913
Received 7 December 2022; Received in revised form 14 April 2023; Accepted 26 April 2023
Available online 3 May 2023
2405-8440/© 2023 Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Q. Zheng et al. Heliyon 9 (2023) e15913

agriculture is significant. For example, green farming can also help to improve environmental quality by lowering the role of pesti­
cides, fertilizers, and reducing the proportion of consuming high-energy feedstuffs [4], which can improve environmental performance
by 5–13% [5]. In green scenario, encroachment of cultivated land, forest land and grassland by construction land was effectively
alleviated in the central and southern parts of Shandong Province in China [6]. Green farming can reduce carbon emissions, and the
speed of carbon emission reduction varies in different regions [7,8]. A one percent increase in organic farming acreage could reduce
GHG emissions by 0.049% in the U.S [9]. A switch to organic production in the UK could result in a GHG emission reduction of about
8% in terms of UK production [10]. A future scenario where organic farming increased by 50% in 2030, would yield a potential
reduction of 12%–14% in the GHG emissions from the farming industry in the European Union [11]. Considering that the annual
carbon emissions in China account for about 30% of the total emissions of the world [12], we focus on carbon emissions in envi­
ronmental benefits.
However, One major difficulty in reducing carbon emissions in green method is that it may severely affect farm income [13]. From
a micro perspective, most farmers will only adopt green farming practices if they do not threaten their profitability [14]. Because of the
low economic returns in the green method, and small farmers are often unwilling to operate green agricultural products in China [15,
16]. In addition, the number of small farmers in China accounts for 98%,2 which seriously affects the green transformation of agri­
culture. So, improving economic performance has become a critical issue of China’s green agricultural transformation. Theoretically,
organizing small farmers to form marketing cooperatives is conducive to increasing the economic benefits of green production.
Marketing cooperatives have institutional advantages in terms of cost reduction and premiums in green farming, which may help
improve the economic benefits. On the one hand, marketing cooperatives operate green agricultural products for greater potential
economies of scale. The local market for green farming in China is not perfect, so the intermediate inputs and technologies required for
green crops need to be obtained from higher-level markets, which is necessary to organize small farmers to obtain economies of scale.
At the same time, with the increasing demand for green food, the number of farmers who switch homogeneous technical requirements
in the production of green agricultural products increases, which may increase the space for economies of scale in the production of
green agricultural products. On the other hand, marketing cooperatives can help achieve high-quality and high-price green agricul­
tural products through dedicated investment in post-production links such as brand building and green certification [17]. In fact, we
have observed most of the marketing cooperatives with high economic benefits in China operate green agricultural products. Ac­
cording to the survey data, the proportion of marketing cooperatives operating green agricultural products in the sample is up to
68.50%. In addition, the total income of marketing cooperatives operating green agricultural products is 11.89 million RMB (1.77
million USD) higher than that of marketing cooperatives do not. However, even some scholars believe that cooperatives play a positive
role in promoting China’s green transformation [18], few scholars have theoretically and empirically tested the role of marketing
cooperatives in promoting the economic performance of green agriculture.
In addition, will the improvement of economic performance reduce carbon emissions? Many studies have estimated the rela­
tionship between economic performance and carbon emissions from a macro perspective. For example, some scholars observe the “U”,
“inverted U”, and “inverted N” relationship between carbon emissions and economic performance [19–21]. However, few literatures
have analyzed the relationship between the economic performance and carbon emissions of green farming.
So, what is the relationship between green production and the economic performance of marketing cooperatives? Can marketing
cooperatives operate green agricultural products to reduce carbon emissions? What is the relationship between economic benefits and
carbon emissions in green method? An in-depth discussion of the above issues has important theoretical and practical significance for
promoting the development of green farming and clarifying the path of green transformation of China’s agriculture.
The marginal contribution of this paper is as follows. First, most studies only focus on the economic performance or carbon
emissions of green agriculture, but few comprehensively consider the economic benefits and carbon emissions of green agriculture and
the relationship between them. Secondly, most researches on the economic or carbon emission performance of green agriculture come
from field experiments and natural science experiments, and there are relatively few empirical tests from the micro perspective.
Finally, we use the endogenous switching regression model to test the relationship between economic benefits and green production,
which is conducive to weakening the endogenous problems caused by observable and unobservable factors.
The framework is as follows. The second part is the literature review. The third part is the possible ways to realize the economic
benefits and carbon emissions of green production of marketing cooperatives. The fourth part is the research design (methods, in­
dicators, and statistical description). The fifth part is the empirical results, and the sixth is the conclusion.

2. Literature review

2.1. Carbon emissions and economic performance of green farming

The economic performance and carbon emissions of green farming have been controversial. Green farming is often suggested as a
solution to the adverse environmental effects of food production. However, green farming will also bring about a decline in output and
low economic performance. At the same time, the decline in production may also increase carbon emissions. So even though most
scholars agree that green agriculture can reduce carbon emissions, there are still a few scholars who suggest that green agriculture can
also increase carbon emissions. For example, most organic cropping systems in England generate similar or greater carbon emissions

2
(According to the data of China’s third national agricultural census, by the end of 2016, there were 210 million agricultural households in China,
of which the number of small farmers with a business scale of fewer than 50 mu accounted for more than 98% of agricultural households.

2
Q. Zheng et al. Heliyon 9 (2023) e15913

per tonne of the crop compared with conventional systems [22]. The lower crop yields in green method mean more land must be
farmed to produce the same amount of food, leading to more soil carbon release, more deforestation, and more loss of wildlife habitat
[23–25]. Past studies of green farming on economic efficiency have mixed results. Some reports that the lower crop yield and higher
input in the green method, which makes economic performance very low [26,27]. For example, organic crop yields per hectare tend to
be 20–50% lower than in conventional farming, depending on the crop [28]. If a complete switch to organic production in England and
Wales would reduce total wheat and barley production by 58%, and total output in terms of food energy delivered would fall by 36%
[29]. The conventional farming system is still more attractive than organic farming because the sale price is the same for both systems
[30]. Generally speaking, the procurement cost of a green product is higher than regular products, and it adds additional cost for green
technology [31]. The complexity and particularity of green technology and the low maturity of the green food market have led to
higher costs, higher market risks and longer investment return periods of green agricultural technical advancement, makes them face
strong financial constraints [32]. The economic loss associated with the decrease in crop yields from organic agriculture was valued at
6115 million RMB (1019.2 million USD), or 5280 RMB (880 USD) per ha [33]. Compared with the traditional GDP derived from
agriculture, the per capita green agriculture GDP growth in China is relatively slow, and the proportion of green agriculture GDP to the
traditional GDP from agriculture is between 85 and 91% [34]. Others believe that green farming improves the quality of food and gets
better prices, thereby increasing economic performance. For example, The quality safety detection and the traceability system of
agricultural products have been gradually promoted, making the premium of green agricultural products continue to increase [35].
Firms should sacrifice short-term profits identifying green marketing schemes as a groundwork for future growth and its profit of scale
would create green investments in the future [36]. Some scholars also found that additional investment in ordering cost reduction
helps the buyers to save more money as well as to reduce the integrated expected total cost of the entire green supply chain system By
establishing an integrated multistage green supply model [37]. Organic farming practices, focused on agro-ecological health, have
long been centered on the idea that such approaches reduce resource intensity, and improve crop quality [38]. The economic value of
ecosystem services in organic farming can range from $1610 to $19,420 per hectare (ha) per year versus $1270 to $14,570 in con­
ventional farming [39].
Many scholars are also studying the relationship between economic performance and carbon emissions. For example, some scholars
observe the “U”, “inverted U”, and “inverted N” relationship between carbon emissions and economic performance [19–21]. In
addition, some scholars discussed the impact of renewable energy, technological innovation, sustainable finance on carbon emissions
from a macro perspective [40–44].
Many literatures focus on the economic performance or carbon emissions of green agriculture and the relationship between eco­
nomic performance and carbon emissions, but there are relatively few literatures systematically analyzing the economic performance
and carbon emissions of green agriculture and their relationship. In addition, most of the assertions about the economic benefits and
environmental effects of green agriculture come from field experiments and natural science experiments, and empirical test on the
economic benefits and carbon emissions of green agriculture from the micro perspective is relatively scarce.

2.2. Estimation method

OLS model is usually used to estimate the causal relationship of dependent variables as continuous variables. Considering economic
performance characteristics, we choose the OLS model as the basic model to estimate the relationship between green farming and
economic performance.
Given that some factors determining marketing cooperatives operate ordinary agricultural products or green agricultural products
are likely to influence their economic performance. Therefore, selection bias that may arise from both observable and unobservable
factors plays an important role in determining the impact of green produces on the economic performance of marketing cooperatives.
Endogenous switching regression (ESR) has certain advantages in comprehensively considering the endogenous problems caused by
observable and unobservable factors. We also use the ESR model proposed by Lokshin and Sajaia [45] to further empirically analyze
the relationship between green produces and its economic performance.
The existing research mainly uses the comparative analysis method to test the relationship between green agriculture and carbon
emissions, directly comparing the carbon emissions differences between green agricultural products and ordinary agricultural prod­
ucts. The carbon emissions are estimated by life cycle assessment (LCA). Generally speaking, the methods of carbon footprint ac­
counting include input-output analysis, LCA, etc. The macro-research mainly adopts the input-output method, which takes the whole
economic system as the boundary, and LCA accounts for the more microscopic organization and product level [46,47]. Considering
that we mainly focus on the difference in carbon emissions between green agricultural products and general agricultural products, LCA
is relatively applicable to estimate carbon emissions for this study.

3. Theoretical framework

3.1. Ways to realize the economic benefits of green production by marketing cooperatives

3.1.1. Economies of scale in green produce

Green production of marketing cooperatives helps to obtain internal economies of scale. Compared with conventional crops,
specific investment in production mainly refers to labor, and material capital-specific investment is higher in the green method. The
material capital-specific investment is mainly intermediate inputs such as low-toxic pesticides, machinery, and chemical fertilizers.
Labor-specific investment mainly refers to the technical product specifications, supervision, and management, primarily invested in

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Q. Zheng et al. Heliyon 9 (2023) e15913

producing green crops. The production of green crops has strict regulations on pesticides, chemical fertilizers, and field management,
and particular labor or systems are needed to supervise farmers. Therefore, the specific investment level of green crops in production is
high. China’s green agricultural products include pollution-free, green food, and organic food. These three types of certified agri­
cultural products and food have been certified by specialized agencies and have green labels or environmental labels, which are
defined as green agricultural products in a broad sense. Specifically, only low-toxic ecological pesticides can produce pollution-free
food and green food, and no pesticides are allowed to make organic food. Compared with highly poisonous pesticides, common
toxicity pesticides have a high price and slow effect and consume labor and material resources for pest control. Second, herbicides
cannot be sprayed in the production of green crops. It can only be weeded by flooding, mechanical weeding, or manual weeding. This
increases the investment in purchasing weeding machinery and the specificity of labor. In addition, green produce in some regions is
not as standard as conventional crops. The technologies and intermediate inputs required for green farming may be obtained from
higher-level markets. It will also increase transportation and labor costs. Therefore, marketing cooperatives help to share these human
and material-specific investments by uniting farmers.
The marketing cooperative operation of green crops may induce more small farmers to adopt green production technology, further
reduce transaction costs and production costs, and get the potential external economies of scale. Due to the local social characteristics
of China, marketing cooperatives are an important channel for other farmers to obtain information. When the marketing cooperative
performs better in managing green crops, other farmers in the region will also imitate it to reduce the cost of technology learning. The
increasing scale of green crops may induce nearby agro-dealer to provide intermediate inputs required for the operation of green crops
(such as low toxic pesticides, organic fertilizers, farm manure, etc.). Because creating and maintaining a wide range of regional service
markets is an essential factor inducing the development of the service market to reduce further the production cost of green agri­
cultural products operated by marketing cooperatives.

3.1.2. Value-added effect in postpartum

Marketing cooperatives realize the value-added effect of green agricultural products through brand building. The brand-building of
green agricultural products includes activities such as green certification, brand registration, and brand promotion, which need to
invest special human and material capital. Taking cooperatives as the carrier for green brand building is conducive to sharing the
material cost of brand building and solving the technical difficulties and trust risks faced by brand building. So the brand construction
of green agricultural products of marketing cooperatives can realize the optimal allocation of internal resources of marketing co­
operatives, effectively gather the majority of farmers, and form a community of interests integrating labor, capital, and technology.
Marketing cooperatives can help optimize the planting structure of agricultural products and promote the standardized production of
green agricultural products through green brand building, thereby improving the quality of agricultural products and raising the prices
of agricultural products. Moreover, the green agricultural product brand of the marketing cooperative has more decisive influence and
higher trust than the private enterprise brand and can create greater economic benefits.
To sum up, one of the ways for marketing cooperatives to operate green agricultural products to improve economic benefits is to
reduce production costs and transaction costs to achieve economies of scale in the green method. The other is to conduct high-quality
and high-price through investment in post-production links such as brand building and green certification.

3.2. The path of green produce by marketing cooperatives on reducing carbon emission

Cooperatives are beneficial to promoting small farmers to adopt green technologies, such as promoting small farmers’ chemical
fertilizer reduction [48], organic fertilizer application [49], soil improvement technology and pest management technology [50,51],
etc. Green farming practices by marketing cooperatives can mitigate carbon emissions in several ways. First, limiting the application of
synthetic fertilizers, herbicides, pesticides, etc., which can reduce carbon emissions. Second, using cover crops, crop rotations, and
compost in green farming can play an important role in maintaining optimal soil health and reducing carbon emissions [52–54].

Fig. 1. Theoretical framework diagram.

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Q. Zheng et al. Heliyon 9 (2023) e15913

3.3. The impact of economic benefits of green produce on carbon emissions

The economic performance of green produces impacts on carbon emissions through the path of increasing green supply and green
inputs. In theory, marketing cooperatives’ operation of green agricultural products positively affects their economic performance,
which will promote marketing cooperatives to adopt green technology (or increase green inputs). Carbon emissions will reduce with
the increase of green inputs. Therefore, marketing cooperatives operate green agricultural products to improve economic performance
and reduce carbon emissions.
The theoretical framework of the relationship between green farming, economic performance and carbon emissions is shown in
Fig. 1.

4. Methods and data

4.1. Model and variables

4.1.1. Methods of evaluating economic performance

(1) Foundation models

Because the dependent variable (total income) is a continuous variable, OLS models are used to preliminarily estimate the direction
and marginal effect of green farming of marketing cooperative on its economic performance. The model is as follows:
∑
ln Incomei = β0i + β1i ∗ Agriproi + γ i Xi + ε i (1)

In equation (1), ln Incomei is “the economic performance of marketing cooperative”. Referring to earlier literature [55,56], “total
income of cooperatives (logarithm)” as the dependent variable.
Agriproi is a dummy variable that captures green production of marketing cooperatives (1 = green produce; 0 = otherwise). Besides,
Agriproi is also means “the ratio of green crops area by marketing cooperatives” for robustness analysis.
Xi is a set of control variables. Refer to other literatures [57,58], it mainly includes the cooperative surplus distribution system,
whether to set up a full-time accountant, the education level of the chairman, etc. One of the distributions of gains is expressed by
“return proportion according to transaction volume (amount)” [56,59]. εi is a random error term.

(2) Endogenous switching regression (ESR)

ESR simultaneously estimates the following three equations.

First, the behavior equation (whether or not to operate green crops):
Agriproi = αXi + ui (2)
Second, the treatment group result equation (performance equation of marketing cooperatives that have operated green crops)
ln Income1i = ηi1 Zi + v1i (3)
Final, the result equation of the control group (performance equation of marketing cooperatives that do not operate green crops)
ln Income0i = ηi0 Zi + v0i (4)

In equation (2), Xi is a set of control variables. ui is a random error term.

In equations (3) and (4), ln Income1i is the performance of marketing cooperatives operating green crops, and ln Income0i is the
performance of marketing cooperatives that do not operate green crops. Zi is a series of control variables that affect marketing
cooperative performance. v1i and v0i are the error terms of the resulting equation. ηi1 and ηi0 , a parameter to be estimated. Furthermore,
the main difference between Xi and Zi is that Xi contains at least one instrumental variable. Considering that marketing cooperatives
are usually located in a village and cover 90% of China’s villages, other farmers in the same village easily affect the members’ behavior.
However, the relationship between the behavior of other farmers and marketing cooperative performance is weak. Therefore, taking
“The proportion of the area of green crops in the village to the village’s total area” as an instrumental variable. The control variables
are the same as those in equation (1).
The results of ESR can not only give the differential impact of factors on whether the marketing cooperative operates green crops
and income but also calculate the average treatment effect of the marketing cooperative operating green crops on the performance of
the experimental group and the control group through the coefficient of ESR.
Average treatment effect of experimental group:
ATT = E(ln Income1i |Agriproi = 1) − E(ln Income0i |Agriproi = 1) (5)
Average treatment effect of control group:
ATU = E(ln Income1i |Agriproi = 0) − E(ln Income0i |Agriproi = 0) (6)

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Q. Zheng et al. Heliyon 9 (2023) e15913

In equation (5), E(ln Income1i |Agriproi = 1) indicates the expected average income level of the experimental group when operating
green crops. E(ln Income0i |Agriproi = 1) represents the expected average income level of the marketing cooperative when the experi­
mental group operates green crops ⃒ and does not operate green crops.
In equation (6), E(ln Income1i ⃒Agriproi = 0) indicates the expected average income. Level of marketing cooperatives that do not
⃒
operate green crops in the control group if they operate green crops. E(ln Income0i ⃒Agriproi = 0) indicates the expected average income
level when the control group does not operate green crops.

4.1.2. Methods of evaluating carbon emission effect

LCA is a common method for estimating carbon emissions. It follows the ISO environmental management standards formulated by
the International Organization for Standardization, and mainly includes steps such as research objectives and scope definition, in­
ventory analysis, and impact assessment. Objectives and scope definition mainly include three aspects: research objectives, system
boundaries, and functional units. LCA evaluation results are only valid if the systematic boundaries of the study are properly defined
[60]. We mainly focus on the difference in carbon emission effect between green crops and traditional crops, so the system boundary is
defined as the whole production process of crops from land preparation, and sowing to harvest. Functional units are mainly used to
provide quantifiable benchmarks for each input and output of a product (technology or service) system within the boundary and are
the basis for comparing the performance of different research systems. Generally, the functional units available for agricultural-related
research mainly include three types: per unit yield, per unit area, and per unit output value. Most of the functional units are per unit
yield and per unit area [61,62]. So functional units are also measured per unit of production and per unit of area. Inventory analysis is
mainly to determine and quantify the corresponding resources, energy consumption, and various waste emissions that have an impact
on the environment at each stage from raw material acquisition, and product production to put into use within the system boundary,
and establish a relationship with resources and environment. A list database of related inputs and outputs. We sort out the production
input and output of crops within the system boundary and define the calculated carbon emissions to include agricultural inputs (such
as fertilizers, pesticides, agricultural films, etc.), agricultural machinery operations (such as sowing, arable land, transportation, and
harvesting) and carbon emissions from irrigation, etc. In addition, we also included direct N2O emissions from farmland due to ni­
trogen fertilizer application. The impact assessment mainly uses the corresponding carbon emission coefficients of various energy
sources and substances to convert various inputs in the inventory database into corresponding carbon emissions. The calculation
method is as follows.
Carbon footprint is uniformly expressed in CO2 emission equivalent (kg CO2-eq/units⋅season). CFA is carbon footprint per unit area,
the carbon footprint per unit yield is as a fellow.
CFA
CFy = (7)
B

In formula (7), CFy is the carbon footprint per unit yield. B is per unit yield.

CFA = CF + CFN2 O (8)

In formula (8), CF refers to the carbon dioxide emissions from various agricultural inputs during the process of crop sowing to har­
vesting, and CFN2 O refers to the direct emission of soil nitrous oxide.
∑
n
CF = AIi ∗ EFi (9)
i=1

In formula (9), i represents the ith input, AIi represents the input quantity of the ith input, and EFi represents the emission parameter of
the ith input.
12
CFN2 O = FCN ∗ EFdirect ∗ ∗ 298 (10)
44

In formula (10), FCN represents the nitrogen fertilizer application rate, kg/season; EFdirect is the direct emission factor of N2O emission
caused by nitrogen input. The recommended value of the average N2O emission factor for agricultural land in major regions of the
country is 0.0109 in Shandong Province, and 298 is the global warming trend of nitrous oxide on a 100-year scale.

4.2. Data

The data used in this study are mainly from the field survey data of 340 marketing cooperatives in China’s Shandong Province. It is
one of the earliest provinces in China to develop agricultural marketing cooperatives.3 The total amount of its marketing cooperatives

3
Shandong Province represents the development of marketing cooperatives mainly because, compared with other provinces in China, the number
of marketing cooperatives in Shandong Province accounts for the highest proportion. By the end of October 2019, there were 2,203,000 agricultural
marketing cooperatives registered according to China’s law. By the end of December 2019, there were 209,100 marketing cooperatives registered in
Shandong Province, accounting for 9.49% of the marketing cooperatives registered following the law in China.

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is large, and the development is relatively complete. The content includes the essential operation, industrial type, operation and in­
vestment of green crops, and governance mechanism (see Table 1).

5. Results

5.1. Result of economic performance

5.1.1. Statistical analysis

There is a significant difference in the performance of marketing cooperatives that operate green crops and do not operate green
crops in the difference test. The total income of cooperatives that operate green agricultural products is 11.89 million RMB (1.77
million USD) higher than that of marketing cooperatives that do not operate green agricultural products (see Table 2).
Governance structure also has a certain impact on marketing cooperative performance. Marketing cooperatives with standardized
governance structures are more profitable, grow faster, and have higher member satisfaction [66]. We examine marketing co­
operatives’ standardization through “distribution of gains” and “Does the marketing cooperative have a full-time accountant?”. A
full-time accountant means an accounting record for every transaction between members and the marketing cooperative, convenient
for refunding by transaction volume (transaction value). The higher the rebate ratio, the better its performance [8].
The chairman’s human capital and social network also significantly impact collective performance. For example, the entrepre­
neurial spirit of the chairman has a significant positive effect on the performance of marketing cooperatives [67]. The learning ability
and management ability of the chairman have a significant positive impact on the marketing cooperative performance [68]. “Edu­
cation of the Chairman” and “participation in mutual fund organizations” are usually used to measure the human capital and social
network of the chairman. Moreover, the number of members also has an important impact on marketing cooperative performance
[69]. The statistical description of each indicator is shown in Table 3.

5.1.2. Results of foundation models

The following tests are made to ensure the robustness and reliability of the estimation results. First, to ensure the stability of the
results, the “proportion of green crops operated by marketing cooperatives in the total area of marketing cooperatives” was replaced as
an independent variable to test its impact on the total income of marketing cooperatives. Second, to reduce the impact of hetero­
scedasticity, some variables are treated with logarithms (such as total income), and robust regression is carried out.
Finally, the results of the multicollinearity test show that there is no severe multicollinearity problem in the estimation results of
OLS (Variance Inflation Factor (VIF) is 1.13).
The results show that the operation of green crops by marketing cooperatives can significantly improve the performance of
marketing cooperatives when keeping other variables unchanged. The total income of marketing cooperatives operating green crops is
61.8% (e0.481–1), higher than those not. It is significant at the statistical level of 5% (see Table 4 column (1)). The larger the green crop-
growing scale is, the higher the performance of marketing cooperatives (see Table 4 column (2)) (see Table 5).
The control variables, such as the number of members, area, and the proportion of return according to transaction volume (amount)
significantly positively impact the total income of marketing cooperatives. According to the transaction volume return ratio, marketing
cooperatives’ total income will increase by 2.049 times (e1.115–1) for each additional unit (other variables remain unchanged). It is
significant at the statistical level of 1%. The performance of standardized marketing cooperatives is relatively good.

5.1.3. Results of ESR

The ESR model contains an instrumental variable, so the validity of the instrumental variable needs to be tested before ESR
estimation. Referring to other research [17,70], both instrument and control variables are included in the model for testing. The results
show that “the proportion of the area of green crops in the village to the total area of the village " has a significant impact on whether
the marketing cooperative operates green crops (statistically significant at the 5%), but has no significant effect on the income of
marketing cooperative. It is an influential instrumental variable.
The results show that ESR is applicable. First, the wald test rejects the null hypothesis that the behavioral and outcome equations
are independent at the 1% statistical level. Second, both r1 and r0 are significantly different from 0 at the 1% statistical level, which
means that both observable and unobservable factors affect the operation of green crops and the total income of the marketing
cooperative.
The results of ESR are as follows (see Table 6). In the selection equation, instrumental variables positively impact whether mar­
keting cooperatives operate green crops, which is significant at the statistical level of 1%. This means that the operation of green crops
in the village is an important condition for marketing cooperatives to operate green crops.
The correlation coefficients r1 and r0 of ui with v1i and v0i have clear economic implications [71]. First, r1 and r0 are statistically
significant at the 1% level. It shows that observable and unobservable factors affect whether the marketing cooperative manages green
crops and its total income. If it is not corrected, the estimated coefficients will be biased. Secondly, r1 is positive, indicating that there
may be a positive bias. Marketing cooperatives with low total income are more inclined to operate green crops. This positive bias is
reasonable because marketing cooperatives with relatively low total income are more conducive to increasing income by operating
green crops.
We estimate the average treatment effect of operating green crops on marketing cooperatives’ performance (Table 7). In general,
marketing cooperatives’ operation of green crops positively affects their total income, significantly at 1%. For marketing cooperatives
that operate green crops, their economic benefits will drop by 55.666% if they do not. For marketing cooperatives that do not operate

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Table 1
Carbon emission parameters of agricultural inputs.
Inputs Carbon emission parameters Parameter source

Fertilizer
Nitrogen fertilizer 1.53 kg CO2-eq/kg [63]
Phosphate fertilizer 1.63 kg CO2-eq/kg [63]
Potash fertilizer 0.65 kg CO2-eq/kg [63]
Pesticide
Insecticide 16.61 kg CO2-eq/kg [64]
Fungicide 10.57 kg CO2-eq/kg [64]
Herbicide 10.15 kg CO2-eq/kg [64]
Irrigation 1.23 CO2-eq/KW⋅h [63]
Seed
Wheat 0.58 kg CO2-eq/kg [64]
Corn 1.93 CO2-eq/kg [64]
Machinery 4.1 CO2-eq/KW⋅h [64]
Agricultural film 22.72 CO2-eq/kg [64]
Plastic bag 2.5 kg CO2-eq/kg [65]
Paper bag 1.07 kg CO2-eq/kg [65]
Diesel 2.63 kg CO2-eq/L [65]
Gasoline 2.26 kg CO2-eq/L [65]
Industrial organic fertilizer 0.15 kg CO2-eq/kg [65]

Table 2
The differences in the performance of marketing cooperative.
Variable Operate green crops No operate green crops Diff

Income 1306.31 (883.441) 117.113 (20.156) 1189.197*** (1398.676)

Note: 1. *** indicate the significance levels of 1%.

2. Values in parentheses are standard errors.

Table 3
Statistical description of marketing cooperative performance and its influencing factors.
Variables Explanation Obs Mean SD Min Max

Dependent income total revenue for MC in 2020 (RMB). 237 970.615 9762.534 0 150,000
variable
Independent greenap whether the marketing cooperative operates green crops (0 = no; 1 340 0.685 0.465 0 1
variables = yes))
proportion The area ratio of green crops operating by MC 340 0.409 0.345 0 1
education Education of the chairman (0 = primary school and below; 1 = 340 2.274 0.707 0 3
junior high school; 2 = high school; 3 = college or above)>
organizations Whether to participate in mutual funds and other financial 340 0.268 0.443 0 1
organizations (0 = no; 1 = yes)
members number of members 340 118.997 259.322 3 4000
area The total area of the marketing cooperative (mu) 259 1370.495 3275.762 0 30,000
accountant Does the marketing cooperative have a full-time accountant? (0 = 323 0.870 0.336 0 1
no; 1 = yes)
return Rebate ratio according to transaction volume (transaction value) 238 0.419 0.345 0 1
distance Distance to county (km) 323 18.639 12.443 0 70
share Enthusiasm of members to invest in shares (0 = very positive; 1 = 340 0.741 0.894 0 4
more active; 2 = General; 3 = not active; 4 = very inactive)
Instrumental vill-pro The proportion of green crops management area in the village 241 0.327 0.305 0 1
variable

Data source: calculated based on survey data.

green crops, the economic benefits will increase by 66.789% if they do. It also shows that the marketing cooperative operation of green
crops can significantly improve its economic benefits, proving the conclusions’ robustness.

5.1.4. Heterogeneity analysis

To further clarify the degree of influence of marketing cooperatives operating green agricultural products on marketing co­
operatives with different performance levels, this paper also makes a quantile regression estimation. The results are shown (see
Table 8).
When the performance level of marketing cooperatives is 0.25 or lower, the operation of green agricultural products by marketing
cooperatives has a significant positive impact on the current performance level. When the performance level of the marketing

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Table 4
The results of foundation models.
Variables Income (logarithm) Income (logarithm)

(1) (2)

greenap 0.481** –
(0.218)
return 1.115*** 1.148***
(0.383) (0.376)
education 0.263 0.256
(0.160) (0.159)
organizations 0.247 0.246
(0.271) (0.266)
share 0.054 0.050
(0.141) (0.154)
area 0.0001*** 0.0001***
(0.000) (0.000)
distance − 0.006 − 0.005
(0.009) (0.009)
accountant 0.607** 0.589**
(0.300) (0.298)
member 0.001 0.001
(0.0003) (0.0003)
proportion – 0.654*
(0.342)
Constant 2.324*** 2.394***
(0.518) (0.556)
Observations 197 197
R-squared 0.217 0.217

Note: 1. ***, **, * indicate the significance levels of 1%, 5% and 10%.
2. Values in parentheses are standard errors.

Table 5
Validity test of instrumental variables.
Variables Greenap Income

greenap – 0.581**
(0.225)
vill-pro 1.845** − 0.188
(0.865) (0.367)
return 0.903 1.155***
(0.574) (0.391)
education − 0.214 0.217
(0.266) (0.164)
organizations 0.923** 0.249
(0.430) (0.274)
share − 0.183 0.0447
(0.199) (0.144)
area 0.0001 0.0001***
(0.0001) (0.0001)
distance 0.002 − 0.005
(0.015) (0.009)
accountant 0.903* 0.570*
(0.504) (0.314)
member 0.0002 0.0005**
(0.0006) (0.0002)
Constant − 0.431 2.388***
(0.904) (0.523)
Observations 203 191
R-squared – 0.227

Note: 1. ***, **, * indicate the significance levels of 1%, 5% and 10%.
2. Values in parentheses are standard errors.

cooperative is 0.75 or higher, the marketing cooperative’s management of green agricultural products also has a significant positive
impact on the current performance level, but the magnitude of the effect decreases. It also shows that the marketing cooperatives with
low performance are greatly affected by their green agricultural product management, while the high-performance marketing co­
operatives are relatively limited.
In addition, when q = 0.75, the proportion of return by transaction volume and whether to set up full-time accounting also have a

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Table 6
The results of ESR.
Variables Greenap Income

Greenap (yes) Greenap (no)

vill-pro 0.885***
(0.234) – –
return 0.860** 1.658*** 1.094
(0.338) (0.523) (0.750)
education − 0.086 0.157 − 0.106
(0.135) (0.227) (0.289)
organizations 0.643*** 0.722** − 0.533
(0.232) (0.337) (0.737)
share − 0.103 − 0.063 − 0.009
(0.122) (0.199) (0.183)
area 0.0001 0.0002*** 0.0002
(0.0001) (0.0001) (0.0002)
distance − 0.001 − 0.010 0.040**
(0.008) (0.013) (0.020)
accountant 0.697** 1.233** 0.273
(0.298) (0.543) (0.726)
member 0.0005 0.0006 0.0017
(0.0005) (0.0005) (0.002)
Constant − 0.494 1.369* 1.761*
(0.465) (0.799) (0.916)
lns0 – – 0.302*
(0.282)
lns1 – 0.667*** –
(0.085)
r0 – – − 0.574*
(0.853)
r1 – 2.303*** –
(0.844)
Wald chi2 12.86** – –
Log-likelihood − 427.895
Observations 191 191 191

Note: 1. ***, **, * indicate the significance levels of 1%, 5% and 10%.
2. Values in parentheses are standard errors.
3. lns represents the square root of the variance of the residuals of the behavioral and outcome equations. lns1 represents the square
root of the residual variance between the behavior equation and the result equation of the experimental group. lns0 Represents the
square root of the residual variance of the behavior equation and the result equation of the control group.

Table 7
The average treatment effect.
Income of Greenap (yes) Income of Greenap (no) ATT ATU T-test change (%)

Greenap (yes) 4.685 3.009 1.675*** – 13.754 55.666

Greenap (no) 3.824 1.270 – 2.554*** 21.183 66.789

Note: ***, **, * indicate the significance levels of 1%, 5% and 10%.

significant positive effect on the performance of marketing cooperatives, which shows that when the performance of marketing co­
operatives reaches a certain level, the more standardized it is, the better the performance. The education level of the chairman has a
more significant impact on the marketing cooperatives with relatively low performance. It may be because the development of
marketing cooperatives with relatively low performance mainly depends on the human capital of the chairman. The higher-
performance marketing cooperatives have more complex management levels and rely more on the management team, such as the
board of directors, council, etc. The scale has a significant positive impact on the performance of marketing cooperatives at different
levels. On the one hand, the scale reflects the scale economy space that marketing cooperatives can obtain from operating green
agricultural products. On the other hand, it reflects the market bargaining position of marketing cooperatives, which also has an
important impact on the performance of marketing cooperatives.

5.2. Carbon emissions results

Marketing cooperatives grow grain food in 41.17% of all samples. Green food crops accounted for 57.14%, mainly wheat and corn.
The sample cooperatives operate fruit and vegetable crops accounting for 41.17%, of which green fruit and vegetable crops account for
85.71%. Most of the fruit and vegetable crops are melons and vegetables. Due to the variety of melons and vegetables, this paper
selected eight kinds of melons and vegetables to estimate their carbon emission effects which are over 20 samples. The carbon emission

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Table 8
The result of quantile regression.
Variables q = 0.25 q = 0.5 q = 0.75

(1) (2) (3)

greenap 0.566** 0.492 0.534**

(0.286) (0.385) (0.269)
return 0.416 0.690 1.185***
(0.416) (0.560) (0.391)
education 0.553*** 0.481* 0.248
(0.182) (0.244) (0.171)
organizations 0.214 − 0.116 0.242
(0.281) (0.378) (0.265)
share 0.0835 0.216 0.230*
(0.145) (0.195) (0.136)
area 0.0001*** 0.0001** 0.0001***
(0.000) (0.000) (0.000)
distance − 0.015 − 0.011 0.006
(0.011) (0.014) (0.010)
accountant 0.249 0.785 1.373***
(0.404) (0.543) (0.380)
member − 0.0001 0.0008 0.0005
(0.0004) (0.0006) (0.0004)
Constant 1.379** 1.855** 2.503***
(0.628) (0.845) (0.591)
Observations 198 198 198

Note: 1. ***, **, * indicate the significance levels of 1%, 5% and 10%.
2. Values in parentheses are standard errors.

effects of food crops are detailed in Table 9 and Table 10.

Table 9 shows the estimated carbon footprints of wheat and corn. The carbon footprint per unit area of green wheat is 2313.656
kgCO2-eq/hm2, and of conventional wheat is 2721.822 kgCO2-eq/hm2. It is consistent with the results for winter wheat in the North
China Plain [72]. The carbon footprint per unit area of green corn is 1906.894 kgCO2-eq/hm2, and conventional corn is 2043.136
kgCO2-eq/hm2. It is consistent with the results [73] for corn in the North China Plain. On the whole, the carbon footprint of green
grains is significantly lower than traditional grains. The carbon footprint per unit area of green wheat is 408.166 kgCO2-eq/hm2 lower
than conventional wheat, and 0.02 kgCO2-eq/kg lower carbon footprint per unit yield than conventional wheat. The carbon footprint
per unit area of green corn is 136.242 kgCO2-eq/hm2 lower than conventional corn, and 0.027 kgCO2-eq/kg lower carbon footprint per
unit yield than conventional corn.
Table 10 shows the carbon footprint of grapes, watermelons, and other greenhouse fruits and vegetables. On the whole, the carbon
footprint of most fruit and vegetable crops in green products is significantly lower than that of conventional production. For example,
the carbon footprint per unit area of green grapes is 1020.859 kgCO2-eq/hm2 lower than that of ordinary production, and the carbon
footprint per yield is 0.27 kgCO2-eq/kg lower. However, some melon and fruit crops have a higher carbon footprint per output unit
than traditional production. For example, the carbon footprint per unit yield of green watermelon is 0.021 kgCO2-eq/kg higher than
that of traditional watermelon, and the carbon footprint per unit yield of green strawberry is 0.435 kgCO2-eq/kg higher than that of
traditional strawberries. Notably, the carbon footprint per unit area of green products such as strawberries and watermelons is
significantly higher than that of ordinary production. That’s because the yield of green agricultural products is much lower than that of
ordinary agricultural products. This also shows that if green production leads to a significant reduction in crop yields, it is not
conducive to realizing carbon emission effects.
It can also be seen in greenhouse vegetables. For example, green radish’s carbon footprint per unit output is also significantly higher
than ordinary production’s (see Table 10 for details).

5.3. Discussion

The conclusions are as follows.

First, the empirical result is a significant positive relationship between green farming and economic performance. That is, mar­
keting cooperatives that operate green agricultural products have higher economic performance than those that do not. And the larger
the area of green agricultural products of marketing cooperatives, the higher their economic performance. It is consistent with the
direction of theoretical prediction. This is consistent with the findings that most successful marketing cooperatives in Africa usually
manage high-value crops [74]. It can bring farmers sustainable economic benefits when managing high-value-added crops [75]. In the
green planting mode of frog-rice in China, the economic performance is increased by 37% [76].
Secondly, from the perspective of carbon emissions per unit area, operating green agricultural products can reduce carbon
emissions. That is, the carbon emission per unit area of green agricultural products is significantly lower than that of ordinary agri­
cultural products. For example, the carbon footprint of green grains is significantly lower than traditional grains. However, the carbon
emission per unit output of some green agricultural products is higher than that of ordinary agricultural products, which is inconsistent

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Table 9
The carbon footprints of wheat and corn in the green or conventional method.
Input Wheat Corn

Green Conventional Green Conventional

Fertilizer (kgCO2-eq/mu) 61.2 61.2 61.2 61.2

Nitrogen fertilizer
Phosphate fertilizer 32.6 32.6 16.3 16.3
Potash fertilizer 6.5 6.5 4.875 4.875
Pesticide (kg CO2-eq/mu)
Insecticide 0 16.61 4.153 4.153
Fungicide 5.285 5.285 0 2.643
Herbicide 0 10.15 0 5.075
Irrigation (kgCO2-eq/KW⋅h/mu) 3.69 3.69 2.46 2.46
Seed (kg CO2-eq/mu) 8.7 8.7 2.895 2.895
Machinery (kgCO2-eq/KW⋅h/mu) 3.758 4.211 2.735 4.1
Mechanical tillage 0.167 0.167 0.167 0.167
Mechanical sowing 0.083 0.083 0.167 0.167
Mechanical spraying 0.333 0.667 0.167 0.500
Mechanical harvesting 0.333 0.110 0.167 0.167
CO2 emissions per mu (kg CO2-eq/mu)> 121.735 148.946 94.617 103.7
Direct emission of N2O per unit area (kg CO2-eq/mu) 32.509 32.509 32.509 32.509
Carbon emissions per unit area (kg CO2-eq/hm2) 2313.656 2721.822 1906.894 2043.136
Carbon emissions per unit yield (kg CO2-eq/kg) 0.343 0.363 0.254 0.227

Table 10
Carbon footprint of fruit and vegetable crops in the green or conventional method.
Input Grape Watermelon Strawberry

Green Conventional Green Conventional Green Conventional

Nitrogen fertilizer (kgCO2-eq/mu) 0 15.3 7.65 22.95 38.25 153

Phosphate fertilizer (kgCO2-eq/mu) 0 16.3 4.89 14.67 48.9 40.75
Potash fertilizer (kgCO2-eq/mu) 0 6.5 5.2 10.4 19.5 19.5
Industrial organic fertilizer (kgCO2-eq/mu) 0 0 37.5 26.25 3.75 7.5
Insecticide (kgCO2-eq/mu) 0 16.61 4.983 16.61 16.61 41.525
Fungicide (kgCO2-eq/mu) 0 10.57 3.171 10.57 31.71 52.85
Herbicide (kgCO2-eq/mu) 0 0 0 5.075 0 10.15
Irrigation (kgCO2-eq/KW⋅h/mu) 12.3 12.3 12.3 18.45 12.3 12.3
Agricultural film (kgCO2-eq/mu) 1317.76 1317.76 45.44 45.44 113.6 113.6
Plastic bag (kgCO2-eq/mu) 0 0 15 25 0 0
Paper bag (kgCO2-eq/mu) 16.05 10.7 0 0 10.7 0
Diesel (kgCO2-eq/L/mu) 0 0 7.89 7.89 131.5 52.6
Gasoline (kgCO2-eq/L/mu) 0 0 0 0 67.8 45.2
CO2 emissions per mu (kgCO2-eq/mu) 1346.110 1406.040 144.024 203.305 494.620 548.975
Direct emission of N2O per mu (kgCO2-eq/mu) 0.000 8.127 4.064 12.191 20.318 81.273
Carbon emissions per ha (kgCO2-eq/ha) 20191.6 21212.5 2221.3 3232.4 7724.1 9453.7
Carbon emissions per kg (kgCO2-eq/kg) 0.673 0.943 0.064 0.043 0.687 0.252

Input Eggplant Cowpea Radish

Green Conventional Green Conventional Green Conventional

Nitrogen fertilizer (kgCO2-eq/mu) 76.5 76.5 76.5 76.5 30.6 38.25

Phosphate fertilizer (kgCO2-eq/mu) 81.5 81.5 81.5 81.5 12.2 16.3
Potash fertilizer (kgCO2-eq/mu) 32.5 32.5 32.5 32.5 9.75 13
Industrial organic fertilizer (kgCO2-eq/mu) 7.5 0 0 0 60 37.5
Insecticide (kgCO2-eq/mu) 0 99.66 0 83.05 0 4.152
Fungicide (kgCO2-eq/mu) 0 63.42 0 52.85 2.642 0
Herbicide (kgCO2-eq/mu) 0 50.75 0 50.75 0 5.075
Irrigation (kgCO2-eq/KW⋅h/mu) 18.45 18.45 49.2 73.8 36.9 36.9
Agricultural film (kgCO2-eq/mu) 113.6 113.6 113.6 227.2 113.6 113.6
Plastic bag (kgCO2-eq/mu) 75 100 0 0 1.25 1.25
Paper bag (kgCO2-eq/mu) 0 0 0 0 0 0
Diesel (kg CO2-eq/L/mu) 0 0 0 0 0 0
Gasoline (kg CO2-eq/L/mu) 0 0 0 0 11.3 15.074
CO2 emissions per mu (kgCO2-eq/mu) 405.050 636.380 353.300 678.150 278.268 281.102
Direct emission of N2O per mu (kgCO2-eq/mu) 40.636 40.636 40.636 40.636 16.255 20.318
Carbon emissions per ha (kgCO2-eq/ha) 6685.3 10155.2 5909.0 10781.8 4417.8 4521.3
Carbon emissions per kg (kgCO2-eq/kg) 0.178 0.226 0.197 0.288 0.147 0.100

12
Q. Zheng et al. Heliyon 9 (2023) e15913

with the direction of theoretical prediction. For example, the carbon emission per unit output of green watermelon and strawberries is
higher than that of ordinary watermelon and strawberries. We found that the carbon emissions from using fertilizer and pesticides in
watermelon and strawberries are also significantly lower than that of ordinary ones, but the output of green strawberries and
watermelon is much lower than that of ordinary strawberries and watermelon. Because the theoretical mechanism mainly focuses on
the difference between the input process of green agricultural products and ordinary agricultural products, and does not include the
yield factor, which has produced some deviations, but it does not affect the overall conclusion.
Finally, the economic performance of green agriculture also reduces carbon emissions. Economic performance affects carbon
emissions by acting on green inputs. Marketing cooperatives will operate green agricultural products when they gain higher economic
performance than non-green agricultural products. With the increase of green agricultural products, the green investment will
inevitably increase, thus reducing carbon emissions. So considering the green input process, economic performance improvement can
significantly reduce carbon emissions.
Based on the above conclusions, we found the following points and combined them with China’s actual environment.
First, although there are some deviations from the theoretical analysis, green agriculture’s carbon emission performance results are
consistent with the operating environment of green agricultural products in China. Because although China’s green agriculture has
developed for many years, it is still in the primary stage. The imperfect green input market and the immature green technology have
led to a sharp decline in the output of some green agricultural products, which makes the carbon emission per unit output of green
agricultural products higher than that of ordinary agricultural products. In addition, in this situation, the economic performance of
green agricultural products also needs to be realized through economies of scale and post-production value-added.
Secondly, marketing cooperatives have certain institutional advantages in operating green agricultural products. However, with
the rapid increase in the number of marketing cooperatives in China, the green transformation of China’s agriculture still needs to be
faster, which is also reasonable. The growth rate of China’s marketing cooperatives is fast, but the proportion is still not high, and the
high-quality marketing cooperatives are very few.4 The market share of green agricultural products by marketing cooperatives is still
very limited. In addition, even if the marketing cooperatives’ operation of green agricultural products is conducive to improving
economic efficiency, the cooperatives may need more capital, human resources and infrastructure to operate green agricultural
products. However, It is undeniable that marketing cooperatives are still an important part of the supply of green agricultural products
in China and the mainstay of promoting the green transformation of China’s agriculture, which is consistent with the view of [77].

6. Conclusions

6.1. Summary

The core of the green transformation of agricultural production lies in maximizing economic performance and minimizing carbon
emissions with minimal inputs such as pesticides and fertilizers. Marketing cooperatives have unique institutional advantages in
organizing small farmers to operate green crops and may be an important path for China to achieve green transformation.
The conclusion shows that marketing cooperatives’ operation of green crops can significantly increase total income. After weak­
ening the endogenous, this conclusion still holds. Moreover, the higher the proportion of green crops operated by the marketing
cooperative, the higher the performance of the marketing cooperative. That is, the total revenue of the cooperative will increase by
92.3% for each additional area in the green method. It is worth noting that operating green crops has a more significant impact on the
performance of relatively low-performing marketing cooperatives but has a limited impact on the performance of high-performing
marketing cooperatives. There are two paths for improving economic benefits: one is to achieve economies of scale in production,
and the other is to achieve high quality and good prices through green brand building. Second, on the whole, green production reduces
carbon emissions. Even though some products (such as watermelon and strawberry) have higher carbon emissions per unit output than
ordinary production due to the reduction of green production technology, it does not affect the overall result. Third, the economic
performance of green agriculture also reduces carbon emissions. Based on the above conclusions and the theoretical mechanism, it can
be concluded that the economic performance of marketing cooperatives operating green agricultural products will reduce carbon
emissions.

6.2. Policy implications

Clarifying the economic benefits and carbon emission benefits of marketing cooperatives operating green agricultural products
provides a micro perspective for the government to formulate scientific and reasonable agricultural green transformation policies.
Locking the research object in the micro main body makes the research conclusion more practical and instructive. First of all,
intervention measures to increase the production of green agricultural products. On the one hand, it is necessary to strengthen the
research and development of green technology and overcome the problem of substantial reduction in production caused by green
agriculture from the perspective of technological progress. On the other hand, appropriate policy subsidies will be given to the types of
agricultural products whose green production has substantially reduced production. Secondly, standardize marketing cooperatives.

4
According to China’s statistics, by the end of 2018, the number of cooperatives registered by the law reached 2.173 million, accounting for 0.8%
of the total number of farmers, and the number of cooperatives with good development was less than 1/3, which was 81.31 times higher than that of
2007.

13
Q. Zheng et al. Heliyon 9 (2023) e15913

The more standardized marketing cooperatives operate green agricultural products, the higher the economic benefits, and also
reduced carbon emissions to a greater extent. Promoting and standardizing the development of marketing cooperatives is conducive to
the promotion and application of green technology on the one hand, and to the improvement of the economic benefits of green
products on the other hand. With the strengthening of the rectification of non-standard cooperatives in China in recent years, the
number of marketing cooperatives has been increasing, and the quality has also been improved, creating conditions for China to realize
the green transformation of agriculture. Finally, strengthen the market supervision of green agricultural products, promote the
establishment of the market mechanism of high quality and high price of green agricultural products, increase the post-production
value-added effect of green agricultural products, and optimize the market environment for marketing cooperatives to operate
green agricultural products.

6.3. Limitations and future work

Limited to the availability of data and the lack of research ability, the paper still needs to improve, such as the insufficient sample
size. The micro-investigation data in this paper mainly comes from 340 samples in China’s Shandong Province and the sample range
needs to be further expanded. In addition, there is also a need for a long-term perspective to observe the economic and carbon emission
benefits of green agricultural products and ordinary products, which is also the subject of further research in the future.

Author contribution statement

Qiufen Zheng: Conceived and designed the experiments; Performed the experiments; Analyzed and interpreted the data;
Contributed reagents, materials, analysis tools or data; Wrote the paper.
Jiacheng Liu: Conceived and designed the experiments; Analyzed and interpreted the data.
Hongbin sun: Contributed reagents, materials, analysis tools or data.

Data availability statement

The authors do not have permission to share data.

Declaration of competing interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to
influence the work reported in this paper.

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 Journal of Business Research 165 (2023) 114063

Contents lists available at ScienceDirect

Journal of Business Research

journal homepage: www.elsevier.com/locate/jbusres

“Good Times–Bad Times” – Relationship marketing through business cycles

Roberto Mora Cortez a, *, Wesley J. Johnston b, Michael Ehret c
a
Department of Entrepreneurship and Relationship Management, Southern Denmark University, Universitetsparken 1, 6000, Kolding, Denmark
b
Center for Business and Industrial Marketing, Georgia State University 35 Broad St. NW, 30303, Atlanta, GA, USA
c
Department of Marketing, School of Business, Economics and Social Science, University of Graz, Universitätsplatz 3, 8010, Graz, Austria

A R T I C L E I N F O A B S T R A C T

Keywords: Business cycles (BCs) can alter the conditions for long-term business-to-business (B2B) relationships. Based on
Relationship marketing relationship marketing (RM) and interorganizational learning theories, the authors propose a model that explains
B2B relationship configurations that reveal opportunities under economic uncertainty. In the Pilot Study, the authors
Economic crisis
identify key mechanisms of RM process (communication openness, technical involvement, and customer value
Business cycle
Multi-group analysis
anticipation) and performance outcomes (price, cost-to-serve, and expectation of relationship continuity) from
Interorganizational learning the supplier’s view. In Study 1, the proposed model is tested with a sample of large size, market leader firms in
times of economic crisis (T1). In Study 2, conducting a multi-group analysis, the same sample is used to test the
model in times of recovery/expansion (T2). The findings offer directions for suppliers on how to leverage B2B
relationships through a BC. Particularly, the authors indicate that supplier’s performance is influenced differ­
ently by RM mechanisms during times of economic crisis versus times of recovery/expansion.

1. Introduction
The positive effects and dynamics of relationship marketing (RM)
have been well established in the literature (e.g., Palmatier, Dant,
Grewal, & Evans, 2006; Zhang, Watson IV, Palmatier, & Dant, 2016),
especially for business-to-business (B2B) settings (Mora Cortez &
Johnston, 2017). However, the influence of increasing competition,
customer complexity, and market turbulence is creating a latent hazard
for the sustainability of established buyer–seller relationships. Nordin
and Ravald (2016) assert that a long-term relationship can suffer from a
change in customer needs or when the supplier’s portfolio and strategy
are modified. These changes are commonly triggered by fluctuations in
the business environment (Dekimpe & Deleersnyder, 2018). One key
contextual factor is a change in the economic trajectory. The contraction
facet of a business cycle (BC) is characterized by a downturn in gross
domestic product (GDP) and local currency depreciation. For example,
Thailand experienced a drop in GDP growth from 5.5% to − 10% during
the Asian crisis with a fall of the Thai baht from approximately 25 baht
per 1 USD to>50 baht (Grewal & Tansuhaj, 2001). In this scenario, high
levels of uncertainty and related threats endanger the viability of an
organization (Ellram & Krause, 2014). Therefore, companies strive to
manage and survive economic fluctuations. Crises emerge from a bank
run and/or correction in the exchange rate of a country. The latter can
be identified more objectively (Dutt & Padmanabhan, 2011) and, thus, is
the focus of this research.
Extant literature on RM suggests that interorganizational learning is
an important way for firms to access markets, develop marketing re­
sponses, and leverage process capabilities of partners (e.g., Im & Rai,
2008; Mora Cortez & Hidalgo, 2022; Yang, Fang, Fang, & Chou, 2014).
In this sense, Williamson (1991) recognizes that bilateral relationships
can be established to minimize potential governance problems during
the exchange. The advantage of organizations over markets (i.e., nomi­
nal price dependency) and hierarchy (i.e., authoritative control) lies in
leveraging the human ability to take initiative, cooperate, and learn
(Ghoshal & Moran, 1996; Im & Rai, 2008). Therefore, if organizations
fail to create the relationship context necessary to build new knowledge,
economic failure is anticipated (Holmqvist, 2003; Ghoshal & Moran,
1996). Particularly, macro-economic uncertainty introduces relevant
contingencies to the exchange, creating an adaptation problem (Heide,
1994).
Prior research on transformational relationship events has generally
focused on ad hoc strategies (e.g., Salo, Tähtinen, & Ulkuniemi, 2009)
and the attitudes and behaviors of practitioners (e.g., Nordin & Ravald,
2016), neglecting the potential impact of environmental turbulence. The
repercussions of economic swings have been widely investigated from
different perspectives, including those of market orientation (Brenčič,

* Corresponding author.
E-mail addresses: rfmc@sam.sdu.dk (R. Mora Cortez), wesleyj@gsu.edu (W.J. Johnston), michael.ehret@uni-graz.at (M. Ehret).

https://doi.org/10.1016/j.jbusres.2023.114063
Received 16 November 2022; Received in revised form 18 May 2023; Accepted 21 May 2023
Available online 27 May 2023
0148-2963/© 2023 The Author(s). Published by Elsevier Inc. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
R. Mora Cortez et al.
Pfajfar, & Raskovik, 2012), psychology (Halpern, 1989), social policy
(Weick, 1988), sales force activities (Lee & Cadogan, 2009), strategic
capabilities (Grewal & Tansuhaj, 2001), technological structure (Pau­
chant & Douville, 1994), and trust and privacy on the Internet (Luo,
2002). In an effort to keep developing the understanding of buyer–seller
relationships, Nordin and Ravald (2016, p. 2496) called for research
regarding the need to explore relationship dynamics in business contexts
characterized by high turbulence following quantitative testing. A BC
accounts for high turbulence during economic contraction (Ellram &
Krause, 2014; Jüttner & Maklan, 2011), providing an appropriate
setting for this research.
Industrial suppliers, such as Grainger, successfully navigated
customer relationships during the subprime mortgage crisis and read­
apted when the economy expanded again, making clear that firms adjust
their behavior during a BC (Dixon & Adamson, 2012). What have they
done? Buyers and sellers, via social networks, foster communication,
involvement, and value anticipation to adjust the direction of a rela­
tionship. Previous research on RM has focused on general strategies for
managing relationship performance, such as identifying learning pro­
cesses to improve absorptive capacity of firms (Lichtenthaler, 2009),
knowledge sharing ambidexterity (Im & Rai, 2008),
conflict-coordination learning based on positive attitudes and avoidance
behaviors (Chang & Gotcher, 2010), accounting for strength-of-ties by
relational embeddedness and knowledge redundancy (Rindfleisch &
Moorman, 2001), or interactive learning involving experience sharing
and shared interpretation among individuals of different organizations
(Yang et al., 2014). However, none of these valuable studies has
explained how a firm should adapt relationship mechanisms during a
BC.
A review of the BC marketing literature indicates the need for
research in a B2B setting, extending the study of economic fluctuations
beyond the often-used U.S. context (see Dekimpe & Deleersnyder,
2018). Emerging economies are notorious for a substantial share and a
critical role of interorganizational relationships in business organization
(Khana & Palepu, 2010). For a substantial share of emerging economies,
commodities dominate gross domestic products (GDP) that are noto­
rious for cyclical behavior (Drechsel & Tenreyo, 2018).
To the best of our knowledge, there is no previous work that in­
tegrates a BC, an industrial setting, and an emerging economy. We add
to this body of research by studying the impact of RM process on
determining the specific contribution of long-life customers in emerging
economies during periods of contraction and expansion. We investigate
these phenomena in the context of the recent fall of commodities. In
brief, this paper will address this research gap and contribute a frame­
work that answers: (1) How is RM process linked to firm performance
during a BC (from the supplier’s perspective)? and (2) What are the different
mechanisms related to increased firm performance during both times of crisis
(contraction) and recovery (expansion)?
We adopt RM and interorganizational learning theories to identify
relationship tenets that help suppliers find the way to sustain or increase
performance from their B2B long-life customers during economic
swings. We contribute to the RM literature and BC literature. First, we
identify the key relationship process mechanisms explaining the diver­
gence between managing B2B markets in times of economic crisis and
recovery: (A) communication openness, (B) technical involvement, and
(C) customer value anticipation, which have direct and indirect effects
on the supplier’s performance. Second, we test the difference in the
modeled relationship mechanisms, allowing the identification of clear
strategies to manage a BC. This is consistent with calls to make the
recommendations in BC studies more actionable and concrete (e.g.,
Dekimpe & Deleersnyder, 2018). Finally, unlike most extant work in the
RM and BC domains that has examined performance as an aggregative
measure (e.g., Grewal & Tansuhaj, 2001) or through price fluctuations
(e.g., Gordon, Goldfarb, & Li, 2013) at the firm or category level (see
Dekimpe & Deleersnyder, 2018, p. 33), we consider three outcome
variables: (1) selling price, (2) cost-to-serve, and (3) expectation of
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relationship continuity, at the customer level. The recent coronavirus
situation and Ukraine conflict are calling for more research in crisis
settings (e.g., Mora Cortez & Johnston, 2020), positioning this study as
timely and needed.
2. Theoretical background
2.1. Business cycle (BC) and relationship marketing (RM)
A BC involves a period of expansion in many economic activities,
followed by a period of general recession/contraction. The critical facet
of a BC is the contraction (also referred to as crisis under a more specific
definition). According to Grewal and Tansuhaj (2001, p. 68), a crisis
represents “a low probability, high impact situation that is perceived by
critical stakeholders to threaten the viability of the organization.” Eco­
nomic crises are indicated through price volatility that forces people and
organizations to coordinate economic systems through the use of
endogenous and exogenous information (Dutt & Padnamabhan, 2011;
Brenčič et al., 2012). Crises represent a form of volatile, discontinuous
change that raises economic uncertainty (Faulkner, Feduzi, & Runde,
2017). Economic actors perceive uncertainty as threats and/or oppor­
tunities (Gilbert, 2006). Linguistically, the term weiji (crisis in Mandarin)
has two meanings, danger and opportunity (Lee, Beamish, Lee, & Park,
2009). Therefore, the hostile environment provided by economic crises
not only has a downside, but also can offer a firm an opening for growth.
Indeed, Austrian business cycle theory holds that price movements
indicate dis-equilibria and signal the need for adjustment of business
organization (Richardson, 1990). In short, an economic crisis holds a
potential scenario of very limited firm growth driving industry towards
decline. At the same time, price-swings signal the need to adjust business
organization. Thus, crises offer opportunities for firms to learn, adjust
and grow faster than others, and such top growing firms are crucial to
the recovery of the economy (Peric & Vitezic, 2016).
Mainstream economic theory, while relatively effective to charac­
terize equilibrium situations, tends to be less informative about the
dynamics associated with infrequent events associated with uncertainty,
such as economic crises (Faulkner, Feduzi, & Runde, 2017). Also,
financial markets are particularly poor at identifying a crisis coming
(Pattillo & Berg, 2000). Against this background, economic approaches
based on uncertainty highlight the contribution of interorganizational
networks for adjusting economic organization in dis-equilibrium and
foster learning processes (Araujo & Easton, 2012; Frazier et al., 2009).
Thus, long-term relationships between customers and suppliers, due to
interaction and learning, may be seen as a way out of critical situations
and crises (Brenčič, Pfajfar, & Raskovik, 2012). The literature suggests
taking refuge in long-term planning, having a high focus on the customer
(e.g., Sherman, 2014).
In the context of buyer–seller relationships, four foundational tenets
of RM are mentioned in the marketing literature: (1) business in­
teractions result in economic and/or social outcomes; (2) these out­
comes are continuously compared with alternatives to determine the
level of engagement in the business relationship; (3) positive outcomes
during the exchange increase trust and commitment; and (4) positive
business interactions produce relational exchange norms that guide the
relationship (e.g., Palmatier, Scheer, Evans, & Arnold, 2008). The out­
comes at the dyadic level are critical for a comprehensive understanding
of RM. While economic rewards, such as perceived value (e.g., increased
value-in-use), are relevant, social rewards, such as affective reactions (e.
g., satisfaction) and sharing ethics/morals, are at least equally mean­
ingful (Hütten, Salge, Niemand, & Siems, 2018; Mora Cortez & John­
ston, 2020). Additional attitudinal and behavioral elements highlighted
in the marketing literature are sense of fairness, negotiated rules, and
reciprocal actions (Tangpong, Li, & Hung, 2016). Several relational el­
ements, such as trust (Doney & Cannon, 1997), commitment (Morgan &
Hunt, 1994), cooperative norms (Cannon & Perreault Jr., 1999), power
(a)symmetry (Narayandas & Rangan, 2004), and relationship stages and
R. Mora Cortez et al.
dynamics (Zhang et al., 2016), support the thesis of long-term B2B re­
lationships as a quasi-integrated structure for scrutinizing market per­
formance (Im & Rai, 2008). Therefore, interorganizational relationships
are fertile ground to explore exchange mechanisms that overrule po­
tential negative circumstances in a BC.
In particular, Hütten et al. (2018) suggest that advancing RM theory
requires further understanding of buyer–seller relationships as a dia­
lectical process. This view proposes that firms exist in a diverse world
characterized by the desire for domination and control. Thus, conflict is
key for defining the nature of dialectical processes, representing the
confrontation between two entities that embody opposition as a source
of a generative mechanism. The opportunity for enriching extant liter­
ature derives from the dialectical tensions. Such tensions are defined as
“two co-existing contradictory forces with conflicting goals” (Fang,
Chang, & Peng, 2011, p. 774). Tensions are not negative per se, and they
are always present (Hütten et al., 2018). The dialectical tensions lead to
development and change in relationships. In this vein, a potential pos­
itive outcome is generated by the opportunity for buyer and seller to
work together coordinately.
Research on the dark sides of relationships (Jap & Anderson, 2007;
Villena, Choi, & Revilla, 2021) reveals detrimental characteristics of
buyer–seller relationships, such as conflict, opportunism or unethical
behavior (Oliveira & Lumineau, 2019.) Inter-organizational research
reveals that “such dark-side effects in their early appearance may be
useful if businesses are capable of effective learning” (Abosag, Yen, &
Barnes, 2016, p. 6). Indeed, a growing body of research reports practices
that help managers mitigate dark sides, stimulate learning, and elevate
relationship performance (e.g., Fang et al., 2011; Villena et al., 2021).
While dark sides are intrinsic trade-offs of inter-organizational
collaboration, a turn in a business cycle creates external economic
pressure on a relationship. The dialectical tension (seller desires [thesis]
versus buyer desires [antithesis]) directly derives from the context, and
so it should be exclusively investigated in a specific setting (Hütten et al.,
2018; e.g., economic crisis). In the following section, we focus on the
impact of the business cycle on buyer–seller-relationships.
2.2. Business cycle (BC) and interorganizational learning
Related to the dialectical view of buyer–seller relationships, the
marketing field acknowledges that inter-firm relationships become
critical to firms’ success when the firms encounter such external
competitive pressures in a turbulent business environment (Tangpong
et al., 2016). Imbalanced relationship tensions between organizations
can be solved through interorganizational learning. If an economic crisis
(environmental uncertainty) is strong enough to generate behavioral
uncertainty (i.e., inability to accurately predict the behavior of other
actors), both parties may have less commitment to the collaboration and
explicitly seek self-interest goals, which ultimately influence the effec­
tiveness and outcomes of the collaboration (Heirati et al., 2016, p. 51).
Firms could simultaneously facilitate knowledge exchange and pro­
tect their core proprietary knowledge, diminishing the usefulness of the
interaction (Yang et al., 2014). Particularly, key decision-makers in both
seller and buyer can develop different attitudes toward the economic
crisis and its conflicting consequences. For example, some managers
with positive attitudes toward conflict will be open to discussing
opposing views with the exchange partner, while managers with nega­
tive attitudes will tend to seek harmony and keep differences of opinion
from being expressed (Chang & Gotcher, 2010). In addition, the fluc­
tuations in a BC can drive knowledge appropriation hazards, emerging
from the self-interest of the exchange partners, to internalize and use the
core proprietary knowledge and skills of the other partner beyond the
scope of cooperation (Yang et al., 2014). Hence, identifying dyadic
learning mechanisms to increase performance during a BC is imperative
for firms.
Based on dynamic interorganizational learning theory, a successful
process of buyer–seller learning through a BC would result from a
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Journal of Business Research 165 (2023) 114063
balance between joint acting (application/exploitation) and joint
experimenting (generation/exploration), which is complex to achieve
(Holmqvist, 2003). The danger of misunderstanding the relationship
process mechanisms in a BC is that it can serve as catalyzer for escalating
tension, which consequently “is motive for punishing non-cooperative
behavior, adding further costs, wasting opportunities and it has the
potential to cause severe and unrepairable conflict” (Abosag et al., 2016,
p. 6). At the same time, crises and uncertainty indicate the need and
opportunities for interorganizational learning and adapting economic
production to changing economic conditions. Overall, interorganiza­
tional learning is a key theme to explore in BCs, as buyer–seller re­
lationships should be managed in a very particular manner to foster
value-based cooperation and adaptation during a threatening context
(Tangpong et al., 2016).
Relationship marketing links the key insights of interorganizational
research with operational aspects of marketing. As a major implication,
marketing organizations need to move the focus from supplier processes
and control toward customer-perceived value-in-use and relational
processes. Relationship marketing has identified three key processes
that foster interorganizational learning (Grönroos, 2004; Grönroos &
Voima, 2013): (1) buyer–seller communication that opens opportunity for
feedback and learning beyond supplier-driven promotion (Grönroos,
2004; Duncan & Moriarty, 1998); (2) technical involvement, such as
customization of products and services, sharing of resources, interor­
ganizational coordination of processes (joint processes help to oper­
ationalize collaboration across organizational boundaries and stimulate
interorganizational learning [Grant, 1996; Grönroos & Voima, 2013]);
and (3) customer value anticipaton: Assuming that economic performance
is determined by the value-in-use of resources, suppliers need to estab­
lish customer-perceived value as the true north of their marketing ac­
tivities (Ballantyne & Varey, 2006; McDonald, Kleinaltenkamp, &
Wilson, 2016). Explicit policies for anticipating customer-percieved
value work as pillars for opportunities for adjusting value creation
under uncertainty.
3. Overview of studies
We first conducted a two-stage workshop with practitioners in B2B
settings to discuss the literature on RM and develop a framework to
manage BCs. Hence, the Pilot Study goal is to investigate the main
relationship mechanisms that could help differentiate how to manage
buyer–seller relationships in times of crisis versus times of recovery.
Consensus was reached in regard to the main mechanisms derived from
the literature (e.g., Grönroos, 2004). Subsequently, in Study 1 we con­
ducted an empirical assessment of the proposed model with a sample of
large size, market leaders in an emerging market during a period of
currency-type economic crisis (T1), while in Study 2 we conducted an
empirical assessment of the proposed model with the same sample
during a period of recovery (T2). The goal for the multi-group compar­
ative analysis is to explore the differences in managing B2B relationships
during a BC. This allows practitioners to establish specific strategies to
drive firm performance. We summarize the research method in Fig. 1.
The selection of an emerging economy (Chile) answers calls for more
marketing research in non-developed settings (Burgess & Steenkamp,
2006) and particularly Latin America (Fastoso & Whitelock, 2011).
4. Pilot study: Scrutinizing the relationship marketing process
4.1. Research context
Chile has been one of the fastest-growing emerging economies over
the past decade and has shown an export-driven success that made it a
role model for the region, obtaining some recognition in the interna­
tional business literature (Keegan, 2014). Moreover, it decreased
poverty from 26% to 7.9% between 2000 and 2015 (World Bank, 2019).
However, due to the abrupt decrease of copper prices, reduction of
R. Mora Cortez et al.
Fig. 1. Overview of the Research Method.
private investment, and adjustments of government policy, Chile’s
average GDP growth of 5.33% during the period 2010–2013 dropped
to<1.92% GDP growth during the period 2014–2016 (World Bank,
2019), affecting companies’ financial performance.
Chilean GDP growth fell continuously from 6.11% in 2011 to 1.19%
in 2017 (with the exception of the period 2014–2015, when relatively
stable values were reached). The Chilean peso depreciated>30% (above
the 20% threshold for claiming an economic crisis; Dutt & Padma­
nabhan, 2011) to the USD in the period July 2011-May 2017 (SII, 2019),
from an exchange rate of 1 USD = 462 CH to 1 USD = 671 CH. The
overall context affected particularly industrial production (intrinsically
related to mining), showing a pronounced and consistent slowdown
until 2017 (Trade Economics, 2019). Accounting for the 19-month
period, January 2016-July 2017, industrial production performed
poorly with an overall negative result during 13 months of this period,
reaching an average downturn of − 2% per month (Trade Economics,
2019). Therefore, Chile shows several signs of an economy under
currency-type economic crisis during 2017 (T1).
The year 2018 started with a much higher copper price (3.28 USD
per pound) in comparison with 2017 (2.48 USD per pound), and sus­
tained an average price superior to 2017, 2016, and 2015 (London Metal
Exchange, 2020). As a consequence, the industrial production enjoyed a
stronger performance with an average growth of + 3.6% during the
January-December 2018 period (Trade Economics, 2019). The Chilean
peso also appreciated to a minimum exchange rate of 1 USD = 589 CH
during 2018 (SII, 2019). Hence, during 2018 (T2) the Chilean economy
shows indications of recovery/expansion. The year 2017 (T1) connected
with the year 2018 (T2) accounts for a BC. In summary, Chile offers an
example how an economy can grow out of a crises. We find corre­
sponding insights in our study of interorganizational relationships dur­
ing the Chilean crisis.
5. Approach
We conducted a two-stage online workshop with 15 experienced B2B
managers in cultivating customer relationships to drive their business
unit performance. During the first session, we discussed the key pro­
cesses of relationship marketing (see Grönroos, 2004): (1) communica­
tion, (2) interaction, and (3) value. The process approach fosters
managerial relevance (Kouamé & Langley, 2018). Participants were
informed about the general description of the concepts and reviewed
select papers on RM (e.g., Grönroos, 2011; Harmeling, Palmatier,
Houston, Arnold, & Samaha, 2015). During the second session, the
participants in conjunction with the authors discussed the challenges
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Journal of Business Research 165 (2023) 114063
related to a BC and how the readings assimilated practical experiences.
The participants, after two rounds of iteration, concluded that (A) the
main tenet related to communication is buyer–seller communication
openness; (B) the main tenet related to interaction is buyer–seller tech­
nical involvement; and (C) the main tenet related to value is customer
value anticipation (by the supplier; see Fig. 2).
5.1. Key mechanisms of relationship marketing process
Buyer-seller communication openness. In general, communication re­
fers to the human activity that links people together and creates and sustains
relationships (Duncan & Moriarty, 1998; Mohr, Fisher, & Nevin, 1996).
The buyer–seller communication starts by the parties having the desire
to invest time in communicational exchanges. We define communication
openness as the extent to which a firm is accessible to establish a dialogue
with other parties. Openness is posited to be one way by which rela­
tionship gaps can be handled constructively and can lead to buyer–seller
investments and willingness to participate in a more entrenched, deeper
interaction (Kalafatis, 2000).
Communication implies discrete events through time, not necessarily
related. Many academicians emphasize two-way communication
through better listening to customers and the idea that communication
during the whole customer experience journey can build or destroy
important brand relationships (Mohr et al., 1996). The focus of the
communication process goes beyond simple persuasive intention; it can
involve informing, answering, and listening. Therefore, persuasion has
limited impact compared to communication. The notion of persuasion as
traditionally used in short-term, transaction marketing is manipulative
(Duncan & Moriarty, 1998, p. 2). Companies interested in being more
customer-oriented and in developing relationships focus on communi­
cation rather than just persuasion. The buyer–seller communication is
the platform on which relationships are built (Palmatier et al., 2006).
Buyer-seller communication provides data or raw facts about the state of
the relationship, making it the most basic level of understanding for a
supplier (Mora Cortez & Johnston, 2018). Overall, communication
openness involves the willingness to engage in formal and informal
sharing of simple (non-sensitive) messages through frequent multiple-
channel two-way dyadic interchanges (Jüttner & Maklan, 2011).
Buyer-seller technical involvement. Impersonal mass communication
must be supplemented, especially in B2B and service categories, by
personal customized communication that, by definition, is collaborative
(Duncan & Moriarty, 1998, p. 8). Since collaboration is implemented
organizationally, relationships across the value chain become more
important. Technical involvement refers to an in-depth, specialized
R. Mora Cortez et al.
Fig. 2. Conceptual Model.
buyer–seller interplay, sharing sensitive operational information and estab­
lishing cross-organizational collaboration. Involvement implies continuous
interaction as a chain of events, being more complex and intertwined
than buyer–seller communication events. Jüttner and Maklan (2011)
acknowledge that buyer–seller relationships are based on exchange of
information and technical integration. In an involvement process, both
one- and two-way communication tools are used systematically to
strengthen the relationship and increase frequency of interaction.
Involvement developed between parties through technical and multi-
level interaction (Heirati et al., 2016) is key to understanding business
relationships as a social phenomenon.
Technical involvement — as a collaborative idea — is based on the
parties’ willingness to share sensitive risk and risk event-related infor­
mation, contributing to uncertainty reduction (Jüttner & Maklan, 2011;
Mohr et al., 1996). Collaboration provides the continuity needed for
growing shared understanding. As firms collaborate more, buyer–seller
involvement strengthens. Through buyer–seller technical involvement,
data become meaningful, contextualized and useful (i.e., information;
Mora Cortez & Johnston, 2018). Benefiting from inter-firm technical
involvement is never deterministic, and the current literature sheds light
on factors such as trust, commitment, coordination, and social ties that
help firms build effective inter-firm interaction (Heirati et al., 2016, p.
50). Information exchange becomes spontaneous between collaborating
parties as they work together over time. During the involvement process
between customer and supplier team members, sensitive technical and
market information is transferred or acquired (Grant, 1996). Overall,
B2B technical involvement implies effort and adaptation within the
dyad, especially for the supplier.
Customer value anticipation. Suppliers are not able to offer pre­
determined value to customers, only the prerequisites for the value
(Flint, Blocker, & Boutin Jr., 2011). Thus, to better understand the
customers’ perspective of value, it is necessary to comprehend and
identify what is important to them and what motivates them to use the
system or product, i.e., what they value (Yang et al., 2014). Firms should
possess the abilities to anticipate customers’ potential value (Narver,
Slater, & MacLachlan, 2004). Customer value anticipation refers to “a
supplier’s ability to look ahead at what specific customers will value
from supplier relationships including their product and service offerings
and the benefits they create given the monetary and non-monetary
sacrifices that must be made to obtain those offering benefits” (Flint
et al. 2011, p. 219). From the seller’s perspective, it is not only a process
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for anticipation, but also a process for predicting the outcomes of the
marketed offerings.
The value concept is intrinsically related to the desires and needs of
the customer during the exchange and usage process. The marketing
department may take the lead in this process and predict the outcomes
throughout the whole interaction journey with customers. In particular,
customers are expecting that firms anticipate their needs and desires,
even if “they themselves sometimes cannot” (Zhang, Liang, & Wang.,
2016, p. 3726). Customer value anticipation is only possible in situa­
tions where the supplier has robust knowledge about the relationship
and the industry. This know-how is embedded in the shared under­
standing of the parties, allowing the anticipation of future needs and
behaviors (Flint et al., 2011). Customer value anticipation (CVA) rep­
resents knowledge application derived from communication (representing
dialogical intent) and involvement (representing collaboration), which,
in turn, represent knowledge generation (Grant, 1996).
5.2. Additional variables
During the workshop, we also discussed the potential effect of other
factors. Particularly, we provided information regarding a meta-analysis,
which identified several customer-focused, seller-focused and dyadic
antecedents for the effectiveness of RM (see Palmatier et al., 2006).
Many participants mentioned that, in times of crisis, the buyer–seller
similarity (dyadic antecedent) was important. Similarity is defined as the
convergence of culture, values, and goals between organizations (Pal­
matier et al., 2006). However, several participants indicated that this
factor should be operationalized in a more granular manner. It was
suggested that buyer–seller top management compatibility (i.e., similarity)
is the adequate level of analysis and should be included in the model.
5.3. Performance outcomes
Most participants acknowledged that the key performance outcomes
in a BC are: (1) selling price and (2) cost-to-serve. Both measurements
are the drivers of customer profitability, an important variable identified
in marketing literature (e.g., Palmatier et al., 2008). Surprisingly, the
effectiveness of RM efforts posits a poor influence on seller objective
performance or does not appeal to the context (Palmatier et al., 2006;
2007). More recent research shows that strong B2B relationships facil­
itate a simplified buying process and act as a shelter against adverse
R. Mora Cortez et al.
economic environments (Johnson & Sohi, 2016). However, the paths
behind reaching the seller’s desired outcomes through a BC remain
unexplored (Studies 1 and 2 focus). Many participants are also con­
cerned with how the RM process affects expectation of continuity, which
is defined as “customer intention to maintain the relationship in the
future, which consequently captures the likelihood of continued pur­
chases from the seller” (Palmatier et al. 2006, p. 139). The RM process
was connected to the performance outcomes.
Finally, we conducted three rounds of discussion with the partici­
pants via email to consolidate their views on RM mechanisms in times of
crisis versus times of recovery. To discriminate the validity of our model,
we discussed alternative models, such as conflict-coordination learning
(see Chang & Gotcher, 2010), collaborative communication (see Mohr
et al., 1996), absorptive capacity (see Lichtenthaler, 2009), commitment-
trust theory (see Morgan & Hunt, 1994), and strength-of-ties (see Rind­
fleisch & Moorman, 2001), that could drive firm performance during a
BC. Particularly, we compared the pros and cons of every model, and
participants provided experiential arguments supporting the proposed
RM process model. We present our conceptual model in Fig. 2.
6. Study 1: Measurement during the crisis
6.1. Sample and data collection
We focused on large size, market leader Chilean B2B companies
operating mainly with local business customers in different industries
(see Table 1 for more details about the sample). These firms were able to
be profitable during 2017 and survived the crisis. We collected data
during the period January-March 2018 with help from a top-ranked
Chilean business school, through the collaboration of companies that
continuously participate in the activities held by this entity. We obtained
a sample size of 289 complete and usable answers (from a sample frame
of 897 B2B companies [32.21% response rate]), a configuration
consistent with previous studies on this topic (e.g., Grewal & Tansuhaj,
2001). As an incentive to participation, we offered to share the results of
the research. Before applying the survey instrument, subjects evaluated
their industrial context for 2017 (regarding being in an economic crisis)
on an 11-point scale with 0 = not at all and 10 = completely; the average
result was 7.89. Non-response bias was assessed by a comparison of
sample characteristics to known values of the population frame, such as
perception of economic performance during the crisis, number of em­
ployees, and industries served (Hulland, Baumgartner, & Smith, 2018).
The procedure revealed non-significant differences between the sampled
and target populations. We required participants to be informed about,
engaged with, and interested in day-to-day operations of the focal
buyer–seller relationship (Gupta, Kumar, Grewal, & Lilien, 2019). All
informants reported being directly responsible for managing customer
relationships and their outcomes for at least four years. We instructed
each informant to think about a salient long-term relationship (≥5
years) and answer the survey with respect to that customer. To ensure
variation in the RM process, managers were randomly asked to focus on
Table 1
Sample Characteristics.
Criterion Sample size (n = 289)
Gender (Female) 16.96%
Industry
Mining 28.37%
Construction 24.57%
Industrial services 13.84%
Pulp & paper 10.03%
Energy 23.18%
Experience in the industry (years) 18
Respondent’s title
C-level/owner 9.68%
VP/director 45.67%
Manager 44.64%
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Journal of Business Research 165 (2023) 114063
a weak, average, or strong relationship. Finally, the questionnaire was
translated from the original English version to Spanish and used the
back-translation procedure by a professional translator (independent to
the authors) to guarantee that meaning was upheld.
6.2. Measures
We followed Hulland et al.’s (2018) recommendations for marketing
survey research. To test our model, we measured the RM mechanisms
with items generated from the literature, obtaining a list of 13 items (see
Appendix for questionnaire). Following Mohr et al. (1996), communi­
cation openness and technical involvement were separated from and to
the customer. Based on the Pilot Study, the focus was only from the
customer. The items were assessed on an 11-point scale (0 = not at all,
10 = completely). Buyer-seller top management compatibility was
measured based on Ellram and Krause (2014). The two economic
dependent variables were measured with quasi-objective items (answers
were checked by at least two practitioners of each company), where the
respondents identified the extremes of the scale with real data, using a 9-
point scale. For example, for the question ER2 (“This customer pays
more [price per unit] in comparison with the rest of our customers’
portfolio in this segment”), the respondent assigned the lowest unitary
price as 1 and the highest as 9, and created intermediate scale points by
simple rule of three. To measure the expectation of continuity, we used a
subjective measure (“Once the market recovers, the likelihood that this
customer continues a business relationship with us is very high”).
Moreover, to control for other exogenous effects on the dependent
variables, we included previous status (2016) of the relationship with
the customer (5-point scale with 1 = very weak and 5 = very strong),
focus of the offering (dummy variable with 1 = product and 0 = service)
of the supplier, focus of the offering (dummy variable with 1 = product
and 0 = service) of the customer, industrial sector (using industry
dummy variables), market turbulence (using a composite variable based
on Jaworski and Kohli [1993]), competitive intensity (using a composite
variable based on Jaworski and Kohli [1993]), and number of years of
business experience of the supplier’s respondent.
Though the use of quasi-objective measures for the dependent vari­
ables (DVs) is robust to common method variance (CMV), to minimize
its potential bias, we applied five ex ante suggestions from the literature:
(1) respondents were assured of the anonymity and confidentiality of the
study, (2) the survey design used different endpoint scales for the
dependent variables, (3) item ambiguity was checked by a panel of three
academic experts (from a large state university in the United States), (4)
data collection was conducted at two different time points (T1A, T1B; the
DVs were measured at T1B, two months later than T1A), and (5) we
randomized the order of the questions per section using Qualtrics
(Hulland et al., 2018; Podsakoff, MacKenzie, Lee, & Podsakoff, 2003).
6.3. Measure validation
We conducted confirmatory factor analysis (CFA) to assess psycho­
metric properties and convergent and discriminant validity for the
measurement model. We applied statistical reduction procedures to
purify the factors, including exploratory factor analysis (EFA), item-total
correlation, and reliability analyses (e.g., Cronbach’s alpha). We then
computed the standardized residual covariances and modification
indices for thorough review of the SEM to analyze potential item dele­
tion (Gerbing & Anderson, 1988). The initial CFA model did not have
particularly good fit: chi-square (χ2) = 305.2, d.f. = 51; comparative fit
index (CFI) = 0.80; Tucker-Lewis index (TLI) = 0.74; root mean square
error of approximation (RMSEA) = 0.16; and standardized root mean
square residual (SRMR) = 0.14.
After the purifying process, the RM process variables resulted in a set
of three, three and two items, respectively, and the dependent variables
were measured as single-item constructs. Marketing literature asserts
that using single-item measures is valid and reliable (e.g., Homburg,
R. Mora Cortez et al. Journal of Business Research 165 (2023) 114063

Schwemmle, & Kuehnl, 2015). The unidimensionality of the factor Table 3

model was initially achieved through EFA (maximum likelihood esti­ Construct Correlations and AVEs.
mation) with oblimin rotation, which allows for intercorrelations among COMa INV CVA
the dimensions. We computed Cronbach’s alpha, composite reliabilities b
Buyer-seller communication openness (COM) 0.764 0.653 0.626b
(CR), and average variances extracted (AVEs) as reliability measures for 0.678 0.494b
each construct. All CRs are > 0.70, all AVEs are > 0.50, and all Cron­ Buyer-seller technical involvement (INV)
bach’s alphas are > 0.70, indicating that the measures are reliable. We
summarize the results of the CFA in Table 2. Overall, each of the factor Customer value anticipation (CVA) 0.733

loadings was significant (p < 0.01) and > 0.50 on its respective a b
The diagonal values are the constructs’ AVE; p < 0.05.
dimension, suggesting that all indicators captured the constructs they
were designed to measure, indicating convergent validity (Gerbing & status of the relationship, and experience of the practitioner. The vari­
Anderson, 1988). We successfully established discriminant validity in ance explained (on average) for the endogenous constructs are 67.1%
line with Fornell and Larcker’s (1981) criterion, which requires that, for for the buyer–seller technical involvement, 60.1% for the customer
all pairs of factors, the squared estimated correlation is smaller than value anticipation, and 21.2% for the performance outcomes. Based on
each factor’s AVE. In addition, discriminant validity is established, in Westland’s (2010) algorithm, a minimum sample size of 137 (consid­
that all the correlations are statistically lower than 1 (Anderson & ering four latents and 11 items, 0.80 power, 0.30 effect size, and α =
Gerbing, 1988). The fit of the respecified model improved considerably 0.05) is needed to detect effect.1 Thus, our results are trustworthy from a
to χ2 = 38.2, d.f. = 17; CFI = 0.97; TLI = 0.95; RMSEA = 0.09; and power perspective.
SRMR = 0.04. Therefore, the constructs present robust psychometric
properties and the CFA model fits the data satisfactorily. The AVEs for
the constructs, along with their correlations, appear in Table 3. 6.5. Findings
To fully alleviate CMV concerns, per Podsakoff et al. (2003), we
included a direct measure of a latent common method factor, allowing Results are unexpectedly consistent across the three selected
items to load on their respective theoretical constructs as well as on a methods. We describe the results from MIIV-2SLS estimation, due to its
latent CMV factor, and examined the significance of the coefficients with robustness to missing variables, simultaneity, and reverse causality
and without this additional factor. The pattern and magnitude of path biases. All item loadings for their respective factors and most Sargan’s
coefficients did not change significantly and just about 1% of the vari­ tests indicate orthogonality of the residuals at the α = 0.01 level. The
ance is explained by the CMV factor. These analyses suggest that com­ MIIV-2SLS results are presented in Table 4.
mon method bias is not a major concern. In the price (PR) model, all path coefficients are significant at the α =
0.05 level, except the effects of buyer–seller technical involvement on
customer value anticipation and top management compatibility on price
6.4. Model estimation (see Table 4). The effect of buyer–seller communication openness on
buyer–seller technical involvement is positive and significant (β =
To test our models, we ran SEMs (in R software), with robust stan­ 0.883, p < 0.01). Buyer-seller communication openness has a positive
dard errors (MLR estimation) to account for heteroskedasticity. Models’ and significant effect on customer value anticipation (β = 0.729, p <
fit yielded acceptable values (CFIs > 0.92, TLIs > 0.90, and SRMR < 0.01). Buyer-seller technical involvement has no significant impact on
0.08; see Web Appendix A), according to Hu and Bentler’s (1999) rec­ customer value anticipation (β = -0.084, p > 0.05). Buyer-seller tech
ommendations. We note that RMSEA is higher than the suggested 0.06
threshold, but with a sample size < 250, considering CFI and SRMR, to
Table 4
make a judgment about fit is preferable (Hu & Bentler, 1999). Also, we
MIIV-2SLS Results.
tested our models using seemingly unrelated regression (SUR; Hen­
Path β (unstandardized) SE p-value Conclusiona
ningsen & Hamann, 2007) and model implied instrumental variables
with two-stage least squares estimator (MIIV-2SLS; Bollen, 2019; see PR Model
Sargan’s tests in Web Appendix B). On one hand, SUR allows estimating COM → INV 0.883 0.093 0.000 Significant
COM → CVA 0.729 0.213 0.001 Significant
all equations simultaneously with a generalized least squares estimator,
INV → CVA − 0.084 0.198 0.671 Non-significant
which takes the covariance structure of the residuals into account, INV → PR − 0.859 0.243 0.000 Significant
leading to efficient estimates (Henningsen & Hamann, 2007). On the CVA → PR 0.726 0.310 0.019 Significant
other hand, MIIV-SLS allows correcting for potential endogeneity TMC → PR − 0.474 0.379 0.211 Non-significant
CTS Model
threats by using observed variables in the model as instrumental vari­
COM → INV 0.883 0.093 0.000 Significant
ables (Bollen, 2019). The selection of the instruments follows Bollen and COM → CVA 0.729 0.213 0.001 Significant
Bauer’s (2004) algorithm. INV → CVA − 0.084 0.198 0.671 Non-significant
For the control variables, non-significant results were found for all INV → CTS 0.737 0.284 0.009 Significant
the proposed measures at the α = 0.05 level, discarding the potential CVA → CTS − 0.909 0.363 0.012 Significant
TMC → CTS − 0.176 0.443 0.691 Non-significant
effects coming from the industry classification, type of offering, previous
EC Model
COM → INV 0.883 0.093 0.000 Significant
Table 2 COM → CVA 0.729 0.213 0.001 Significant
CFA Results. INV → CVA − 0.084 0.198 0.671 Non-significant
INV → EC − 0.201 0.079 0.011 Significant
Latent variables Items Loadings Cronbach’s α CR CVA → EC 0.037 0.101 0.719 Non-significant
Buyer-seller communication COM1 0.909 0.905 0.907 TMC → EC 0.513 0.124 0.000 Significant
a
openness At the α = 0.05 level (two-tailed)
COM2 0.853
COM3 0.859
Buyer-seller technical involvement INV2 0.853 0.849 0.862
INV3 0.922
INV4 0.676
Customer value anticipation CVA2 0.805 0.839 0.845 1
The DV was operationalized as a single-item construct with item-reliability
CVA3 0.904
of 0.90.

7
R. Mora Cortez et al.
nical involvement is negatively related to the supplier’s selling price (β
= -0.859, p < 0.01). Customer value anticipation by the supplier has a
positive effect on the selling price for the supplier (β = 0.726, p < 0.01).
Finally, top management compatibility has no significant impact on
price (β = -0.474, p > 0.05). Therefore, suppliers managing long-term
relationships during times of crisis should maximize their learning
about customers’ needs and desires through discrete communication,
because buyer–seller technical involvement decreases selling prices for
the supplier. However, the possibility to increase prices is given by the
supplier’s ability to anticipate customer value.
In the cost-to-serve (CTS) model, all path coefficients are significant
at the α = 0.05 level, except the effects of buyer–seller technical
involvement on customer value anticipation and top management
compatibility on cost-to-serve (see Table 4). Buyer-seller communica­
tion openness significantly influences buyer–seller technical involve­
ment (β = 0.883, p = 0.000) at the α = 0.05 level. The effect of
buyer–seller communication openness on customer value anticipation is
positive and significant (β = 0.729, p = 0.001) at the α = 0.01. Buyer-
seller technical involvement has no significant impact on customer
value anticipation (β = -0.084, p = 0.009) at the α = 0.05 level. Buyer-
seller technical involvement has a positive and significant effect on the
supplier’s cost-to-serve (β = 0.737, p < 0.01). Customer value antici­
pation by the supplier has a negative effect on the supplier’s cost-to-
serve (β = -0.909, p < 0.05). Finally, top management compatibility
has no significant impact on cost-to-serve (β = -0.176, p = 0.691) at the
α = 0.05 level. On one hand, surprisingly, large suppliers managing
long-term relationships during times of crisis can diminish the cost-to-
serve customers via buyer–seller technical involvement. On the other
hand, a higher level of customer value anticipation leads to a higher
level of cost-to-serve customers.
In the expectation of continuity (EC) model, all path coefficients are
significant at the α = 0.05 level, except the effects of buyer–seller
technical involvement on customer value anticipation and customer
value anticipation on expectation of continuity (see Table 4). Buyer-
seller communication openness effect on buyer–seller technical
involvement is positive and significant (β = 0.883, p < 0.01). The effect
of buyer–seller communication openness on customer value anticipation
is positive and significant (β = 0.729, p = 0.001) at the α = 0.05 level.
Buyer-seller involvement has no significant impact on customer value
anticipation (β = -0.084, p = 0.671) at the α = 0.05 level. Buyer-seller
technical involvement effect on expectation of continuity is negative
and significant (β = -0.201, p < 0.05). Customer value anticipation by
the supplier has a non-significant effect on expectation of continuity (β
= 0.037, p = 0.719) at the α = 0.05 level. Finally, top management
compatibility has a significant effect on expectation of continuity (β =
0.513, p < 0.05; see Table 4). Therefore, suppliers managing long-term
relationships during times of crisis can take shelter in buyer–seller top
management compatibility in order to decrease the chances of rela­
tionship dissolution.
6.6. Post hoc analysis
In addition, we investigated buyer’s sharing commercial informa­
tion2 as a moderator for the link between technical involvement and
price, and the link between customer value anticipation and price. The
rationale is that the pressure from the economic downturn should foster
prices being subjected to bargaining. We specified a regression model
accounting for heteroskedasticity with technical involvement, customer
value anticipation, top management compatibility, control variables,
and the two interactions as predictors. This new model yielded an F-
statistic = 4.73 with 11 and 207 d.f., significant at the α = 0.01 level.
The R-squared of the model is 26.44%. The results suggest that the two
interaction variables are marginally significant (ps < 0.1; see Web
2
The variable INV1 is used as measure (see Appendix).
8
Journal of Business Research 165 (2023) 114063
Appendix C). First, the interaction between technical involvement and
buyer’s sharing commercial information significantly and negatively
influences a buyer’s selling price during an economic crisis (β = − 0.101,
p = 0.068). Therefore, large size suppliers with high levels of technical
involvement and high levels of buyer’s sharing commercial information
tend to significantly reduce their selling prices during an economic
crisis. It can be inferred that the buyer shares commercial information
(e.g., competitor prices) to put pressure on the seller prices, effectively
driving price discounts. Second, the interaction between buyer’s sharing
commercial information and customer value anticipation significantly
and positively influences a seller’s price during an economic crisis (β =
0.120, p = 0.080). Thus, the higher the level of buyer’s sharing com­
mercial information, the more positive is the slope associated with
customer value anticipation and selling price. Overall, large suppliers
can offset the enhanced negative effect of technical involvement if they
can utilize the buyer’s sharing commercial information to update and
improve their value propositions (e.g., showing value-in-use benefits
over rivals’ proposals).
7. Study 2: multi-group analysis after the crisis
We tested the proposed model with the same sample of B2B firms in
the Chilean market, but in a new setting of economic expansion (T2),
surveying the same informant of T1. The supplier’s managers agreed to
participate in the research again, as part of an industrial development
program in the host country. The subjects evaluated their industrial
context for 2018 (regarding being in an economic recovery) on an 11-
point scale with 0 = not at all and 10 = completely; the average result
was 8.04. We replicated the Study 1 methodological approach, using
MLR and MIIV-2SLS estimations. The MLR and MIIV-2SLS results are
similar in both direction and significance (see Web Appendix D). The
SEMs yielded satisfactory model fit considering PR, CTS, and EC as DVs
(CFI = 0.958, 0.935, 0.963; SRMR = 0.082, 0.083, 0.085, respectively).
These fit measures are in line with the established thresholds (Hu &
Bentler, 1999). All item loadings were > 0.50, all AVEs were > 0.50, and
all construct reliabilities were > 0.70. We found convergent and
discriminant validity for all factors, checked with the Gerbing-Anderson
(1988) and Fornell-Larcker (1981) criteria, respectively.
Based on the MIIV-2SLS model results (see Sargan’s tests in Web
Appendix E), interesting differences in the significance and direction of
coefficients are identified in comparison with Study 1 findings. For all
three models, the path coefficient for the buyer–seller communication
openness and customer value anticipation association (β = 0.615, p =
0.000) is significant at the α = 0.05 level. Conversely, the path coeffi­
cient for the buyer–seller technical involvement and customer value
anticipation association (β = 0.148, p = 0.163) is not significant at the α
= 0.05 level. Hence, during times of economic recovery, firms should
generate knowledge to adapt the relationship only via communication
(consistent with times of economic crisis). In the model with PR as DV,
the path coefficients linked to buyer–seller technical involvement and
top management compatibility effect on PR (β = 0.464; β = 0.436,
respectively) are significant at the α = 0.05 level, while the path coef­
ficient associated to customer value anticipation influence on PR is
marginally significant (β = 0.221, p = 0.092). To provide further detail
(using MLR estimation), we tested the difference between INV → PR
coefficient and CVA → PR and TMC → PR coefficients, finding positively
significant differences at the α = 0.10 level (i.e., βINV > βCVA and βINV >
βTMC). In the model with CTS as DV, only the influence of technical
involvement on CTS is significant (β = -0.451, p < 0.05), whereas the
coefficients for customer value anticipation and top management
compatibility effect on CTS.
(β = -0.183; β = -0.114, respectively) are not significant at the α =
0.05 level.
In the model with EC as DV, all the path coefficients linked to
technical involvement, customer value anticipation, and top manage­
ment compatibility are significant (β = 0.599, p = 0.000; β = 0.390, p =
R. Mora Cortez et al. Journal of Business Research 165 (2023) 114063

0.001; β = 0.890, p = 0.000, respectively). To provide further detail Table 6

(using MLR estimation), we tested the difference between INV → EC Results – Multi-group Analysis (from MLR estimation).
coefficient and CVA → EC and TMC → EC coefficients, finding non- Path βΔ (βT2- βT1) SE t-value p- Conclusion
significant differences at the α = 0.10 level. To validate that the find­ (T2 vs T1) unstandardized value
ings from Studies 1 and 2 are comparable and to what extent, we ran a DV: PR
measurement invariance test. This approach assesses a major potential COM → − 0.171 0.120 − 1.427 0.153 Non-
confound in the data: measures could behave differently in different INV significant
groups (i.e., T2 vs. T1). Our data support metric invariance (using MLR COM → − 0.239 0.175 − 1.364 0.173 Non-
CVA significant
estimation), which allows a meaningful comparison of slope differences INV → 0.318 0.189 1.683 0.092 Significant†
across groups (see Table 5). The fit of the model assuming metric CVA
invariance is acceptable and not significantly different from the less INV → 1.138 0.162 7.041 0.000 Significant*
constrained configural model (Δχ2PR = 1.950; Δχ2CTS = 3.503; Δχ2EC = PR
CVA → − 0.301 0.196 − 1.539 0.124 Non-
2.935; ps < 0.05).
PR significant
We formally tested the slope coefficient differences between the TMC → 0.221 0.113 1.955 0.051 Significant†
groups (T2 vs. T1) in R software, using MLR estimation. For all three PR
models, there are no significant differences in the COM → INV and COM DV: CTS
→ CVA coefficients at the α = 0.05 level. Thus, a change in the economic COM → − 0.136 0.122 − 1.112 0.266 Non-
INV significant
trajectory does not affect the relevance of the communication in COM → − 0.242 0.166 1.459 0.145 Non-
buyer–seller relationships as the coefficients remain similar (positive CVA significant
and significant). Conversely, the INV → CVA coefficient significantly INV → 0.322 0.183 1.765 0.078 Significant†
differs between the groups in all the models at the α = 0.10 level, with CVA
INV → − 0.756 0.197 − 3.834 0.000 Significant*
the recovery/expansion scenario showing higher influence of technical
CTS
involvement on customer value anticipation (Δβs range from 0.310 to CVA → 0.381 0.169 2.256 0.024 Significant*
0.322; see Table 6). CTS
In the model with PR as DV, both the INV → PR and TMC → PR TMC → 0.073 0.127 0.579 0.563 Non-
coefficients are significantly lower in the crisis scenario (Δβ = 1.138, p CTS significant
DV: EC
< 0.05 and Δβ = 0.221, p < 0.10). The association between CVA and PR
COM → − 0.171 0.124 − 1.381 0.167 Non-
remains statistically similar in both times of crisis and times of recovery/ INV significant
expansion (Δβ = -0.301, p > 0.10). In the model with CTS as DV, while COM → − 0.224 0.170 − 1.318 0.187 Non-
the CVA → CTS coefficient is significantly higher in times of recovery/ CVA significant
INV → 0.310 0.186 1.667 0.096 Significant†
expansion (Δβ = 0.381, p < 0.05), the INV → CTS coefficient is signif­
CVA
icantly higher in times of crisis (Δβ = -0.756, p < 0.05). In addition, the INV → 0.815 0.138 5.907 0.000 Significant*
TMC → CTS association (Δβ = 0.073, p = 0.563) does not differ between EC
the groups at the α = 0.05 level. In the model with EC as DV, both INV → CVA → 0.309 0.140 2.203 0.028 Significant*
EC and CVA → EC coefficients significantly differ between the groups, EC
TMC → − 0.052 0.098 − 0.528 0.597 Non-
with the recovery scenario showing higher influence for INV and CVA on
EC significant
EC (Δβ = 0.815, p = 0.000 and Δβ = 0.309, p = 0.028, respectively) at
the α = 0.05 level. Also, the association between TMC and EC does not
†
At the α = 0.10 (two-tailed) *At the α = 0.05 (two-tailed).
significantly differ between the groups (Δβ = -0.052, p > 0.10).
Overall, times of economic crisis/contraction provide less RM pro­
Table 7
cess opportunities for suppliers to increase customer-level profitability
Mechanisms for Successful Relationship Management of a Business Cycle (BC).
and expectation of relationship continuity. Regarding the nine links to
the DVs in each scenario (T2 vs. T1), in the crisis setting only three effects Variable Effect Effect Effect Overall Higher Order Effect on
on PR on CTS on EC Supplier and Relationship
are significantly higher than zero, while in the expansion setting, six
effects are significantly higher than zero (see Table 7). Buyer-seller Crisis/contraction
INV Profitability can be > 0, positive
technical involvement is the most controversial RM mechanism in – + –
impact on CTS should be higher
terms of volatility through a BC. During times of crisis, technical than negative impact on PR. Risk of
involvement has a negative influence on both price and expectation of relationship dissolution is increased
continuity and a positive influence on reducing the cost-to-serve cus­ CVA + – 0 Profitability can be > 0, positive
tomers. Probably, both supplier and customer are fully aware of the impact on PR should be higher than
negative impact on CTS
crisis risks and concentrate their efforts on reducing dyadic costs that TMC 0 0 + Risk of relationship dissolution is
decreased
Table 5 Recovery/expansion
Measurement Invariance. INV + – + Profitability can be > 0, positive
impact on PR should be higher than
2
Invariance d.f. CFI BIC Δ BIC Δχ p-value negative impact on CTS. Risk of
relationship dissolution is
DV: PR
decreased
Configural 62 0.938 7745
CVA + 0 + Profitability is likely to be > 0, and
Metric 67 0.940 7720 − 25 1.950 0.856
risk of relationship dissolution is
Scalar 72 0.942 7694 − 26 2.012 0.847
decreased
DV: CTS
TMC + 0 + Profitability is likely to be > 0, and
Configural 62 0.930 7978
risk of relationship dissolution is
Metric 67 0.931 7954 − 24 3.503 0.623
decreased
Scalar 72 0.933 7928 − 26 1.894 0.863
DV: EC
Configural 62 0.950 7550
Metric 67 0.951 7525 − 25 2.935 0.710
Scalar 72 0.953 7499 − 26 2.042 0.843

9
R. Mora Cortez et al.
could serve as an argument for the supplier to reduce its price. During
times of recovery, technical involvement has a positive effect on both
price and expectation of continuity and a negative influence on cost-to-
serve. A possible explanation is both supplier and customer being able to
perceive the growing opportunities, investing in new procedures or
developments that can increase the supplier’s cost-to-serve, but simul­
taneously driving a higher, acceptable selling price. The influences of
both CVA and TMC effect on the DVs are more stable through a BC, but
not entirely rigid. The CVA influence changes in the CTS model from a
negative effect to a zero effect, and in the EC model from a zero effect to
a positive effect. The TMC influence changes only in the PR model from a
zero effect to a positive effect (see Table 7).
8. General discussion
Marketing research has yet to focus on the normative guidelines for
managing an industrial business through a BC. Based on RM and inter­
organizational learning theories, the present research identifies and tests
a model to account for price, cost-to-serve, and expectation of continuity
variations during a BC in an emerging economy. The process approach
follows a temporal structure and increases managerial relevance
(Kouamé & Langley, 2018). Our findings demonstrate that large size,
market leader suppliers can effectively survive and thrive through a BC
via distinct RM mechanisms.
8.1. Theoretical implications
Our findings have important implications for theory. First, marketing
literature still questions how some firms can enhance their performance
through a BC and whether B2B relationships can serve as a quasi-
integrated structure to cope with such an economic turbulence. Previ­
ous research from both practice and academia (e.g., Grewal & Tansuhaj,
2001) has called for research on economic swings, focusing on the
downside of a BC in B2B contexts (Dekimpe & Deleersnyder, 2018) and
relational arenas (Ellram & Krause, 2014). Interorganizational theories
regularly claim the contribution of buyer-sellerships for navigating and
learning under economic uncertainty (Araujo & Easton, 2012; Frazier
et al., 2009). However, prior research on buyer–seller relationships has
neither explored particular relational mechanisms nor their role in
mitigating the financial impact of a BC empirically. We extend this
research stream by showing that a BC brings profitability opportunities
for the B2B supplier by nurturing a system of mechanisms from long-
term dyadic exchange, building over the communication → interac­
tion → value RM process (Grönroos, 2004). In this vein, we introduce the
main RM mechanisms (communication openness, technical involve­
ment, and customer value anticipation) that can be configured to suc­
cessfully navigate a BC, providing quantitative testing. In addition, the
performance outcomes are measured at the customer level, following
prior literature suggestions (e.g., Gupta et al., 2019). Extant research on
buyer–seller relationships through a BC, in turn, has been predomi­
nantly conceptual and silent on how managing B2B relationships can
differ from times of economic contraction to times of economic expan­
sion (Jüttner & Maklan, 2011). Investments in relationships need to
consider forward looking measures such as customer lifetime value
(Kumar & Reinartz, 2016). However, the ability to learn from a
customer through economic crises should be considered in customer
valuation approaches.
Second, we contribute to the dark side of B2B relationships’ theo­
retical underpinnings by showing that the inherent tension created in a
BC can be managed by RM mechanisms. This aligns with the view of
conflict as disagreement between partners that can be resolved as part of
ongoing business (e.g., Chang & Gotcher, 2010). The supplier, through
unique patterns of communication openness, technical involvement,
and customer value anticipation, can transform the tension into effective
learning for adapting the relationship during a BC. Thus, the economic
fluctuation can be used not only as a source of relationship maintenance
10
Journal of Business Research 165 (2023) 114063
but also to dissipate relationship darkness and to offer a more promising
relational future as new dyadic knowledge has emerged (Abosag et al.,
2016). The RM mechanisms also serve as nodes to extend the dialectical
view on buyer–seller relationships (Hütten et al, 2018). Particularly,
high levels of buyer–seller technical involvement are not always
required to manage tension (supplier desires versus buyer desires),
contesting that collaboration in B2B relationships comes without a
downside for both times of contraction and expansion (see Table 7). The
economic swing is an opportunity to see change as an ongoing possi­
bility to reach better dyadic results, and then the interorganizational
learning achieved serves as a win–win solution for both entities — by
positively synthesizing the thesis (supplier desires) and antithesis (buyer
desires; Hütten et al, 2018). The evidence for the key role of customer
value anticipation confirms the emerging research stream that reveals
both rationale and evidence for the impact of marketing processes that
explicitly target customer-pervieved value-in-use (Ballantyne & Varey,
2006; Grönroos & Voima, 2013; Macdonald, Kleinaltenkamp, & Wilson,
2016).
Third, we contribute to extending BC marketing literature outside
the often-used U.S. environment as requested by Dekimpe and Deleer­
snyder (2018). The investigation of buyer–seller relationships through a
BC in an emerging economy (Chile) also answers calls for more mar­
keting research in non-advanced settings (Burgess & Steenkamp, 2006)
such as Latin America (Fastoso & Whitelock, 2011). B2B relationships
are a source of learning for both supplier and buyer to enhance their
understanding of the market’s evolving nature (Holmqvist, 2003). Prior
research (e.g., Ghoshal & Moran, 1996; Im & Rai, 2008) notes that or­
ganizations can advantage other structural knowledge generation sour­
ces since challenges to prosperity can be idiosyncratic to the dyad and its
business network. This is especially relevant in emerging markets due to
the institutional voids that reign in such markets, which make it difficult
for marketers to obtain access to useful information (Pedada, Aru­
nachalam, & Dass, 2020). Overall, this study is consistent with the vision
for this century’s marketing research to be all about emerging markets
(see Sheth, 2011).
8.2. Managerial implications
Given that the proposed RM mechanisms influence differently the
customer level outcomes (i.e., selling price [PR], cost-to-serve [CTS],
and expectation of continuity [EC]), companies have to find ways to
manage simultaneously (1) communication openness (COM), (2) tech­
nical involvement (INV), and (3) customer value anticipation (CVA).
This section focuses on the managerial implications derived from our
findings through a BC. We suggest a set of RM strategies in the form of a
2x3 matrix, as shown in Fig. 3, for achieving firm goals: (1) increasing
PR, (2) reducing CTS, and (3) enhancing EC. We name each of the six
quadrants based on our empirical results. For times of crisis, the cells are
named: “Value anticipation based on distant communication,” “Cost-
oriented joint collaboration,” and “Dyadic top management consensus.”
For times of economic expansion, the cells are named: “Generative hard
work,” “Controlled technical deescalating,” and “Integrated optimal
balance” (see Fig. 3). Next, we discuss the specific RM strategies to
effectively manage each of these six quadrants.
Value anticipation based on distant communication. To increase the PR
during an economic crisis, suppliers need to reduce the INV with cus­
tomers, while being able to enhance CVA. The opportunity to foster CVA
has its origin in the supplier’s ability to learn about current customers’
needs and wants via communication. Hence, the main challenge for a
supplier is to establish high levels of communication without simulta­
neously increasing the technical collaboration with customers. This is
difficult, as communication leads to INV. However, communication
media such as email and telephone allow a more distant and controlled
conversation (e.g., Hutt & Speh, 2016) and can help suppliers to pur­
posively avoid deeper interaction (from a technical perspective).
Cost-oriented joint collaboration. To reduce the CTS during an
R. Mora Cortez et al.
Fig. 3. Relationship Marketing (RM) Strategies Matrix. *PR: Selling Price; CTS: cost to service; Expectation of Continuity: EC; communication openness: COM;
technical involvement: INV; customer value anticipation: CVA.
economic crisis, suppliers are recommended to establish a strong INV
with customers, while keeping ideas associated with customer value for
future times. The former can be explained by both supplier and customer
being concerned about the operational risks and concentrating the
technical work on cost-reducing opportunities, generating savings for
both actors. The latter can be explained by the supplier being potentially
forced to incur customer-specific technical investments (i.e., resources)
without the possibility of transferring or amortizing such additional
efforts, increasing supplier’s CTS.
Dyadic top management consensus. To enhance the EC during an
economic crisis, suppliers should be able to exploit TMC with customers,
nudging top managers to reach consensus on how to face the economic
crisis together. The crisis serves to focus the dyad on reciprocal actions
to overcome the financial threats (Tangpong et al., 2016). Also, sup­
pliers are advised to diminish INV with customers. A deeper, technical
collaboration in such a setting can result in additional conflicts that may
further erode the B2B relationship.
Generative hard work. To increase the PR during times of economic
recovery, suppliers can leverage their ability to be technically involved
with customers, to have compatible top managers with their counter­
parts, and to be able to anticipate customer value altogether. However,
the most influential factor is the INV. Hence, suppliers should primarily
work on collaborating (e.g., developing a new product/service, inte­
grating manufacturing, optimizing engineering processes). Exploiting
TMC and CVA should simply complement the advancement through
buyer–seller INV.
Controlled technical deescalating. To reduce the CTS during times of
recovery, suppliers are called to carefully deescalate INV. Neither CVA
nor TMC has an influence on accomplishing this goal. Hence, INV should
be diminished gradually to a point that still allows continuing to serve
the customer at a minimal (adequate) level of satisfaction. It is evident
that disengaging from the customer can save resources but would
negatively affect the likelihood of the supplier being able to increase
prices and avoid breaking up the relationship in the future (see Fig. 3).
Integrated optimal balance. To enhance the expectation of continuity
during times of recovery, suppliers enjoy the best set of possibilities as
all INV, CVA, and TMC can positively and similarly influence achieving
this goal. In this vein, suppliers can integrate efforts on INV, CVA, and
TMC to construct synergies (e.g., buyer–seller top managers enabling
digital communication and joint collaboration between operations,
11
Journal of Business Research 165 (2023) 114063
which could allow the supplier to better anticipate customer mainte­
nance needs). Nevertheless, some suppliers will not enjoy high levels in
all three RM mechanisms, leading to focalize efforts on the variable(s)
the firm can most efficiently leverage. On average, both CVA and TMC
are recommended as primary mechanisms, because they do not have a
negative impact on other goals during times of recovery (see Fig. 3).
8.3. Limitations and further research
Our study’s limitations suggest opportunities for future research.
First, our data portray RM mechanisms that have not been examined
together. However, our longitudinal, comparative approach (i.e., T2 vs
T1) considers a period of consistent deteriorating of an economy
measured at the worst moment of the contraction stage (2017) and the
first period of economic expansion (2018). This pattern may introduce
uniqueness into the firms’ behaviors and how they manage buyer–seller
relationships. Hence, future studies could examine a longer period of
time or a different pattern in the BC (e.g., a long period of expansion and
the subsequent first period characterized as economic crisis).
Second, we collected RM mechanisms data from key individual
managers who are qualified due to their direct participation in admin­
istering long-term buyer–seller relationships (for at least four years).
Nevertheless, relying on single informants raises common method con­
cerns. Beyond the several actions deployed to prevent inferential biases,
future studies could gather data from multiple functions, accounting for
the whole selling team. This would create the chance to triangulate
different perspectives to relationship management and performance
during a BC. Also, future research might gather data from buyers to
redefine the unit of analysis at the dyadic level and, consequently, in­
crease the reliability.
Third, we focused on a process approach to RM (e.g., Grönroos, 2004)
and tested the environmental effect (i.e., economic fluctuation in a BC)
on the whole model. A process approach facilitates providing rich
managerial understanding, which is consistent with prior research
calling for BC marketing studies being more practice-oriented (e.g.,
Dekimpe & Deleersnyder, 2018). However, the three RM mechanisms
building the path to supplier’s enhanced performance can be moderated
by other dyadic, supplier, or customer level variables. While we control
for endogeneity (e.g., due to missing variables) using MIIV-2SLS esti­
mation and our results are consistent across models, other influential
R. Mora Cortez et al.
variables (if data on them are available) could be added to the model as
moderators of the COM → INV, COM → CVA, and INV → CVA paths. In
addition, contextual variables (e.g., market turbulence, competitive in­
tensity) might be used as moderators of the INV → PERFORMANCE and
CVA → PERFORMANCE paths3.
Fourth, the nascent theory we developed from our results is confined
to a particular phenomenon (the fall of commodities) and place (large
size, market leader Chilean-based firms). While prior marketing
research on BC calls for more studies outside the U.S. setting (e.g.,
Dekimpe & Deleersnyder, 2018), additional efforts should be conducted
to generate a comprehensive set of relationship strategies to manage
different types of crisis and their recovery. For example, the current
coronavirus situation, due to social distancing, can influence differently
the configuration of the RM mechanisms to enhance supplier’s perfor­
mance. In addition, other settings commonly neglected in marketing
research, such as Southeastern Asia, Africa, and Central America, can
adequately serve to elaborate a cross-national research design that al­
lows for comparisons across different institutional systems and popula­
tion sizes. Moreover, all the suppliers in this study survived the crisis
period. Hence, further research can replicate our study with a sample of
small size firms, which have been identified to be more susceptible to a
BC (Peric & Vitezic, 2016).
Fifth, RM holds an inter-organizational process perspective building
on engagement of both suppliers and customers. A key characteristic of
relationship marketing approaches is to reside on explicit and direct
customer involvement. In communication and technical operations,
relationship marketing processes involve sharing or even delegating
control to the customer level. For that reason, the current study priori­
tized on measuring critical elements of communication on the customer-
level, in particular the communication openness and the technical
interaction from customers. In that regard, one of the key managerial
implications is to prioritize the most promising relationships, one of the
most fundamental and recurrent findings in customer relationship
research (Kumar & Reinartz, 2016). One implicit implication of this
study is to consider the knowledge and learning potential in the valua­
tion and respective prioritization of customer relationships. Still, com­
panies have discretion on how they engage with their customer base.
This echoes a growing body of research that shows the critical role of
understanding the customer value creation context or “value-in-use” as
the true-north for the performance of customer relationships (Ballantyne
& Varey, 2006; Grönroos & Voima, 2013; Macdonald, Kleinaltenkamp,
& Wilson, 2016). Ultimately, it is those insights beyond the market-
signals that offer clues for the adaption of value creation and path­
ways out of economic downturns. We hope our study proves useful for
managers and nudges academics to continue RM-based research in the
BC domain.
CRediT authorship contribution statement
Roberto Mora Cortez: Writing – review & editing, Writing – original
draft, Visualization, Validation, Software, Resources, Project adminis­
tration, Methodology, Investigation, Formal analysis, Data curation,
Conceptualization. Wesley J. Johnston: Writing – review & editing,
Validation, Supervision, Resources, Methodology, Conceptualization.
Michael Ehret: Writing – review & editing, Visualization, Validation,
Supervision, Conceptualization.
Declaration of Competing Interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
the work reported in this paper.
3
We thank an anonymous reviewer for this comment.
12
Journal of Business Research 165 (2023) 114063
Appendix. Scale items for construct measures
Buyer-seller communication openness (supported by Duncan &
Moriarty, 1998).
This customer is accessible to talk about the business (COM1).
This customer is willing to discuss any situation (COM2).
This customer maintains an open communication channel with us
(COM3).
The dialogue is central to this customer (COM4, *).
Buyer-seller technical involvement (supported by Grant, 1996).
This customer is willing to share commercial information (e.g., the
price of our competitors) with us (INV1, *).
This customer is willing to share technical information (e.g., results
of operation) with us (INV2).
This customer is willing to share new ideas (INV3).
With this customer, we sustain an interaction through an inter-
functional or multidisciplinary team (INV4).
This customer involves us in its operations (INV5, *).
This customer is willing to support us in the development of new
products/services (INV6, *).
Customer value anticipation (supported by Zhang et al., 2016).
We have the ability to predict the concerns of this customer (CVA1,
*).
We have the ability to predict the needs of this customer (CVA2).
We have the ability to predict the desires of this customer (CVA3).
Buyer-seller top management compatibility (adapted from Ellram &
Krause, 2014).
Evergreen – very compatible, with each party’s top management
aware of the other. Buyer’s top management values supplier.
Structural alliance – similar, both feel they are the more important
player in the industry and deserve a larger share of the profit, yet
they understand their co-dependence.
Contingent – Not necessarily a meeting of the minds at the top man­
agement levels. Buyer’s top management may be unaware of and
uninterested in the supplier relationship.
Dependent variables (influenced by Katsikeas et al., 2016; Palmatier
et al., 2006).
We experience a lower cost of serving this client (per standard unit of
offering) in comparison with the rest of our customer’s portfolio in
this segment (ER1).
This customer pays more (price per unit) in comparison with the rest
of our customer’s portfolio in this segment (ER2).
Once the market recovers, the likelihood that this customer con­
tinues a business relationship with us is very high (ER3 in T1).
Once the market enters in recession again, the likelihood that this
customer continues a business relationship with us is very high (ER3
in T2).
Number of years of the current business relationship (ER3′ ).
Control variables (from Jaworski and Kohli, 1993; assessed on a
scale running from 1 to 7).
Market turbulence
In our kind of business, customers’ product preferences change quite
a bit over time.
Our customers tend to look for new product all the time.
R. Mora Cortez et al.
We are witnessing demand for our products and services from cus­
tomers who never bought them before (*).
New customers tend to have product-related needs that are different
from those of our existing customers.
Competitive intensity
Competition in our industry is cutthroat.
There are many “promotion wars” in our industry.
Anything that one competitor can offer, others can match readily.
Price competition is a hallmark of our industry.
(*) items were removed after the purifying process.
(’) item was used to replicate the testing for the subjective measure
ER3. The results were convergent in the crisis setting.
Web Appendix. Supplementary data
Supplementary data to this article can be found online at https://doi.
org/10.1016/j.jbusres.2023.114063.
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Roberto Mora Cortez (Ph.D. Georgia State University), former research director of the
Center for Business and Industrial Marketing, Georgia State University. His research fo­
cuses on B2B relationships management, business intelligence, marketing insights, digi­
talization, and sales force performance. He has published in Industrial Marketing
Management, International Business Review, Journal of Business and Industrial Market­
ing, and other outlets.
Wesley J. Johnston (Ph.D. University of Pittsburgh) is the director of the Center for
Business and Industrial Marketing in the Robinson College of Business at Georgia State
University. He is also the CBIM RoundTable Professor of Marketing and teaches courses in
sales management, business-to-business marketing and customer relationship manage­
ment. He has published in Journal of Marketing, Journal of Consumer Research, Journal of
the Academy of Marketing Science, among others.
Michael Ehret (Ph.D. Freie Universität Berlin) is researcher on marketing organizations in
service economies. He is particularly interested in how companies share uncertainty with
the use of technologies and institutions, in areas such as industrial services, or markets for
technology. He teaches marketing and entrepreneurship. He has published in leading
academic journals, such as Journal of Marketing, Journal of Business and Industrial
Marketing, Journal of Business Research, Psychology and Marketing, and others.
 Food Policy 118 (2023) 102499

Contents lists available at ScienceDirect

Food Policy
journal homepage: www.elsevier.com/locate/foodpol

Cooperative membership effects on farmers’ choice of milk marketing

channels in Rwanda
Naphtal Habiyaremye a, b, *, Nadhem Mtimet c, Emily Awuor Ouma d, Gideon Aiko Obare b
a
Policies, Institutions, and Livelihoods (PIL), International Livestock Research Institute (ILRI), Nairobi, Kenya
b
Department of Agricultural Economics and Agribusiness Management, Egerton University, Nakuru, Kenya
c
Strategy and Knowledge Department, International Fund for Agricultural Development (IFAD), Cairo, Egypt
d
Policies, Institutions, and Livelihoods (PIL), International Livestock Research Institute (ILRI), Kampala, Uganda

A R T I C L E I N F O A B S T R A C T

Keywords: Although cooperatives play a critical role in reducing transaction costs and enhancing farmers’ adoption of better
Cooperative membership farming practices, little is known on the effects of dairy cooperative membership on the choice of milk marketing
Marketing channel channels. This paper employs an endogenous switching probit model to estimate the determinants of farmers’
Endogenous switching probit model
choice of milk marketing channels while controlling for the potential selection bias of cooperative membership.
Milk
Rwanda
We find that cooperative membership has positive and significant effects on the choice of both MCCs and milk
traders as marketing channels along with a negative effect on the choice of other buyers (direct consumers and
restaurants). The varying effect of cooperative membership on choice of different marketing channels holds also
for non-members had they been cooperative members. Furthermore, we find that the selling price positively
affects farmers’ choice of MCCs, but the longer distance to MCCs may make farmers (including cooperative
members) to choose milk traders who offer lower prices than MCCs. Since the MCCs are managed by dairy
cooperatives and they are the only marketing channels that conduct basic milk quality tests while offering higher
prices to farmers, we recommend policies that support easy access to MCCs and enhance dairy cooperatives’
governance. This will facilitate dairy farmers’ access to a better marketing channel while meeting an already
growing consumer demand for products safety and quality in the food industry.

1. Introduction
Over the past decade, milk production and its contribution to food
security, nutrition, and farmers’ welfare have been recognised world­
wide. The dairy sector constitutes around 30% of livestock production
(FAO, 2016) and is a source of livelihood for over 150 million house­
holds engaged in milk production worldwide (FAO, 2018). Furthermore,
developing countries contribution to global dairy production has
increased despite the slow African growth as compared to other devel­
oping countries (FAO, 2018). The Rwandan dairy sector has grown
tremendously as milk production has more than doubled between 2010
and 2018 (MINAGRI, 2019). This growth is a result of increased cow
population, a shift from local to improved cow breeds, and the adoption
of better management and farming practices (Habiyaremye et al., 2021).
While increasing farmers’ production and marketing capacities have
been at the centre of dairy sector development in Rwanda, the dairy
sector is still behind those of other regional countries such as Kenya and
Uganda, in areas of milk productivity, supply, and consumption (Hab­
iyaremye et al., 2021).
Most smallholder farmers, including milk producers, face different
challenges that hinder them from getting the opportunities offered by
various markets. For instance, high transaction costs may exclude some
farmers from selling to certain marketing channels, which otherwise
would generate more income (Barrett, 2010; Hao et al., 2018). Producer
organizations or cooperatives serve to reduce transaction costs through
collective action that enhances production and eases input and output
marketing (Francesconi & Heerink, 2011; Mutonyi, 2019). Furthermore,
some cooperatives offer extension and financial services that improve
members’ skills and ability to adopt better farming technologies that
eventually increase farmers’ production and incomes (Bizikova et al.,
2020; Verhofstadt & Maertens, 2014). Based on this, the government of
Rwanda in partnership with different donors has supported the

* Corresponding author.
E-mail addresses: habiyaremyen@gmail.com, hnaphtal@icpac.net (N. Habiyaremye), n.mtimet@ifad.org (N. Mtimet), e.ouma@cgiar.org (E.A. Ouma), obarega@
egerton.ac.ke (G.A. Obare).

https://doi.org/10.1016/j.foodpol.2023.102499
Received 4 August 2022; Received in revised form 7 June 2023; Accepted 12 June 2023
Available online 22 June 2023
0306-9192/© 2023 The Author(s). Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-
nc-nd/4.0/).
N. Habiyaremye et al.
initiation and formation of cooperatives among smallholder farmers
across the country (Mujawamariya et al., 2013; Verhofstadt & Maertens,
2014).
What is unclear is whether the use of cooperatives as an institutional
change is the right solution to boost the agricultural sector, especially in
improving farmers’ commercialization and choice of marketing chan­
nels in developing countries. While there are cases in which co­
operatives failed to generate benefits for farmers (for example, Bernard
& Taffesse, 2012; Mujawamariya et al., 2013; Schmitt, 2021), the
literature records many successes of cooperatives in farmers’ profit
generation, market participation, in agricultural technology adoption,
andaccess to production inputs (Abebaw & Haile, 2013; Blekking et al.,
2021; Manda et al., 2020; Mojo et al., 2017; Sultana et al., 2020; Tran
et al., 2023). Whereas the positive and negative impacts of cooperatives
continue to make cooperative membership an interesting topic in the
literature, there is scanty literature on cooperative membership and
choice of marketing channel.
Previous studies especially in developing countries, have mainly
focused on factors influencing farmers to join cooperatives and the effect
of cooperatives on production, adoption of new farming techniques,
access to inputs, and market participation (Blekking et al., 2021;
Chagwiza et al., 2016; Fischer & Qaim, 2012). For studies conducted in
Rwanda, the emphasis has been mainly on the impact of cooperatives on
farm performance (Verhofstadt & Maertens, 2014), income and poverty
(Verhofstadt & Maertens, 2015), and the effect of transaction costs on
double side-selling of farmers (Mujawamariya et al., 2013). In the study
of Mujawamariya et al. (2013), they evaluated the double side-selling1
behaviours of coffee farmers where some coffee cooperative members
sell their coffee to traders while some non-cooperative members sell to
cooperatives. Their findings confirmed that cooperative membership is a
key determinant of coffee farmers’ decision to sell to either cooperatives
or traders, however, the transaction costs highly influenced the decision
to side-sell. Their findings form the basis of our study as we seek to es­
timate the effect of cooperative membership on the choice of milk
marketing channel in the presence of a government policy such as the
Ministerial Order (M.O).
The “Ministerial Order N◦ 001/11.30 of 10/02/2016, (henceforth M.
O.), regulating the collection, transportation, and selling of milk” was
issued in Rwanda. This M.O. came in to support the Dairy Best Practices
(DBPs) scheme which stipulates a set of practices and standards for the
proper handling of raw milk aiming at the production of quality milk
(Land O’Lakes, 2017). The DBPs at the farm level include proper feeding
of cows, animal disease controls and veterinary consultations, cleanli­
ness, and carrying milk in stainless aluminum milk cans while the M.O
requires farmers to sell all milk through the milk collection centres
(MCCs) which conduct the basic milk quality tests and chill the milk
before selling it to various buyers along the dairy value chain (GoR,
2016).
Whereas the M.O. policy was to make the MCCs the most used milk
marketing channel for producers, other milk marketing channels are still
dominant in the Rwandan dairy sector (Shema et al., 2018). This
channel is characterized by sales of raw milk in an unorganized way,
possibly of low-quality or contaminated due to minimal compliance to
good dairy milk handling practices including hygiene, appropriate
cleanness, and basic infrastructure (Nyokabi et al., 2021; Rakha et al.,
2022; Zavala Nacul and Revoredo-Giha, 2022). These findings seem to
suggest that cooperatives, through their MCCs marketing channel, can
play a positive and significant role in promoting food safety and nutri­
tion by ensuring that basic safety and quality tests are conducted (Land
O’Lakes, 2017). Furthermore, cooperatives facilitate trainings that
1
Double side-selling is a situation where cooperative members who are ex­
pected to sell products to their cooperatives choose to sell to alternative mar­
keting channels while non-cooperative members sell their products to
cooperatives instead of the alternative marketing channels.
2
Food Policy 118 (2023) 102499
increase participants’ information and skills in milk-handling practices,
which leads to the production and supply of high-quality milk. (Nyokabi
et al., 2021). Despite the M.O., one would expect that at least members
of dairy cooperatives sell all their milk through the MCCs which are
owned and managed by the cooperatives. However, this is not the case
as some cooperative members may prefer not to sell all milk through the
MCCs while non-members may as well sell to either the MCCs or alter­
native marketing channels. Thus, this paper establishes the factors
behind farmers’ choice of milk marketing channels given their cooper­
ative membership status.
Dairy farmers’ choice of a marketing channel may be influenced by
several contextual factors. Scholars have proposed different factors that
may determine the farmers’ choice of milk marketing channel, and these
factors vary depending on the country or region and the set-up of these
markets (Berem et al., 2015; Moturi et al., 2015; Ravneet et al., 2018).
For example, the selling price of the product and transaction costs play a
key role in the farmers’ choice of marketing channel. Milk producers are
sensitive to prices and the stability of those prices; hence, they are more
likely to sell their milk in marketing channels that offer them higher
and/or stable prices (Ravneet et al., 2018). Also, Ngigi et al. (2000)
found that dairy farmers in Kenya decide to sell in a particular market
outlet based on the prices offered and the structure of that outlet in terms
of payment reliability. In addition, Berem et al. (2015) used a multi­
nomial logit regression to analyse determinants of the choice of milk
marketing channels in Nakuru County, Kenya, and they found that the
selling price significantly influences the choice of marketing channels.
Similarly, Rao et al. (2019) confirm that milk producers in Tanzania
prefer dairy hubs with higher prices and a fortnightly payment provided
that the hubs give them bundled inputs on a check-off system. However,
these studies did not capture the effect of cooperative membership on
the choice of marketing channel.
Few studies have estimated the determinants of the choice of milk
marketing channels while considering the dairy cooperative member­
ship variable. For instance, Sikawa and Mugisha (2011) used a Heckman
probit model to determine the factors that influence dairy farmers in
South-Western Uganda to choose a marketing channel. They found that
the farmers’ choices were influenced by cooperative membership, age
and education level of the dairy farmer, and the volume of milk pro­
duced. Furthermore, Moturi et al. (2015) used a multinomial logit model
to estimate the determinants of the choice of milk marketing channel
and found that cooperative membership increases the likelihood of
selling milk to cooperative and private marketing channels. They also
found that education level and age of the household head have signifi­
cant effects on the choice of marketing channels. In addition, Jitmun and
Kuwornu (2019) employed a probit model and found that the number of
years of membership in the MCC has a positive effect on the probability
of selling milk to dairy cooperatives. The limitation of these three studies
is that they did not control for selection bias of cooperative membership
yet ignoring the selectivity effect is likely to lead to biased and incon­
sistent estimates (Lokshin & Sajaia, 2011).
The study of Hao et al. (2018) lays a good starting point for analysing
the effect of farmers’ membership in cooperatives membership on
marketing channel choice(s). They used an endogenous switching probit
model, which controls for the potential selection bias of cooperative
membership. They established that cooperative membership is a key
factor influencing apple farmers’ choice of marketing channels in China.
They confirmed that the collective action of cooperatives gives its
members some benefits such as marketing information and increased
price bargaining power. The limitation of this study is that the authors
did not estimate the effect of cooperative membership on the counter­
factual (non-members of cooperatives) had they been members. Hence,
our study comes in to fill this gap. In addition, most previous studies on
the effect of cooperative membership focused on non-perishable and
high-value crops, which tend always to portray a positive effect (Alene
et al., 2008; Bernard & Spielman, 2009). This paper contributes to milk
marketing literature which is an under-researched area in the dairy
N. Habiyaremye et al.
sector. It also adds to the scanty literature on the effect of cooperative
membership on the choice of marketing channels for low-value and
highly perishable products. To the best of our knowledge, this study is
the first to estimate the effect of cooperative membership on the choice
of milk marketing channels while controlling for selection bias of
membership.
2. Methodology
2.1. Model specification
Our model is based on the assumption that farm households are
rational in decision-making. Farmers will only be incentivised to join
cooperatives if their perceived benefits of membership are more than
that of non-membership. Following a random utility model (RUM), a
milk producer i chooses to be a cooperative member if the utility derived
from membership (U1 ) is greater than that of not being a member (U0 ).
Since the net benefit or utility from membership (C*i = U*1 − U0 ) is un­
observable; it is functionally represented by a latent variable as:
Ci* = βXi + εi (1)
where (Xi ) is a vector of observed explanatory variables, β is a vector of
parameter estimates, and (εi ) is the stochastic error term. If a milk
producer’s decision is known, the observable pattern of cooperative
membership can be presented by a dummy outcome equation for each
choice (Ci ) whereby the observed values of Ci are related to C*i as:
{ linear probability model (LPM) and two-stage least squares (2SLS)
1 if Ci* > 0
Ci = (2)
0 otherwise
The resulting probability of a household being a member of a
cooperative is:
( )
Pr(Ci = 1) = Pr Ci* > 0 = Pr(Ci > − βXi ) = 1 − F(− βXi ) (3)
where F is the cumulative distribution function for the error term εi .
2.2. Estimation strategy
Our interest is to estimate the effect of cooperative membership on
the choice of milk marketing channel. We group milk marketing chan­
nels in Rwanda into three major categories namely, milk traders, MCCs,
and other buyers. Milk traders are mobile traders mostly riding bicycles
who move from farm to farm collecting milk. They directly buy milk
from farmers and resell it to different clients with a mark-up. The MCCs
are linked to farmer cooperatives in that they are owned and/or oper­
ated by dairy cooperatives, making the MCCs and dairy cooperatives one
similar marketing channel (for the rest of this paper, the cooperative
milk marketing channel is represented by the MCC channel). The MCCs
buy milk from farmers after conducting basic quality tests such as
alcohol, lactometer, and organoleptic test, chill it and distribute it to
large processors, milk bars/zones, raw milk sellers, cottage cheese
makers, and individual consumers. It is important to note that the MCCs
buy milk from every farmers irrespective of their membership in the
cooperative. In addition, being a cooperative member does not
unavoidably mean choosing the MCC as the marketing channel. How­
ever, cooperative members usually get various benefits including dis­
counted prices on inputs such as veterinary services, feed supplements,
and purchase of milk cans that are checked-off against milk supplied,
and shared annual bonuses from profits made by the cooperative (Heifer
International, 2018). The other buyers’ channel constitutes both res­
taurants and direct consumers who neighbour farmers and who usually
give advances to farmers to be supplied milk daily or on an as-need basis.
We assume that a milk producer chooses a marketing channel from a
set of three channels (milk traders, MCCs, and other buyers) after
assessing transaction costs and profits associated with each marketing
3
Food Policy 118 (2023) 102499
channel. When estimating the effect of dairy cooperative membership on
milk producers’ choice of marketing channels, we cannot disregard the
likelihood of membership being endogenous to farmers’ choice of
marketing channels as dairy cooperatives represented by MCCs are
among the main milk marketing channels. For instance, if farmers target
the benefits of being members of a cooperative, they can self-select
themselves into a cooperative that will affect their choice of market­
ing channel. Consequently, some factors may affect the outcome vari­
able (choice of marketing channel) but cannot be observed in real life.
Therefore, they form part of the error term that is correlated with the
main explanatory variable resulting in an endogeneity problem. This
underestimates or overestimates the effect of cooperative membership
on the choice of marketing channel.
Previous studies have used quasi-experimental methods such as
propensity score matching (PSM) to control the potential selection bias
of cooperative membership (see, for example, Abebaw & Haile, 2013;
Verhofstadt & Maertens, 2014, 2015). With this approach, a propensity
score is used to construct a control group by matching each treated
element with a non-treated element based on similar observable char­
acteristics. However, the PSM may produce biased estimates as the se­
lection into a cooperative is also caused by unobservable characteristics.
On the other hand, instrumental variables (IV) and proxy variables are
generally used to solve the endogeneity problem (Wooldridge, 2014).
However, Wooldridge (2010) argues that an IV procedure is not
appropriate to deal with endogeneity in limited dependent variable
models due to the nonlinearity of the model.
The alternative approaches that are used in binary outcomes are the
(Angrist, 2001), and the bivariate probit model (BPM) (Holm & Jæger,
2011). The LPM is criticized for producing constant marginal effects and
predicting outside (0,1) intervals. While 2SLS and BPM produce better
estimates, they are less efficient than a full information maximum
likelihood (FIML) approach (Hao et al., 2018). Therefore, we use an
endogenous switching probit (ESP) model, which uses the FIML as
framed by Miranda and Rabe-Hesketh (2006). The ESP model contem­
plates both the correlation and the dependence between the error terms
of the outcome variable and the selection equations through shared
random effect, an attribute that impersonates the selection problem
(Hao et al., 2018). The shared random effect property of the ESP model
is a remedy for the unobserved heterogeneity between the choice of
marketing channel and cooperative membership. Following Hao et al.
(2018) approach, the outcome variable can be framed as:
{
1 if Yij* > 0
Yij* = αZi + φCi* + ui , Yij = (J = Y1 , Y2 , Y3 ) (4)
0 otherwise
where Yij* is the outcome equation (the choice of marketing channel),
and J represents the three marketing channels (Y1 = milk traders, Y2 =
MCCs, Y3 = other buyers). Zi represents the vector of explanatory vari­
ables of choice of marketing channels while C*i is the dummy variable for
cooperative membership, α, and φ are coefficients to be estimated and ui
is the error term. The potential endogeneity of membership is modelled
using a shared random effect as discussed above to induce the depen­
dence between the error terms of equations (1) and (4) (Miranda and
Rabe-Hesketh, 2006),
ε i = θ μi + γ i (5)
ui = μi + ωi (6)
It is assumed that μi , γ i and ωi are independently and identically
distributed, with mean 0 and variance 1. θ represents the factor loading
which is used in deriving the correlation (ρ) between error terms (ui and
νi ) as follows: ρ = √̅̅̅̅̅̅̅̅̅̅̅̅̅
θ
. The correlation (ρ) is used to establish the
2(θ2 +1)
exogeneity or endogeneity of Ci in Yij . If ρ = 0, then the cooperative
membership is exogenous in the choice of marketing channel decision
N. Habiyaremye et al.
equation, and coefficients α and φ are estimated by fitting equation (4)
with the ordinary probit models. On the contrary, if ρ ∕ = 0, then C*i is
correlated with ui , an endogenous switching model is used to solve the
endogeneity problem.
While the ESP model divides farmers into different regimes that are
mutually exclusive, around 43 farmers (11.6%) in our sample are selling
to 2 marketing channels which complicate the error structure not only
between equations (1) and (4) but also the error terms within the
equation (4). Following Hao et al. (2018), wemade our outcome vari­
ables dummies for each of the marketing channels used by farmers.
Furthermore, we performed a multivariate probit regression (MVPM) to
verify whether this cross-correlation bias our analysis. The results of
MVPM (Appendix A) support the impact of cooperative membership on
the choice of milk marketing channels, but the model has few parame­
ters that are statistically significant compared to the ESP model while its
parameters are less efficient than a FIML approach. Despite this caveat,
we preferred an ESP model2 due to its strength to separately estimate the
effect of control variables on the choice of marketing channels based on
whether the farmer is a cooperative member or non-member.
The ESP model requires an exclusion restriction for better identifi­
cation. This approach involves the inclusion of at least one variable in
the selection equation with no direct effect on the outcome equation
based on the economic theory and/or empirical literature (Deb &
Trivedi, 2006; Hao et al., 2018; Tabe-Ojong et al., 2020). Previous
studies have used different variables as exclusion restrictions. For
instance, Di Falco et al. (2011) and Shiferaw et al. (2014) have used
government and farmer-to-farmer extension while Tesfaye & Tirivayi
(2018) have used the presence of an extension agent in the community
as exclusion restrictions. Furthermore, Khonje et al. (2015) used group
membership as an exclusion restriction while Hao et al. (2018) used the
frequency of participating in training and whether any family member
has experience as village cadre.
In this study, we use the number of trainings attended on dairy farm
management in 2019 and whether any household member is in local
administration as exclusion restrictions. Participating in dairy farm
management trainings increases farmers’ possibility of specializing in
dairy production, and hence joining dairy cooperatives while the
trainings have no direct effect on the choice of a marketing channel.
Given the efforts that the government of Rwanda has put into the for­
mation of agricultural cooperatives (Verhofstadt & Maertens, 2014), it is
apparent that having a household member in a local government
administration increases the likelihood of that household joining a
cooperative. We performed a simple falsification test following Di Falco
et al. (2011) to establish the admissibility of these two instruments
(Appendix C). We find that our instruments can be considered valid
since they statistically influence the decision to join a dairy cooperative
or not, but they do not influence the choice of a marketing channel for
non-members. A further correlation analysis performed confirms that
the correlations between the outcome variables and the instruments are
weak (below 0.2 in absolute value and close to 0 in most cases).
2.3. Treatment effects
The ESP model allows for estimating the average treatment effects on
the treated (ATT) and the average treatment effects on the untreated
(ATU). The ATT is the expected treatment effect on milk producers with
observed characteristics (x) who are members of dairy cooperatives. The
ATU is the expected effect of the treatment on milk producers with
observed characteristics (x) who are not members of dairy cooperatives.
We also estimate the average treatment effect (ATE) of cooperative
membership for a milk producer with observed characteristics (x)
randomly selected from the population of milk producers. Since the
2
We performed the analysis in Stata 16 using the “switch_probit” command.
4
Food Policy 118 (2023) 102499
treatment effect can be changed by observed and/or unobserved
household characteristics (x), the marginal treatment effect (MTE) is
also estimated to account for unobserved heterogeneity (εi ). These ef­
fects are estimated following Lokshin and Sajaia (2011), thus:
ATT = E(Y1i |Ci = 1, X = x) − E(Y0i |Ci = 1, X = x) (7)
ATU = E(Y1i |Ci = 0, X = x) − E(Y0i |Ci = 0, X = x) (8)
ATE = E(Ci = 1, X = x) − E(Ci = 0, X = x) (9)
MTE = E(Ci = 1|X = x,εi = εi ) − E(Ci = 0|X = x,εi = εi ) (10)
2.4. Study area and data collection
We conducted a household survey between January and March 2020
in Nyabihu and Ruhango districts of Rwanda, two of the country’s main
milk-producing districts (Fig. 1). Nyabihu district is among seven dis­
tricts in the Western province of Rwanda, with a population of 294,740
people from 65,855 households (NISR, 2014). On the other hand,
Ruhango district is one of the eight districts of the Southern province of
Rwanda, with 319,885 population and 76,968 households (NISR, 2014).
In both districts, there are seven MCCs managed by several dairy co­
operatives, five small and medium enterprises (SMEs) making cheese,
and one dairy factory (Mukamira) in Nyabihu; all these make the dairy
sector active in these districts.
3. Variables and descriptive statistics
3.1. Selection and outcome variables
Our selection variable (the dairy cooperative membership) is a
dummy variable constructed based on the questions: “Have you or has
any other member of your household been a member of a dairy coop­
erative?” and “Are you or is your other household member currently still
a dairy cooperative member?”. We found zero dropping in cooperative
membership where all 99 households representing 27% of our sample
which had membership into dairy cooperatives were still active during
the survey period in 2019. On the other hand, the outcome variable
(choice of marketing channel) was constructed based on the questions:
“Did you sell milk in the year 2019?” and “What is your main marketing
channel did you sell to?”. In this paper, the marketing channel choice
measures participation on the extensive margin without considering the
quantity of milk sold to different channels.
We find that the main marketing channels for milk producers in
Rwanda are milk traders, MCCs, direct consumers, and restaurants
(Table 1). However, due to a small share of direct consumers (15.5%)
and restaurants (14.3%), we combine these two marketing channels to
form one marketing channel named “other buyers” channel as explained
in Section 2.2 above. Hence, we grouped the outcome variable into 3
dummy variables namely, milk traders equals 1 if farmers sell to milk
traders and 0 otherwise, MCCs equals 1 if they sell to MCCs and
0 otherwise, and other buyers that equal 1 if they sell directly to con­
sumers or restaurant and 0 otherwise.
Milk traders and MCCs have almost equal shares of marketing
channels (35.6% and 34.6% respectively) while other buyers have a
share of 29.8%. More non-member farmers sell to milk traders and other
buyers than they sell to MCCs while cooperative member farmers sell
their milk to MCCs more than any other marketing channel. This is
probably because MCCs are managed by cooperatives and hence they
may prefer to sell to this channel as a way of promoting their co­
operatives which have value propositions for its members. On the other
hand, non-members may not feel the need to transport their milk to
MCCs while there are milk traders who can collect it at the farm or other
buyers who are close to them.
N. Habiyaremye et al. Food Policy 118 (2023) 102499

Fig. 1. Map of the study area. We used a two-stage random sampling procedure where the first stage is the selection of Nyabihu and Ruhango districts due to the pre-
determined sites of the project (This is one of the Feed the Future Livestock Systems Innovations Lab projects on “Enhancing milk quality and consumption for
improved income and nutrition in Rwanda“ which was led by the International Livestock Research Institute (ILRI)). The second stage is the random selection of milk
producers from a sampling frame of farmers who supply milk to MCCs and milk traders and a random selection of the rest of the milk producers in consultation with
local extension agents. A structured questionnaire was used to collect information from 370 farmers who were producing and selling milk in both districts during the
survey period. In addition, we collected information on farmer and farm characteristics, dairy cooperative membership, milk production, and marketing, which
enabled us to establish the determinants of the choice of milk marketing channels in Rwanda.

Adherence to DBP standards is expected to positively influence the

Table 1
choice of an MCC marketing channel since it is the only marketing
Milk marketing channels by cooperative membership.
channel that tests milk and pays higher prices to farmers. Verhofstadt
Marketing channels Non-members Members Total and Maertens (2014) found a positive relationship between the quantity
Milk traders 129 (42.6%) 18 (16.4%) 147 (35.6%) of produce sold and cooperative membership. In this study, we use the
MCCs 71 (23.4%) 72 (65.4%) 143 (34.6%) commercialization index which is the ratio of the total quantity of milk
Direct consumers 50 (16.5%) 14 (12.7%) 64 (15.5%)
sold to the total milk produced, and expect it to positively influence the
Restaurants 53 (17.5 %) 6 (5.5%) 59 (14.3%)
Total 303 (100%) 110 (100%) 413 (100%) cooperatives’ membership. Distance to the nearest milk sales point has
been found to have a non-linear positive influence on cooperative
membership (Abebaw & Haile, 2013; Fischer & Qaim, 2012). Therefore,
3.2. Explanatory variables and expected effects we include this variable and expect it to either positively or negatively
influence the cooperative membership. Furthermore, this variable is
Table 2 below presents the explanatory variables used to model the expected to have a positive effect on the choice of both milk traders and
farmer’s decision to join a dairy cooperative and the choice of marketing other buyers and a negative effect on the choice of MCC as a marketing
channel. The choice of these variables is based on previous empirical channel probably because MCCs are usually located far from farmers.
literature on cooperative membership and/or choice of marketing Concerning household head’s characteristics, previous studies have
channels (Abebaw & Haile, 2013; Bernard & Spielman, 2009; Brar et al., found that sex, age (Abebaw & Haile, 2013; Bernard & Spielman, 2009),
2018; Chagwiza et al., 2016; Hao et al., 2018; Jitmun & Kuwornu, 2019; education level, and farming experience of the household head (Tabe-
Tabe-Ojong et al., 2020; Verhofstadt & Maertens, 2015). We hypothesise Ojong et al., 2020; Verhofstadt & Maertens, 2015) are positively asso­
that membership in dairy cooperatives has a positive effect on the choice ciated with cooperative participation. Thus, we expect similar effects of
of MCCs as marketing channels and unclear effects on the choice of milk these variables on the probability of farmers joining cooperatives in this
traders and other buyers. This is because MCCs are managed by dairy study, but with an unclear effect on the choice of marketing channel.
cooperatives and farmers may self-select themselves into cooperatives Likewise, we expect a cooperative membership to be positively related
while targeting to sell to MCCs. to off-farm income as found by (Abebaw & Haile, 2013; Fischer & Qaim,

5
N. Habiyaremye et al.
Table 2
Variables and expected effects (N = 370).
Variable Description
Adherence to DBP Dummy (=1 if the household adheres to DBP,
standards 0 otherwise)
Commercialization index Proportion of milk sold to milk produced
Distance Distance from farm to nearest milk selling point in Km
Experience Dairy farming experience years
Sex Sex of the household head (=1 if male, 0 otherwise)
Age Age of the household head in years
Education level Number of years of formal education of the household
head
Off-farm income Dummy (=1 if the household has an off-farming income,
0 otherwise)
Crossbreed lactating Dummy (=1 if the household has a crossbreed lactating
cows cow)
Pure breed lactating cows Dummy (=1 if the household has a pure breed lactating
cow)
Membership fee The amount of money paid to become a cooperative
member in Rwf
Local administration Dummy (=1 if any household member is in local
administration, 0 otherwise)
Training The number of trainings attended on dairy farm
management in 2019
Selling price Price of milk in Rwf per litre
Selling season Dummy (=1 if milk is sold in rainy season, 0 in dry
season)
Location Dummy (=1 if the household resides in Nyabihu district,
0 otherwise)
Note: − is for negative impact; + is for positive impact; +/− stands for unclear direction; 0 stands for no impact.
2012). In their study on cooperative membership and dairy performance
among smallholders in Ethiopia, Chagwiza et al. (2016) found a sig­
nificant positive relationship between the proportion of crossbreed cows
and cooperative membership. In this study, we include two dummies for
keeping crossbreeds and pure breed lactating cows and expect them to
positively influence the cooperative membership as farmers who keep
these breeds can be regarded as commercial-oriented farmers compared
to those keeping local breeds.
The cooperative membership fee is an amount of money set by the
cooperative management to be paid by every farmer who wishes to be a
member of the cooperative. The membership fee may vary between
different cooperatives, but there is no variation in the services provided
across the MCC by the membership fee. The membership fee paid by
farmers is expected to have a negative effect on joining a cooperative as
a high membership fee can be an entry barrier (Mujawamariya et al.,
2013; Verhofstadt & Maertens, 2014). On the other hand, membership
fee has no clear effect on the choice of milk traders and other buyers as
marketing channels, but it is expected to have a positive effect on the
choice of MCCs since farmers may consider the paid fee as a sunk cost
and hence, get attached to the MCCs channel.
Regarding the selling price, we base our expectation on the findings
of Brar et al. (2018) and Jitmun and Kuwornu (2019) who found that
farmers sell their milk in a marketing channel that offers them higher
prices in India and Thailand respectively. Given that MCCs offer better
prices than other marketing channels, we expect the price of milk
received by farmers to have a positive effect on the choice of MCCs and
conversely on the choice of both milk traders and other buyers. The
selling season is expected to negatively affect the choice of the MCCs as
marketing channels because farmers produce more milk in the rainy
season (due to the availability of feeds) which farmers might find
challenging to transport to MCCs that are far from them. Farmers
residing in Nyabihu district are expected to join cooperatives more than
those in Ruhango because Nyabihu has many active dairy cooperatives.
Food Policy 118 (2023) 102499
Selection equation: expected effect on Outcome equation: expected effect
cooperative membership on choice of marketing channel
Milk MCCs Other
traders buyers
0 − /+ + − /+
+ − /+ − /+ −
− /+ + − +
+ − /+ − /+ − /+
+ − /+ − /+ − /+
+ − /+ − /+ − /+
+ − /+ − /+ − /+
+ − /+ − /+ − /+
+ − /+ − /+ − /+
+ − /+ − /+ − /+
− − /+ + − /+
+ 0 0 0
+ 0 0 0
0 − + −
0 + − − /+
+ − /+ + − /+
3.3. Descriptive statistics
Table 3 presents summary statistics and a description of the variables
used in the model and mean differences between member and non-
member farmers. On average, 86% of households are headed by males
with a mean age of 52 years, 12 years of dairy farming experience, and
an education level of 5 years, which is close to completing primary ed­
ucation. Around 54% of farmers in our sample reside in the Nyabihu
district, and about 53% adhere to DBP standards while selling milk to
buyers located 1.3 km from the farm. The commercialization index is
0.61 indicating that 61% of milk produced is sold and nearly 46% of
households are engaged in off-farm activities.
In Table 3, we also present the results of a mean difference test that
we conducted to differentiate between cooperative members and non-
members. Out of 370 farmers, 99 farmers are dairy cooperative mem­
bers with a mean membership fee of 32,167 Rwf. Non-cooperative
members are younger and more educated than cooperative members
(p < 0.01). On the other hand, dairy cooperative members are more
experienced in dairy farming, adhere to DBP standards, and they attend
more dairy farm management trainings than non-members (p < 0.01).
This was expected because cooperatives may provide their members
with information on available trainings and make the necessary ar­
rangements for their members to attend such trainings (Habiyaremye
et al. 2021). In addition, 33% of cooperative members are into local
government administration compared to 20% of non-members, they
have a higher commercialization index, and more pure breed cows (p <
0.01) implying that they are more commercial oriented than non-
members.
Furthermore, cooperative members sell milk at a higher price than
non-members (p < 0.01). This can be attributed to the fact thatthe
members mostly sell to MCCs, which offer them higher prices because
standard quality tests are conducted before accepting the milk. On the
other hand, long distance from cooperative members’ farms to their
nearest selling points would explain why they join a cooperative, unlike
non-members who may not be incentivized to join as they have
6
N. Habiyaremye et al. Food Policy 118 (2023) 102499

Table 3 alternative selling points that are nearer to the farm-gate.. Expectedly,
Descriptive statistics of variables used in the estimation models by cooperative the location dummy variable shows that more cooperative members
membership. reside in Nyabihu district which has more dairy cooperatives than
Variables and Full Non- Members Difference Ruhango district. Based on the mean differences between cooperative
description sample (N members (N ¼ 99) members and non-members, one can see the effect of cooperative
¼ 370) (N ¼ 271) membership on the choice of a marketing channel. However, we cannot
Mean Mean Mean
draw that inference based on these results as other observable and un­
Commercialization 0.611 0.598 0.647 − 0.049 ** observable confounding factors are not controlled for. Hence, we pre­
index (proportion (0.173) (0.174) (0.163)
sent the results of the models that control for these confounding in the
of milk sold to milk
produced) subsequent section.
Distance (distance 1.342 1.108 1.984 − 0.876 ***
from farm to (1.804) (1.724) (1.871) 4. Results and discussions
nearest milk selling
point in Km)
Experience (dairy 12.042 10.876 15.232 − 4.356 *** 4.1. Treatment effects results
farming experience (10.882) (10.395) (11.584)
in years) Table 4 presents the average treatment effects for actual and coun­
Sex of the household 0.865 0.863 0.869 − 0.005
terfactual situations. The results show that cooperative membership
head (=1 if male, (0.342) (0.344) (0.339)
0 otherwise) increases the probability of selling to milk traders by 3 percentage points
Age (age of the 51.965 50.089 57.101 − 7.012 *** for members of cooperatives compared to an increase of 20 percentage
household head in (14.135) (14.048) (13.124) points for non-members had they been members. Furthermore, the
years) cooperative membership increases the likelihood of selling to MCCs by
Education level of the 4.911 5.221 4.061 1.161 ***
18 percentage points. This implies that households who are members of
household head (3.708) (3.717) (3.565)
(number of years of dairy cooperatives are more likely to sell to MCCs than the counterfac­
formal education) tual scenario of non-members (12 percentage points). We further find
Off-farm income (=1 0.465 0.472 0.444 0.028 that cooperative membership decreases the likelihood of members
if the household (0.499) (0.500) (0.499)
selling their milk to other buyers by 5 percentage points. Contrary, in
has an off-farming
income,
counterfactual, the probability of non-members selling to other buyers
0 otherwise) would increase by 11 percentage points had they chosen to be members
Crossbreed lactating 0.843 0.838 0.859 − 0.021 of dairy cooperatives.
cows (=1 if the (0.364) (0.369) (0.350)
household has a
crossbreed
4.2. Selection model: Dairy cooperative membership
lactating cow)
Pure breed lactating 0.192 0.125 0.374 − 0.248 ***
cows (=1 if the (0.194) (0.122) (0.286) Each outcome model (each marketing channel) has one corre­
household has a sponding selection model. The second, fourth, and sixth columns of
pure breed Table 5 present the estimation results of three selection models i.e. de­
lactating cow)
Membership fee (the 8,606.757 0.00 32,166.67 − 32166.67
terminants of cooperative membership. All significant variables in each
amount of money (22,754.44) (0.00) (34,408.78) *** selection model have the same signs and have almost similar statistical
paid to become a significance except for being in local government administration and
cooperative owning a crossbreed cow variables that have different levels of signifi­
member in Rwf1)
cance and age variable which is only significant in the second selection
Local administration 0.235 0.199 0.333 − 0.134 ***
(=1 if any HH (0.425) (0.400) (0.473) model. Consistent with Abebaw and Haile (2013), and Fischer and Qaim
member is in local (2012), we find that the distance to the nearest selling point has a sig­
administration, nificant positive effect on cooperative membership. This is probably
0 otherwise) because farmers located far from selling points may likely join co­
Training (number of 1.449 1.148 2.272 − 1.125 ***
operatives expecting to gain some collective marketing while those that
trainings attended (1.673) (1.568) (1.683)
on dairy farm are close to selling points may not recognise the importance of co­
management in operatives as they already have better access to markets (Fischer &
2019) Qaim, 2012). The age variable has a significant positive relationship
Adherence to DBP 0.527 0.406 0.858 − 0.453 ***
with cooperative membership, suggesting that older household heads
(=1 if the (0.50) (0.492) (0.350)
household adheres
are more likely to join a dairy cooperative than younger ones. This is
to DBP, consistent with the findings of Tabe-Ojong et al. (2020), who argue that
0 otherwise)
Selling price (milk 156.882 151.611 171.313 − 19.702
Table 4
price in Rwf per (40.625) (43.159) (28.199) ***
litre)
Treatment effects.
Selling season (=1 if 0.538 0.513 0.606 − 0.093 Outcomes Treatment effects
milk is sold in rainy (0.499) (0.501) (0.491)
season, 0 in dry ATT ATU ATE MTE
season) Milk traders 0.032 *** 0.204 *** 0.238 *** − 0.690
Location (=1 or 0 if 0.538 0.472 0.717 − 0.241 *** (0.166) (0.289) (0.299) (0.465)
the household (0.489) (0.500) (0.453) MCCs 0.183 *** 0.122 *** 0.311 *** 0.940 ***
resides in Nyabihu (0.361) (0.325) (0.428) (0.239)
or Ruhango district Other buyers − 0.052 *** 0.115 *** 0.065 *** − 0.047 ***
respectively) (0.0.141) (0.270) (0.302) (0.092)
Note: Standard deviations are in parentheses and *** p < 0.01, ** p < 0.05, * p Note: ATT – Average Treatment Effect on the Treated, ATU – Average Treatment
< 0.1. Effect on the Untreated, ATE – Average Treatment Effect, and MTE – Marginal
1
1 USD = 920 Rwf when the data was collected in February 2020. Treatment Effect; clustered standard errors in parentheses; *** p < 0.01.

7
N. Habiyaremye et al. Food Policy 118 (2023) 102499

Table 5
Endogenous switch probit model results of three main milk marketing channels (N = 370).
Variables Milk traders MCCs Other buyers

Selection1 Members Selection2 Members Selection3 Members

Commercialization index − 0.427 (0.607) − 0.461 (1.367) − 0.565 (0.738) − 13.826 ** − 0.187 (0.727) − 0.437 (1.011)
(6.988)
Distance to nearest milk selling point in 0.146 *** (0.053) 0.238 ** (0.122) 0.175 *** (0.059) − 0.233 (0.220) 0.153 *** (0.055) 0.090 (0.095)
Km
Dairy farming experience in years − 0.002 (0.012) − 0.059 * (0.031) − 0.013 (0.012) − 0.057 (0.051) − 0.007 (0.013) 0.010 (0.019)
Sex of the household head 0.198 (0.373) − 2.111 ** (1.026) 0.252 (0.392) 0.144 (1.748) 0.450 (0.430) − 0.036 (0.571)
Age of the household head in years 0.010 (0.010) 0.095 * (0.051) 0.020 ** (0.009) − 0.112 ** (0.057) 0.018 (0.011) − 0.023 (0.018)
Education level of the household head − 0.017 (0.033) 0.067 (0.103) − 0.023 (0.037) − 0.168 (0.147) − 0.015 (0.038) − 0.184 ** (0.077)
Off-farm income − 0.323 (0.285) 1.279 (1.077) − 0.186 (0.302) − 0.215 (0.828) 0.374 (0.299) − 0.062 (0.407)
Crossbreed lactating cows 1.512 *** (0.561) 1.034 (1.292) 0.963 ** (0.507) 1.455 (2.906) 1.346 ** (0.626) − 0.140 (0.719)
Pure breed lactating cows 2.184 *** (0.533) − 0.039 (1.061) 1.889 *** (0.473) 2.048 (2.823) 2.002 *** (0.576) − 0.460 (0.622)
Membership fee2 0.288 *** (0.029) − 0.264 *** 0.302 *** (0.032) − 0.197 (0.133) 0.290 *** (0.031) 0.050 (0.113)
(0.080)
Local administration 0.919 *** (0.257) 0.784 ** (0.341) 0.971 *** (0.321)
Training 0.259 *** (0.074) 0.233 *** (0.068) 0.254 *** (0.075)
Adherence to DBP − 0.698 (0.679) 8.259 ** (4.038) − 2.287 ***
(0.752)
Selling price in Rwf per litre − − 0.063 ** (0.031) − 0.111 ** (0.052) − − 0.009 (0.006)
Selling season − − 0.509 (0.716) − − 1.019 (1.267) − 0.095 (0.414)
Location − 0.080 (0.261) − 3.967 ** (1.694) − 0.253 (0.274) 6.577 ** (2.889) − 0.190 (0.270) − 0.847 * (0.473)
Constant − 4.260 *** 13.514 ** (5.214) − 3.871 *** − 16.474 (10.297) − 4.655 *** 5.936 ** (2.327)
(0.952) (0.898) (1.068)
Wald χ2 − 119.88 *** − 106.71 *** − 107.86 ***
ρ1 − − 1.00 − − 0.99 − − 495
ρ2 − − 1.00 − − 1.00 − 0.405

Note: Standard errors clustered at the household level are in parentheses and *** p < 0.01, ** p < 0.05, * p < 0.1.
2
The membership fee variable is transformed using the inverse hyperbolic sine transformation as it approximates the natural logarithm and allows retaining zero-
valued observations (Bellemare & Wichman, 2020).

older farmers understand the importance of cooperatives well due to
their farming experience and connections in society.
While membership fee was expected to have a negative association3
on cooperative membership, we find a significant positive association.
This is possibly due to cooperatives’ value proposition to members
where cooperatives that charge higher membership fees may be offering
more benefits to their members that offset their membership fee. Some
of the benefits that farmers get include access to inputs at lower prices
and on a check-off system as well as sharing dividends at the end of the
year (Heifer International, 2018). Therefore, if there is no membership
fee charged, farmers may lack the incentives to join such cooperatives as
they do not see the benefits of becoming members. Alternatively, there
might have been no fee or low membership fee charged when co­
operatives were initiated, but initiate fee or increase in the fee for
newcomers after the services and benefits of cooperatives are seen.
Novkovic (2008) argues that membership fees may limit more people
from joining a cooperative while sustaining incentive-compatible prof­
itability. Furthermore, Chagwiza et al. (2016) confirm that “the joining
fee that cooperatives charge can be an entry barrier but cannot be
considered as a serious hindrance to cooperative participation among
small-scale producers”.
Expectedly, our exclusion variables were both significant in all se­
lection models confirming that they are highly correlated with cooper­
ative membership. Having a household member in local government
administration increases the likelihood of joining a cooperative as the
local government administration is used to drive the government’s
programs. Likewise, the more farmers attend the dairy farm manage­
ment trainings, the more likely they are to join cooperatives since they
may specialise in dairy farming and learn the benefits of cooperatives in
those trainings. Our results concur with Hao et al. (2018) who found that
cooperative membership is significantly influenced by having a family
member as a village cadre and the frequency of technical training
attended by farmers.
Finally, we find a positive significant effect of keeping crossbreeds
and pure-breed lactating cows on cooperative membership implying
that farmers who own crossbreeds or pure-breed lactating cows are more
likely to join cooperatives compared to those keeping local breed cows.
This is probably because farmers with crossbreeds and pure-breed cows
maybe regarded as dairy commercial-oriented farmers as these breeds
produce higher volumes of milk. Consequently, more cooperative
members keep pure breeds than non-members. This is consistent to the
findings by Kumar et al. (2018) who established that a higher proportion
of crossbred cows influences the farmers’ decisions to join dairy co­
operatives in India. Besides, Chagwiza et al. (2016) found a positive
relationship between cooperative membership and the proportion of
crossbreed cows to the total number of cows in the herd in Ethiopia.
4.3. Outcome model: Choice of marketing channels
The estimated correlation coefficients4 (ρ1 and ρ2 ) between the error
terms of the cooperative membership and choice of milk traders and
MCCs outcome equations are both negative confirming that there is a
hierarchical sorting (Fuglie & Bosch, 1995; Narayanan, 2014). This
implies that dairy cooperative members (regime 1) have above-average
returns irrespective of their membership, but they are better off when
they are members. On the other hand, non-members (regime 2) have
below-average returns irrespective of their membership, but they are
better off when they are members. Converselyary, in other buyers’
equation, the correlation coefficients have different signs where ρ1 is
negative while ρ2 is positive. This implies that dairy cooperative mem­
bership is propelled by comparative advantage (Narayanan, 2014;

3
As highlighted by one of the reviewers, since the fee is not determining the
sign of the association, but other unobservables which are not measured, then it
is more of an association/correlation rather than an effect.
4
ρ1 is the correlation coefficient between the error term of cooperative
membership and the choice of a marketing channel in regime 1 (members)
while ρ2 is the correlation coefficient between the error term of cooperative
membership and the choice of a marketing channel in regime 2 (non-members).

8
N. Habiyaremye et al.
Tesfaye & Tirivayi, 2018) where farmers who are members have above-
average returns from membership and non-members have above-
average returns from not being members. We present the results for
cooperative members and attach the results for non-members in Ap­
pendix B. The third, fifth and seventh columns of Table 5 present the
estimates of the effect of cooperative membership (for members) on the
choice of milk traders, MCCs, and other buyers as marketing channels
respectively.
The study results show that adherence to DBP standards has a sig­
nificant positive effect on the probability that members of dairy co­
operatives will sell to MCCs, and a significant negative effect on the
probability of selling to other buyers. These results confirm the impor­
tance of dairy cooperatives in improving the safety and quality of milk
through selling to MCCs. A recent study by Kiambi et al. (2022) in Kenya
found that, despite the lack of milk cooling tanks in most of MCCs, milk
from MCCs is the only raw milk that is within the acceptable East African
Standards (EAS) limits for total coliform counts. On the other handmilk
from other outlets (restaurants, milk bars, roadside vendors, and shops/
kiosks) exceed the acceptable EAS limits and its bacterial quality de­
teriorates faster; confirming further that indeed MCCs can play a posi­
tive role in promoting food safety and quality in developing countries.
Similarly, the selling price variable has a positive and significant
effect on the probability of members selling to MCCs while it has a
significant negative effect on the probability of selling to milk traders.
The findings for adherence to DBP standards and selling price variables
are not surprising as MCCs buy milk of high quality at a higher price than
the price offered by milk traders and other buyers (Habiyaremye et al.
2021). Therefore, farmers who target higher prices may adopt DBP and
choose MCC as a marketing channel that incentivises them for the
quality of milk produced. Previous studies (Brar et al., 2018; Jitmun &
Kuwornu, 2019; Shema et al., 2018) found a similar positive relation­
ship between the price of milk and the choice of a marketing channel.
Furthermore, MCCs have a check-off system (which may be preferred by
DBP-adhering farmers) of offering veterinary services and feed supple­
ments on credit to its milk suppliers and deducting the money from the
milk supplied (Heifer International, 2018). The check-off system is
mostly preferred to cash on purchase when dairy farmers acquire inputs
and services (Rao et al., 2019).
For cooperative members, the distance to the nearest selling point
has a positive significant effect (p < 0.05) on the probability of selling to
milk traders while the commercialization index has a negative signifi­
cant effect on the probability of selling to MCCs (p < 0.05). Furthermore,
the effect of age on the probability of selling to milk traders is positive
and significant, and negatively significant on the probability of selling to
MCCs. This suggests that older farmers are likely to sell to milk traders
while they are less likely to sell to MCCs. These findings can be attrib­
uted to the fact that milk traders collect milk themselves from the farms
while MCCs are located far from the farms. Consequently, farmers who
sell larger volumes of milk are likely to sell to milk traders at a lower
price than transport their milk to MCCs that are located far from them. In
addition, while older farmers are members of dairy cooperatives
(Table 3) and are expected to sell more to MCCs, their overall health
could be problematic and they may not have the physical energy to
transport milk to the MCCs unlike their younger counterparts, hence,
their choice for milk traders. Similar findings are reported by Brar et al.
(2018) who found that age of the farmer is negatively associated with
the choice of an organized milk marketing channel such as MCCs.
The education level of the household head has a negative significant
influence on the probability of selling to other buyers while cooperative
membership fee, the experience, and sex of the household head have
negative and significant effects on the probability of selling to milk
traders. This implies that the more experienced farmers are not enticed
by milk traders while male-headed households are less likely to sell to
milk traders since they have the physical energy to transport their milk
to other marketing channels. Furthermore, female-headed households
may be more time-constrained given their involvement in other
9
Food Policy 118 (2023) 102499
household activities such as domestic chores and child care which may
limit them from transporting milk. Lastly, residing in Nyabihu district
has a positive and significant effect on the probability of selling to MCCs,
and a negative significant effect on the probability of selling to both milk
traders and other buyers. This is probably due to the district’s hilly
terrain, hence, it becomes difficult for milk traders to reach farms as they
use bicycles to transport milk (farmers mainly remain with the option of
headloading to sell to MCCs). Moreover, Nyabihu is less dense with few
urban centers implying that few restaurants and individual customers
are making the ‘other buyers’ channel less common in the district.
5. Conclusions and policy implications
5.1. Conclusions
The contribution of milk production to food security, nutrition, and
farmers’ welfare has been documented worldwide. However, small­
holder milk producers face different constraints such as high transaction
costs that hinder them from getting the opportunities offered by various
marketing channels (Hao et al., 2018). While cooperatives play a critical
role in the reduction of transaction costs (Francesconi & Heerink, 2011)
and enhancement of farmers’ adoption of better farming technologies
(Verhofstadt & Maertens, 2014), little is known on the effect of dairy
cooperative membership on the choice of milk marketing channels. In
this paper, we estimate the effect of cooperative membership on the
choice of milk marketing channels and assess other factors that influence
the farmers’ choice of marketing channels. Using data collected from
370 milk producers in Rwanda, we employ an endogenous switching
probit model to control for the selection bias of cooperative
membership.
Our model allows us to first establish the determinants of cooperative
membership and then estimate the effect of membership on the choice of
marketing channel. We find that the distance to the nearest milk sale
point, age of the household head, owning lactating crossbreeds and pure
breed cows, membership fee, being into local government administra­
tion, and the number of dairy farm management trainings attended are
key factors that influence farmers’ decision to join a dairy cooperative.
For our main research interest, the results lead to the conclusion that
cooperative membership has positive and significant effects on the
choice of both MCCs and milk traders and the positive effects would hold
for non-members had they been members. Contrary, cooperative
membership reduces the likelihood of selling to other buyers while non-
members would be more likely to sell to other buyers had they been
members. The variability in the treatment effects confirms that each
marketing channel hasits inherent characteristic features that motivate
farmers to choose that channel. The presence of non-member farmers
(selling to milk traders or MCCs) who can be better off from being
members informs the possibility of cooperative expansion while it is
evident that non-member farmers who are selling to other buyers do not
have a comparative advantage of becoming members.
We also find that adhering to DBP standards has a varying effect on
different marketing channels depending on whether the farmer is a
cooperative member or not. For cooperative members, adhering to DBP
standards has no significant effect on the choice of milk traders mar­
keting channels but it has a positive significant effect on the choice of
MCCs and a negative effect on the choice of other buyers. For non-
members, adherence to DBP standards has significant positive effects
on both milk traders and MCCs and negatively affect thechoice of other
buyers. Furthermore, we find that the selling price has a positive effect
on farmers’ choice of MCCs, but the longer distance to MCCs may make
farmers (including cooperative members) choose milk traders who offer
lower prices than MCCs. Other determinants of the choice of marketing
channels include the commercialization index, sex, age, experience, and
education level of the household head, membership fee, and location of
the household. These variables have varying effects on different mar­
keting channels.
N. Habiyaremye et al. Food Policy 118 (2023) 102499

5.2. Policy implications farmers’ welfare.

Based on our findings, we suggest four key policy recommendations.
First, the variety and heterogeneity in sorting are crucial in policy-
making process. While cooperative membership has an undisputable
role in the choice of milk marketing channels, few farmers are members
of dairy cooperatives. Therefore, one would recommend policies that
enhance dairy cooperatives’ governance and structures so that many
farmers get incentivised to be members. Such policies can as well pro­
mote the creation of new dairy cooperatives across the country. Well-
structured, strengthened, and active cooperatives may attract dairy
farmers to seek membership. While this recommendation is justifiable, it
is vital to note that cooperative membership may not be the best option
for all farmers. Farmers are diverse and only a section of farmers will be
better off becoming cooperative members while others are likely to be
worse off irrespective of their membership status. Therefore, when
farmers can do better as members but are hindered to join cooperatives,
then this becomes a serious policy concern. However, if farmers choose
not to be members willingly, after their assessment and realising that
they are better off when not members, then, there should be less concern
about farmers’ ability to join cooperatives.
Secondly, adherence to DBP standards is a noble scheme and it in­
fluences farmers to sell to MCCs which not only offer higher prices to
farmers but also ensure the quality of milk is somewhat guaranteed, as
well as the regular and continued purchase of milk. The Ministerial
Order policy that prohibits selling milk through other marketing chan­
nels except through MCCs may use cooperative membership and food
safety concerns to rationalise the reasons behind the preference of MCCs
marketing outlet. Hao et al. (2018) recommended a blend of policies
that promote cooperative membership and public health policies to
explain the choice of cooperative marketing channel for apples in China.
In addition, policymakers in Rwanda can increase the use of MCCs’
attractive milk marketing channels by sharing the advantages of MCCs
to dairy farmers through radios and television and the provision of
quality extension services. This approach was recently recommended by
Kumar et al. (2019) to increase the adoption of modern-milk marketing
channels among smallholder dairy farmers in India.
Thirdly, although the MCCs are the only marketing channels that
conduct basic milk quality tests before buying the milk from farmers,
many MCCs are distant from dairy farmers, reducing the incentives for
dairy producers to sell to them. Thus, we recommend a strong­
public–private partnership that supports the establishment of new MCCs
so that farmers have easy access to them. While some MCCs have ag­
gregation points called Milk Collection Points (MCPs) that collect milk
from farmers that are located very far from the MCCs, these MCPs are
still few and lack infrastructure such as roads (from farms to MCPs).
Hence, the construction or rehabilitation of all-weather roads together
with an increased number of MCPs and MCCs and their improved
financial capacity will facilitate farmers’ access to a better marketing
channel while meeting an already growing consumer demand for safety
and quality in the food industry. Recently, Vandercasteelen et al. (2021)
promoted the proximity of remotely located dairy farmers to modern
buyers such as MCCs as they can improve dairy farms’ productivity and
Lastly, our findings give an insight into farmers’ choice of marketing
channels and the role of dairy cooperatives, however, we recommend
further studies that expand the scope of our analysis. The limitation of
this study is that we only limit the analysis to farmers’ standpoints.
Future studies that collect information from farmers and agents of each
marketing channel will give additional acumens into dairy farmers’
choice of marketing channel. Furthermore, we did not have data on the
characteristics of dairy cooperatives. The type of cooperatives such as
farmers-initiated versus government-initiated or open versus closed
cooperatives is a key factor that can influence the membership. There­
fore, future studies on the effect of cooperatives can include this infor­
mation in their analysis to give further light to policy makers. Finally,
future studies can perform formal tests of equality of coefficients be­
tween regimes which were beyond the scope of this paper.
Funding
This study was funded in part by the United States Agency for In­
ternational Development (USAID) Bureau for Food Security under
Agreement # AID-OAA-L-15-00003 as part of Feed the Future Innova­
tion Lab for Livestock Systems. Also, this work was partly funded
through the CGIAR Initiative Sustainable Animal Productivity for Live­
lihoods, Nutrition and Gender Inclusion supported by contributors to the
CGIAR Trust Fund. Any opinions, findings, conclusions, or recommen­
dations expressed here are those of the authors alone. We are responsible
for any errors of omission and commission.
CRediT authorship contribution statement
Naphtal Habiyaremye: Conceptualization, Methodology, Software,
Validation, Formal analysis, Investigation, Data curation, Writing –
original draft, Writing – review & editing. Nadhem Mtimet: Concep­
tualization, Methodology, Writing – original draft, Writing – review &
editing, Supervision, Project administration, Funding acquisition. Emily
Awuor Ouma: Conceptualization, Methodology, Writing – original
draft, Supervision, Project administration, Funding acquisition. Gideon
Aiko Obare: Conceptualization, Methodology, Writing – original draft,
Writing – review & editing, Supervision.
Declaration of Competing Interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
the work reported in this paper.
Acknowledgements
The corresponding author is thankful to German Exchange Pro­
gramme (DAAD) for co-funding his PhD. The authors are grateful for the
two anonymous reviewers for their constructive comments. The authors
would like to also thank Dr. Tabe-Ojong Martin Paul Jr. for his insightful
comments.

Appendix A. Multivariate probit model (MVPM) results

Variables Membership Milk traders Membership MCCs Membership Other buyers

Commercial index − 0.218 (0.734) − 0.683 (0.512) − 0.171 (0.734) 0.231 (0.508) − 0.237 (0.735) − 0.088 (0.454)
Distance to nearest milk selling point in 0.146 *** (0.054) − 0.042 (0.048) 0.145 *** (0.054) 0.027 (0.045) 0.147 *** (0.054) 0.003 (0.046)
Km
Dairy farming experience in years − 0.004 (0.012) − 0.001 (0.010) − 0.003 (0.013) − 0.007 (0.010) − 0.003 (0.013) 0.005 (0.009)
Sex of the household head 0.317 (0.402) − 0.163 (0.249) 0.296 (0.340) − 0.163 (0.254) 0.311 (0.401) − 0.232 (0.233)
Age of the household head in years 0.016 (0.011) − 0.010 (0.007) 0.016 (0.011) 0.007 (0.008) 0.015 (0.011) − 0.001 (0.007)
Education level of the household head − 0.020 (0.038) − 0.054 ** (0.026) − 0.021 (0.038) 0.045 * (0.026) − 0.020 (0.038) − 0.024 (0.023)
(continued on next page)

10
N. Habiyaremye et al. Food Policy 118 (2023) 102499

(continued )
Variables Membership Milk traders Membership MCCs Membership Other buyers

Off-farm income − 0.379 (0.309) 0.446 ** (0.177) − 0.363 (0.307) − 0.209 (0.180) − 0.374 (0.309) 0.019 (0.159)
Crossbreed lactating cows 1.554 *** (0.583) 0.266 (0.389) 1.611 *** (0.591) − 0.297 (0.335) 1.570 *** (0.586) − 0.107 (0.307)
Pure breed lactating cows 2.194 *** (0.546) 0.190 (0.394) 2.217 *** (0.553) − 0.200 (0.331) 2.203 *** (0.550) − 0.146 (0.303)
Membership fee 0.286 *** (0.030) − 0.044 * (0.025) 0.287 *** (0.030) 0.023 (0.023) 0.287 *** (0.030) 0.030 (0.023)
Local administration 0.983 *** (328) − 0.981 *** (0.324) − 0.982 *** (0.327) −
Training 0.235 *** (0.072) − 0.231 *** (0.072) − 0.230 *** (0.073) −
Adherence to DBP − − 0.188 (0.194) − 1.633 *** (0.217) − − 1.607 ***
(0.198)
Selling price in Rwf per litre − − 0.036 *** − 0.018 *** (0.003) − 0.006 *** (0.002)
(0.004)
Selling season − − 0.096 (0.175) − 0.037 (0.177) − 0.065 (0.160)
Location − 0.187 (0.271) − 1.839 *** − 0.166 (0.270) 1.761 *** (0.237) − 0.175 (0.270) − 0.514 ** (0.199)
(0.283)
Constant − 4.582 *** (1.079) 8.724 *** (1.144) − 4.669 *** (1.084) − 6.976 *** − 4.580 *** (1.078) 0.463 (0.835)
(0.966)
Wald χ2 − 220.48 *** − 232.40 *** − 211.34 ***
ρ − 0.038 (0.156) − 0.128 (0.162) − − 0.077 (0.143)

Note: Standard errors clustered at the household level are in parentheses and *** p < 0.01, ** p < 0.05, * p < 0.1.

Appendix B. Endogenous switch probit (ESP) model results of three main milk marketing channels for non-cooperative members

Variables Milk traders MCCs Other buyers

Non-member Non-member Non-member

Commercial index − 0.508 0.793 0.048

(0.534) (0.568) (0.534)
Distance to nearest milk selling point in Km − 0.111 ** 0.005 − 0.034
(0.051) (0.054) (0.065)
Dairy farming experience in years − 0.001 − 0.017 0.006
(0.012) (0.013) (0.011)
Sex of the household head (=1 if male) 0.063 − 0.120 − 0.251
(0.271) (0.286) (0.282)
Age of the household head in years − 0.014 * 0.008 0.002
(0.008) (0.008) (0.008)
Education level of the household head − 0.055 ** 0.045 * − 0.011
(0.027) (0.027) (0.025)
Off-farm income (=1 if there is) 0.284 − 0.206 0.080
(0.186) (0.198) (0.183)
Crossbreed lactating cows − 0.121 − 0.729 ** 0.299
(0.487) (0.370) (0.423)
Pure breed lactating cows − 0.430 − 0.888 ** 0.365
(0.536) (0.399) (0.501)
Membership fee (the amount of money paid to become a cooperative member in Rwf) − 0.042 − 0.220 *** 0.051
(0.054) (0.048) (0.098)
Adherence to DBP (=1 if the household adheres) 0.327 * 1.412 *** − 1.536 ***
(0.192) (0.224) (0.231)
Selling price in Rwf per litre − 0.033 *** 0.015 *** 0.009 ***
(0.004) (0.003) (0.003)
Selling season (=1 if milk is sold in rainy season) − 0.097 0.095 0.035
(0.180) (0.192) (0.184)
Location (=1 if Nyabihu district) − 1.671 *** 1.479 *** − 0.403 *
(0.303) (0.261) (0.242)
Constant 8.553 *** − 5.928 *** − 0.769
(1.237) (1.050) (1.054)

Note: Standard errors clustered at the household level are in parentheses and *** p < 0.01, ** p < 0.05, * p < 0.1.

Appendix C. Falsification test on the validity of the selection instruments

Variables (1) (2) (3) (4)

Coop membership Milk traders MCCs Other buyers

Local administration 0.981 *** 0.148 − 0.026 0.088

(0.326) (0.255) (0.273) (0.250)
Training 0.236 *** 0.023 0.093 − 0.061
(0.072) (0.058) (0.062) (0.060)
Other control variables Included Included Included Included
Constant − 4.593 *** 9.049 *** − 7.421 *** − 0.572
(1.078) (1.385) (1.201) (1.039)
Observations 370 271 271 271

11
N. Habiyaremye et al. Food Policy 118 (2023) 102499

Note: (1) is a probit model for selection equation; (2), (3), and (4) are probit models for outcome equations for non-cooperative members; Standard
errors are in parentheses; *** p < 0.01. All other control variables are included in the models, but we only report the estimates of the instruments to
reduce space.

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 Industrial Marketing Management 113 (2023) 168–179

Contents lists available at ScienceDirect

Industrial Marketing Management

journal homepage: www.elsevier.com/locate/indmarman

Research paper

Neuroscience in business-to-business marketing research: A literature

review, co-citation analysis and research agenda
Christina Öberg a, b
a
Linnaeus University, School of Business and Economics, SE-391 82 Kalmar, Sweden
b
The Ratio Institute, P.O. Box 3203, SE-103 64 Stockholm, Sweden

A R T I C L E I N F O A B S T R A C T

Keywords: Neuroscience has led the way in bridging the gap between the social and natural sciences. The ongoing trans­
Artificial intelligence formations in the business landscape have brought human-machine interaction and multi-agent systems to the
Business-to-business marketing forefront. This underscores the importance of theories that bridge the gap between human brain processes and
Co-citation analysis
business-to-business marketing practices. Despite the potential of neuroscience in business-to-business market­
Neuroscience
ing, such interdisciplinary research is extensively lacking. This paper employs systematic literature reviews and
Research agenda
Systematic review co-citation analyses to: a) establish the absence of business-to-business marketing–neuroscience research; b)
investigate the ways in which the broader business and management discipline has bridged with neuroscience to
inspire such integration between business-to-business marketing and neuroscience; c) describe bridging ap­
proaches; and d) propose a research agenda for business-to-business marketing. The co-citation analyses show
that the business and management discipline has focused on the ‘within-brain’ or behavioural aspects of
neuroscience. In addition, the discipline has continually integrated new neuroscience insights or increasingly
developed theories that are internalised within the discipline, independent of neuroscience. The paper's main
contributions are the reviews and co-citation analyses, as well as an account of bridging in interdisciplinary
research. Furthermore, the proposed research agenda enhances our understanding of the potential of neurosci­
ence in business-to-business marketing.

1. Introduction
Neuroscience, which explores the brain's functions related to
perception, behaviour, learning, and consciousness (Kandel, 2012), has
enormous potential for business-to-business marketing. It can help
explain the consequences of artificial intelligence for interactions and
trust in exchanges (Krueger & Meyer-Lindenberg, 2019; Saxe, Nelli, &
Summerfield, 2021), interpretations of smart data for manufacturing
and sales (Wang, Xu, Zhang, & Zhong, 2022) and future-thinking in
business markets. Its potential also lies in advances in social neurosci­
ence (Ibáñez, Sedeño, & García, 2017) in terms of multi-agent decision-
making, where multiple parties may represent conflicting interests.
Therefore, integrating neuroscience knowledge with business-to-
business marketing provides new insights that help answer the ‘why’
questions of emerging business practices. However, little research has
integrated the two disciplines (cf. Bagozzi & Verbeke, 2020). The few
recent studies that have combined neuroscience with business-to-
business marketing research have focused on episodes of sales and
pricing or have argued for closer integration of the two research
disciplines (e.g., van Zeeland-van der Holst & Henseler, 2018). These
studies have neither captured the interactive characteristics nor
emerging business practices in business markets. This raises the ques­
tion: How can neuroscience be integrated with business-to-business
marketing research? This paper addresses this question while consid­
ering the specifics of business-to-business marketing and past efforts to
bridge with neuroscience in social sciences. The purpose of the paper is
to discuss the potential for integrating neuroscience with business-to-business
marketing research.
In the past, business-to-business marketing has often drawn upon
ideas from the broader business and management discipline (of which
business-to-business research is a part) (Aramo-Immonen et al., 2018;
Markovic, Jaakkola, Lindgreen, & Di Benedetto, 2021). This paper seeks
inspiration in the business and management discipline, given the lack of
business-to-business–neuroscience research to date, where the paper
highlights the form of interdisciplinary bridging: how interdisciplinary
research relates various disciplines. This allows a forward-oriented
discussion – rather than a review of past findings – of business-to-
business marketing knowledge. The paper discusses the specifics of

E-mail addresses: christina.oberg.se@gmail.com, christina.oberg@lnu.se.

https://doi.org/10.1016/j.indmarman.2023.06.004
Received 31 January 2022; Received in revised form 16 May 2023; Accepted 8 June 2023
Available online 16 June 2023
0019-8501/© 2023 The Author. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-
nc-nd/4.0/).
C. Öberg
business-to-business marketing and potential avenues – analogous or
different to business and management research – for integrating
business-to-business marketing with neuroscience. To this end, a co-
citation analysis (Van Eck & Waltman, 2010; Zupic & Cater, 2015) of
business and management research and neuroscience is conducted. It
captures bridging strategies as either a continuous integration across
research disciplines or an internalisation in which new knowledge builds
on existing research within the same discipline (i.e., business and
management that is disconnected from the continuous development of
neuroscience). The co-citation analysis further suggests a separation
between research focused on ‘within-brain’ understandings and research
focused on behaviour. In developing a research agenda, this paper
highlights artificial intelligence and smart data, advances in neurosci­
ence related to social behaviour and forecasting, and methodological
opportunities for measuring perception, which thereby addresses
several of the weaknesses inherent in the social sciences and which are
central to business-to-business marketing research.
The paper makes the following contributions. By addressing ‘how’
disciplines can be bridged in interdisciplinary research (Markovic et al.,
2021), the paper reveals opportunities and consequences of such
research. More specifically, continuous integration between disciplines
allows constant theoretical development, while internalisation helps to
consolidate within-discipline knowledge. These approaches are dis­
cussed in the context of integrating neuroscience with business-to-
business marketing and the paper thereby creates opportunities to
develop new theories related to emerging business practices in business-
to-business marketing. These include theorising human-machine busi­
ness interactions through explaining human behaviour when negoti­
ating with a machine mimicking human behaviours and indeed the
machine's processing as an imitation of the brain, deep learning and
constraints related to machine learning. It involves explaining in­
fluences of digitalisation and artificial intelligence on business planning
and execution. It contains explaining why consensus and conflict emerge
and develop in multi-agent systems, and the role of experiences and
emotions in decision-making and interactions. It also includes why
managers – supported or not by artificial decision tools – may fail to
capture a future ahead or may fall into traps of disinformation.
Furthermore, the paper highlights methodological opportunities related
to neuroscience and including the measurement of brain activity and
experiments in real-life settings.
The paper is structured as follows. First, an introduction to neuro­
science, outlining why it is important in business-to-business marketing
is provided, followed by a description of the research design. The
research design includes two literature reviews: one on business-to-
business marketing and neuroscience, and another on business and
management research and neuroscience. These serve as background for
the co-citation analyses. Co-citation analyses refer to a method for
identifying semantic ties in research through shared references (Small,
1973) and are valuable for comprehending the integration in interdis­
ciplinary research. The main data analysed in the paper are the results of
the co-citation analysis of business and management research and
neuroscience given the lack of research integrating business-to-business
marketing and neuroscience. The results of the analyses are presented
and discussed after the research design, and a research agenda is
developed. The paper ends with a concluding note.
2. Neuroscience: what it is and why it is important in business-
to-business marketing research
Neuroscience can be described as the study of the brain's processing
of stimuli (Petersen & Posner, 2012; Posner & Petersen, 1990) with a
focus on the neural system, including neurons, circuits, and signal re­
sponses (Bassett & Sporns, 2017; Damasio & Carvalho, 2013; Ralph,
Jefferies, Patterson, & Rogers, 2017). It helps to explain the physical
processes underlying memory, emotions, and future thinking in the
brain (Gold & Shadlen, 2007; Schacter et al., 2012; Uddin, 2021).
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Industrial Marketing Management 113 (2023) 168–179
Research in neuroscience examines the brain's structure, functionality,
malfunctions, and neural system development or changes.
In dealing with the brain's structure and functions, neuroscience is
best characterised as a multidisciplinary science that encompasses the
physiological anatomy of the brain from a biological perspective, while
bridging to psychology (Banich & Compton, 2018) and social neuro­
science. It has been described as a discipline that pioneered the bridging
between the natural and the social sciences (Ibáñez et al., 2017). Spe­
cifically, cognitive and behavioural neuroscience deal with the neural
circuits that produce psychological functions – that is, how the brain
works to develop reactions (Petersen & Sporns, 2015) – while social
neuroscience concerns social cognition related to negotiations, cooper­
ation and coordination.
In examining the application of neuroscience to cognition and be­
haviours, we can start to comprehend its potential for business-to-
business marketing. Numerous topics connect not only cognition, so­
cial neuroscience and decision-making, but also methodological ad­
vances related to tracking tools (cf. Eckstein, Guerra-Carrillo, Singley, &
Bunge, 2017) to present practices and recent interests in business-to-
business marketing. Among others and to reconnect to the suggestions
mentioned earlier, these practices and interests include how digital­
isation and artificial intelligence influence decision-making (e.g., with
smart solutions and decision support), interactions (e.g., human­
–machine and machine–machine interactions affecting trust) and at­
tempts to use neuroscience's understanding of brain functions and
processes to mimic the human brain. Neuroscientific insights into social
cognition and behaviours create a potential to explain new inter-
organisational forms including platforms, non-professionalised actors,
ecosystems, communities and crowds, where decision-making and
learning are distributed among actors with their own, potentially
diverse, agendas (multi-agent systems) (Djalovski, Dumas, Kinreich, &
Feldman, 2021; Fukui et al., 2006; Harlé & Sanfey, 2012). This is
particularly relevant when sustainability, for instance, competes with
business goals. Furthermore, neuroscience can explain how the human
and artificial mind processes foresight and prediction (Knutson & Gen­
evsky, 2018). Combined, these practices and recent interests go well
beyond neuromarketing's relatively narrow focus on marketing
campaign stimuli and products in discrete purchases and enable theo­
retical developments in business-to-business marketing that address
important ‘why’ questions on interactions and system-level organising.
Despite the potential benefits, current research bridging business-to-
business marketing and neuroscience is limited, with a narrow focus on
sales and pricing, or with researchers indicating a lacking integration in
business-to-business marketing (Lim, 2018a) and neuroscience (Waytz,
Cacioppo, & Epley, 2010). A literature review (see 3.1 Literature reviews
and analyses) revealed only nine journal articles that combine business-
to-business marketing and neuroscience: Woodside (2015) discusses
behavioural pricing, while Hodgkinson and Healey (2014) refer to social
neuroscience in an article about how parties embrace radical innova­
tion. Bagozzi and Verbeke (2020) describe salespeople's motivational
factors, using organisational neuroscience as one foundation to grasp
behaviour. Van Zeeland and Henseler (2018) use neuroscience together
with psychology and biology to capture the social cues of vendors, while
van Zeeland-van der Holst and Henseler (2018) debate how neurosci­
ence can help bridge shortcomings related to trust. Geiger and Huff­
meier (2020) point to the limitations of human cognition in their
theorising about negotiation. Cunningham (2007) metaphorically
compares neurological networks with business networks. Lim (2018a)
describes the potential of integrating neuromarketing with business-to-
business marketing. Finally, Waytz et al. (2010) approach the question
from a neuroscience point of view and highlight potential areas of
application beyond psychology that include (business-to-business)
marketing.
As previously mentioned, these articles provide limited insight into
repeated exchanges, complex offerings, social and business ties, or the
current practices and interests in business-to-business marketing. While
C. Öberg
two of the articles (Lim, 2018a; Waytz et al., 2010) suggest the potential
for integrating neuroscience and marketing, they do not explore this
potential beyond a consumer-focused perspective on marketing and
customer perception. Furthermore, none of the articles employ neuro­
science as a research method. Therefore, it is crucial to discuss the po­
tential for integrating neuroscience with business-to-business marketing
research.
3. Research design
This paper draws on two systematic literature reviews (Tranfield,
Denyer, & Smart, 2003) and co-citation analyses (Boyack & Klavans,
2010). The first literature review aimed to identify the research gap,
namely the lack of previous research integrating neuroscience with
business-to-business research. The second review focused on the busi­
ness and management literature to identify how research has bridged
business and management research and neuroscience. The first co-
citation analysis aimed to track publications cited together in articles
integrating neuroscience and business-to-business marketing, while the
second co-citation analysis examined the references in the research
bridging neuroscience with business and management research, identi­
fying the form of integration and central topics to inspire potential
business-to-business marketing–neuroscience integration and develop a
research agenda. The research agenda was based on: 1) examining how
business and management research has bridged with neuroscience to
date and identifying possible alternative integrations; 2) identifying
questions relevant to business-to-business marketing from the bridging
of neuroscience and business and management research; 3) investigating
recent developments in neuroscience related to emerging issues in
business-to-business marketing; and 4) identifying methodological
research opportunities from neuroscience (cf. Eckstein et al., 2017).
3.1. Literature reviews and analyses
The Web of Science database was selected for the literature reviews
due to its collection of peer-reviewed research published in reputable
journals. Journal articles, including review articles, were targeted in all
parts of the reviews, while the co-citation analyses included books, book
chapters, conference papers, and other types of referenced output cited
in the reviewed articles. Although the focus on journal articles in the
literature reviews may have excluded more recent ideas (Adams, Smart,
& Sigismund Huff, 2017), it ensured that the publications were peer-
reviewed. The reviews followed the steps of systematic literature re­
views outlined by Tranfield et al. (2003) (see Appendix A).
To capture neuroscience research, a protocol was set for both reviews
(i.e., the review connecting neuroscience with business-to-business
research, and the review targeting how neuroscience has been bridged
with the business and management literature). Based on preliminary
searches, a bank of concepts (neuroscience, cognitive science, cognitive
psychology, neurology, and neuropsychology) was compiled to capture
relevant literature within neuroscience rather than social science's
interpretation of neuroscience (e.g., neuroeconomics and neuro­
marketing). These latter concepts were instead expected to be found in
the literature reviews and subsequent co-citation analyses. Other con­
cepts were also tested, including an open ‘neuro*’ search (i.e., any term
starting with ‘neuro’), but the selected concepts (neuroscience, cognitive
science, cognitive psychology, neurology and neuropsychology) better
reflected the neuroscience literature, as was the ambition of the search.
The selected concepts partly overlapped and partly diverged in their
focus on branches of brain science and their proximity to either stimuli
(cognitive psychology) or the functional processes of the brain
(neurology). Searches were conducted that included and excluded each
of the concepts in relation to business and management research and
neuroscience to ensure consistency of the protocol. Fig. 1 illustrates
search results for individual concepts and their combination with
neuroscience. As the figure reveals, the search concepts largely
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Industrial Marketing Management 113 (2023) 168–179
Fig. 1. Search results and overlaps between search terms and neuroscience.
Note: Numbers refer to the total number of articles per search term. In the cross-
sections, the number of articles refers to the term in combination with
neuroscience.
complemented one another, only partly overlapping while being rele­
vant to the protocol through their bridging with business and manage­
ment research.
To search for studies in business-to-business marketing, the identi­
fied neuroscience concepts were combined with the following terms:
B2B marketing, industrial marketing, business-to-business marketing,
and business marketing. This search yielded nine journal articles, which
were described in Section 2. Neuroscience: What it is and why it is
important in business-to-business marketing research, and were used to
identify the current research gap. Based on this limited result and on
business-to-business marketing's quest for inspiration from the broader
business and management discipline (Aramo-Immonen et al., 2018), an
overall strategy to review the bridging between neuroscience and
business and management research emerged. It is important to note that
a key part of this strategy was to focus on how the disciplines were
bridged. Therefore, the second literature review combined the neuro­
science concepts with the research areas of business and management, as
defined by the Web of Science database, while limiting the search to
articles and reviews. Alternative searches were evaluated. Focusing on
research areas defined by the database minimised selection biases but
offered the possibility of capturing business and management research
(in combination with neuroscience concepts) in journals outside the
defined disciplines (through not, for instance, limiting the search to
business and management journals).
The search for the neuroscience concepts (neuroscience, cognitive
science, cognitive psychology, neurology, and neuropsychology) in
business and management research yielded 674 articles, of which 52
were literature reviews. The review articles were first consulted to
capture their content and possible overlaps with the purpose of this
paper. Each of these was read to categorise what part of business and
management research they represented (categories developed
throughout the process of analysis). The 52 review articles were found to
be distributed among the following research areas: organisational
management (25), consumer marketing (13), research methodologies
(8), entrepreneurship (2), service marketing (1), and other areas (3).
None of the reviews overlapped with the reviews conducted in this
paper, and none of them addressed questions related to the bridging
between disciplines.
Next, the 674 articles were analysed based on their year of issue, and
coded in terms of their disciplines and contents (Paul & Criado, 2020).
The disciplines were traced based on the AJG (Academic Journal Guide)
journal categorisation, while the content codes were derived from
empirical coding and reduction of codes categorising the individual
articles.
C. Öberg
3.2. Co-citation analysis
A co-citation analysis is a bibliometric method that links publications
based on how they are referred to in combination by others (e.g., Van
Eck & Waltman, 2010; Zupic & Cater, 2015). Co-citation analysis is an
effective approach to understand how various research items are inter­
connected, to map knowledge creation and interconnectivity, and to
explore how interdisciplinary research links different disciplines (Small,
1973). While co-citation analysis has been practiced for decades in in­
formation systems and operations research, it has only recently been
introduced to the business-to-business marketing domain (e.g., Aramo-
Immonen et al., 2020). It is based on the principle that if two journals
(A1 and A2) both cite two other publications (B1 and B2), the publica­
tions B1 and B2 have a semantic tie between them (Boyack & Klavans,
2010; Boyack, Klavans, & Borner, 2005). The more articles (A1 to An)
that cite B1 and B2 in combination, the stronger the tie between B1 and
B2. Fig. 2 illustrates how co-citation builds ties among research items.
If publication B2 is also cited together with publication B3, another
tie is created, which ultimately constructs a network of co-cited publi­
cations. In such a network, clusters of co-cited articles emerge based on
citing articles (A1, etc.) sharing more of the references together while
more limitedly doing so with references in another cluster (Saunders,
1994). Visual mapping (Chen, 2006; Van Eck & Waltman, 2010, 2014;
Waltman & Van Eck, 2012) (see Fig. 4 in 4.2 Co-citation analysis on
neuroscience in business and management research) helps to algorithmi­
cally identify clusters of large sets of references. However, interpretation
of the clusters is a manual process, as in any cluster analysis (Hoen,
2002; Punj & Stewart, 1983).
The initial co-citation analysis examined the nine articles on
business-to-business marketing and neuroscience, which showed a
fragmented set of publications, with few and little connectivity among
them and few co-cited references.1 The main co-citation analysis focused
on the bridging between business and management research and
neuroscience, using the 674 journal articles from the literature review to
generate 41,922 references (journal articles, books, book chapters and
conference papers). To avoid arbitrary clustering and based on meth­
odology in past co-citation analyses (Boyack & Klavans, 2010), a mini­
mum of five articles (A1 to A5) were required to cite the same two
publications (B1 and B2) as a criterion for determining semantic ties. By
importing the 674 articles along with their 41,922 references into
VOSviewer (with the program deciding the clusters based on the co-
citation criterion), 830 co-cited publications were identified as distrib­
uted among five clusters.
The 830 co-cited publications were thereafter identified using their
DOI codes and online searches for books. Next, they were coded in terms
of research foci and discipline. The research foci were coded based on
the content of individual publications (empirical coding), which were
subsequently compared among the publications to reduce the number of
codes and eventually to ensure distinctness among clusters. The research
discipline was coded based on individual publications' outlets to theorise
about within-discipline and interdisciplinary citations, keeping in mind
that the 830 publications were those cited by the original 674 articles on
business and management research and neuroscience. Continuing to cite
neuroscience sources means that the business and management research
still integrates emerging neuroscience ideas. Meanwhile, the within-
discipline citations in business and management indicate how the
business and management research has internalised ideas and poten­
tially developed its own take on them. For cited business and manage­
ment publications, further coding was applied to identify which area of
business and management research they represented (consumer mar­
keting, organisation studies, etc.). Table 2a (see 4.2 Co-citation analysis
1
The co-citation analysis pointed at a pairwise citing of a total of eight
publications outside marketing research, with a predominate representation
between the two articles by van Zeeland and Henseler as citing research.
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Industrial Marketing Management 113 (2023) 168–179
on neuroscience and business and management research) was constructed
using pivot tables to link the various clusters to their respective disci­
plines and of publication, with Table 2b representing the breakdown of
business and management outlets. The clusters were then plotted based
on their orientations towards within-discipline or interdisciplinary
referencing (as taken from Table 2) and their focus on either behaviours
or the brain processes behind them based on the research foci coding.
This helped to answer how neuroscience has been bridged with business
and management research and identify which parts of neuroscience
were studied. The analysis was verified with five researchers.
4. Findings
4.1. Neuroscience in business and management research
The 674 articles resulting from the search for the neuroscience
concepts in business and management research are presented in Fig. 3,
organised by year of publication. As depicted in the figure, there has
been a sharp increase in such research in recent years.
The literature review shows that, based on journal categorisation,
there is a dominance of consumer marketing integration with neuro­
science (228 articles), followed by management research (146) and
psychology (115). Of note is the distribution among management-
related areas (management, organisation, HRM, strategy), which
together represent 255 articles. Other disciplines, while keeping in mind
the search for neuroscience in business and management research,
include informatics (48), entrepreneurship (33), and economics (23).
Research within these various disciplines and areas reflects some­
what complementary perspectives on neuroscience. The research is
primarily linked to attention and cognition, particularly regarding the
impact of brands and offerings (Andreassen & Lindestad, 1998; Thaler,
2008), and the art of knowing in organisations (Blackler, 1995), which
relates to cognitive psychology and science. In entrepreneurship and
partly in strategy research, the focus is on understanding the future with
prediction as a central term linked to uncertainty (Griffin & Grote, 2020;
Martins, Rindova, & Greenbaum, 2015), intuition and an entrepre­
neurial mind-set (Baron & Ward, 2004; Nonaka & Takeuchi, 2021).
Organisational leadership is assumed to face similar questions as the
entrepreneur, connecting to individuals' cognition and predictions.
Research also explores the interdisciplinary connections between
neuroscience and specific disciplines in terms of neuro-IS (Dimoka,
Pavlou, & Davis, 2011; vom Brocke & Liang, 2014), consumer neuro­
science (Karmarkar & Plassmann, 2019; Plassmann, Venkatraman,
Huettel, & Yoon, 2015), strategy and neuroscience (Waldman & Balth­
azard, 2015; Waldman, Balthazard, & Peterson, 2011a; Waldman, Ward,
& Becker, 2017), and neuromarketing (Lim, 2018b). In the stream of
recent advances in methodology, neuroscience is described as playing a
role in brain imaging, eye tracking and the study of social consumption
as multi-brain activities (He, Freudenreich, Yu, Pelowski, & Liu, 2021;
Waldman, Wang, & Fenters, 2019; Zuschke, 2020). Articles purely
focused on methodology tend to concentrate on the analysis potential of
neuroscience (Galetsi & Katsaliaki, 2020; Wenzel & Van Quaquebeke,
2018).
Overall, the bridging between neuroscience and business and man­
agement research largely concerns three areas: 1) cognitive science and
psychology related to consumers and managers, and social consumption
and networks as emerging areas; 2) prediction connected with an un­
foreseeable future for managers and entrepreneurs; and 3) advances in
methodology designed to capture brain processing.
4.2. Co-citation analysis on neuroscience in business and management
research
The main co-citation analysis presented in this paper examines the
interdisciplinary bridging between business and management research
and neuroscience as a means to deal with the ‘how’ of interdisciplinary
C. Öberg Industrial Marketing Management 113 (2023) 168–179

Fig. 2. The principle of co-citation.

Note: Articles A1–A5, representing the 674 articles in the paper, all cite referenced publications B1 and B2 and thereby semantically connect them (depicted as a tie in
Fig. 4). Among the 41,922 references analysed, there were 830 occurrences of co-cited references when at least five articles cited any two (or more) of them together.

Fig. 3. Articles from Web of Science, by year of publication.

Notes: N = 672. The two articles published in 2022 are excluded because the search was conducted in early January 2022.

Fig. 4. Co-citation analysis.

Notes: Nodes and texts refer to co-cited publications. Ties occur where at least 5 of the 674 articles on neuroscience and business and management refer to the nodes
together among the 41,922 references. Clusters are determined mathematically by VOSviewer based on the criterion of five articles citing any references together.
The size of the nodes indicates how many times they are cited; the colours indicate where publications are cited together.

172
C. Öberg
bridging. Fig. 4 depicts the co-citation analysis of the 674 journal articles
and their 41,922 references, forming 830 co-cited publications. The
different clusters signify frequently co-cited publications, and the
various colours identify individual clusters. It is worth repeating that the
co-cited publications create the nodes (B1–B830), while the 674 articles
on neuroscience and business and management create the ties among
the nodes (A1–A674, see Fig. 2). The size of the nodes represents the
number of citations of the publications. Table 1 summarises the clusters,
and a full transcript of cluster publications (and the 674 citing articles) is
available in the supplementary materials. Additionally, an alternative
version of Fig. 4 is provided, which includes ties and references but
excludes node sizes.
Cluster I (red) is a highly cohesive cluster that deals with the core of
cognition based in psychology but does not delve into how the brain
processes stimuli. The publications in this cluster focus on business be­
haviours and mental processes in the intersection with psychology. Its
references are relatively old compared to other clusters, and they deal
with management issues related to a competitive business landscape
(Porac, Thomas, Wilson, Paton, & Kanfer, 1995). More than half of the
references (119 of 222 publications) are within business and manage­
ment, while the rest deal predominantly with cognition in psychology.
Renowned scholars who publish across management and psychology,
and often break new ground with their thoughts on management (e.g.,
Cyert, Simon, Weick, Williamson), authored several publications in this
cluster. This cluster indicates how scholars build on past knowledge
already internalised into business and management research, and the
few neuroscience publications in this cluster (4 of 222 publications)
research emotions and focus on individual-based psychological and
behavioural aspects.
Cluster II (green) focuses on neuromarketing, which departs from
discrete purchase issues in marketing and uses related examples to
expand knowledge in neuroscience. Compared to Cluster I, publications
in Cluster II are more recent, and the cluster encompasses publications in
neuroscience to a greater extent (53 of 200). The cluster focuses on how
the brain functions in relation to the stimuli of marketing campaigns and
products, rather than social interactions or organisations as units, or a
conscious strategic thought process. The publications in the cluster
describe brain activities related to perception and methodological ad­
vances, including eye tracking (Chandon, Hutchinson, Bradlow, &
Young, 2009).
Cluster III (blue) explores neuroscience in organisational research,
specifically organisational cognitive neuroscience. The cluster encom­
passes several scholars who are currently setting an agenda for organ­
isational neuroscience in management research (see, e.g., the Academy
of Management Interest Group). The cluster partly targets sources of
neuroscience (31 of 184 publications) but increasingly refers to a nar­
rower scope of organisational management, with the ambition to create
organisational neuroscience as a sub-discipline within business and
management research. It thereby also distinguishes neuroscience from
past cognition work in organisational research (Waldman et al., 2019),
Table 1
Identified co-citation clusters.
Cluster Title Description
Cluster I (Red) Cognition Psychological cognition related to strategy and
management of firms
Cluster II Neuromarketing Consumers' perception of offerings and notion of
(Green) brands and images
Cluster III Organisational neuroscience Social neuroscience basing its research on
(blue) advances related to neuroimaging and thereby
brain processing
Cluster IV Integration – neuroscience Research stipulating or questioning integrations
(lavender) integration into social sciences? among neuroscience and business and
management fields
Cluster V Psychological processes Psychological takes on methods
(yellow)
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Industrial Marketing Management 113 (2023) 168–179
where, for instance, the focus on leadership and the workplace is more
prominent in advancing the understanding of intelligence (Becker, Volk,
& Ward, 2015). The cluster also includes publications on social neuro­
science to map feelings related to team experiences (Singer & Lamm,
2009). In its ambition to create organisational neuroscience as a sub-
discipline, it focuses more heavily on brain processes than Cluster I.
Cluster IV (lavender) focuses on the central question of this paper:
How can neuroscience inform other research disciplines? The publica­
tions in this cluster discuss neuroscience in relation to management,
economics and information systems research. The cluster's publications
are divided between articles in science (24) and neuroscience journals
(32 of 119 publications) and within-discipline publications of the tar­
geted disciplines (economics, management and information systems).
Compared to the other clusters, Cluster IV includes the most references
to natural sciences. The transferability of neuroscience insights means
that interdisciplinary references are continuous (Rousseau, Sitkin, Burt,
& Camerer, 1998), looking at aspects of present knowledge in a new
light, or stating their research potential in the targeted disciplines of
research.
Cluster V (yellow) is the weakest, given its broader distribution and
less-defined core compared to the other clusters (see Fig. 4). Further­
more, there is some overlap of the scholars in this cluster with the other
clusters, which indicates that ideas represented in the other clusters also
appear in this one. This cluster partly deals with various methodology
issues when studying unconscious cognitive processes or, as a repeated
theme across publications, brand perception and the general link to
psychology (54 of 105 publications are in psychology). The link to
psychology is stronger than to brain-tracking neuroscience, compared to
Cluster II. Method bias discussions are recurrent in the cluster.
The description of the clusters points to how they indeed represent
different core ideas, or to be more precise: how business and manage­
ment research connects with neuroscience in different ways and from
different perspectives and sources. According to the clusters, the inte­
gration of neuroscience with business and management research limits
itself to behavioural studies on cognition relying on psychology or past
management knowledge (Cluster I), adapts neuroscience as a method to
(predominately) grasp consumers' behaviour (Clusters II and V) or tries
to establish a new sub-discipline of management research through
reaching for neuroscience sources (Cluster III). Table 2 displays the
research categories of all publications per cluster.
As shown in Table 2, the clusters are to various degrees dominated by
business and management publications, that is, a within-discipline
referencing (see the marked column in Table 2a and as further broken
down in Table 2b). Cluster I represents a traditional take on cognition
that has been internalised into business and management research,
while Clusters II, IV and V continuously reference and integrate with
neuroscience. In addition to referencing business and management
literature or (recent or past) neuroscience sources, the clusters vary in
their level of engagement with the neural aspects of the brain, including
how it is made up of neurons, circuits, and systems (cf. Bassett & Sporns,
Five most cited references in cluster
Kahneman (2011), Tversky and Kahneman (1974), Kahneman and
Tversky (1979), Dane and Pratt (2007), Evans (2008)
Ariely and Berns (2010), McClure et al. (2004), Knutson, Rick, Wimmer,
Prelec, and Loewenstein (2007), Plassmann et al. (2015), Lee, Broderick,
and Chamberlain (2007)
Becker, Cropanzano, and Sanfey (2011), Waldman et al. (2011a), Senior,
Lee, and Butler (2010), Damasio (2000), Lee, Senior, and Butler (2012)
Lieberman (2007), Camerer et al. (2005), Poldrack (2006), Sanfey,
Rilling, Aronson, Nystrom, and Cohen (2003), Dimoka et al. (2011),
Dimoka (2010)
Podsakoff, MacKenzie, Lee, and Podsakoff (2003), Nisbett and Wilson
(1977), Fornell and Larcker (1981), Zajonc (1980), Keller (1993)
C. Öberg Industrial Marketing Management 113 (2023) 168–179

Table 2
a. Clusters with co-cited references, per discipline. b. Specification of business and management references

*Information systems and economics are separate categories in Web of Science but were included in the business and man­
agement reference for the sake of simplicity.
**Marketing includes one business-to-business reference (Hodgkinson & Healey, 2014) and two service marketing references
(Boshoff, 2012; Fugate, 2008). The rest are research on brands and advertising in consumer settings. The separation of consumer
research (next column) is to reflect whether the firm or consumer perspective was taken in the research.

2017; Damasio & Carvalho, 2013; Ralph et al., 2017). For instance, the
cognition cluster (Cluster I) heavily relies on the understanding of be­
haviours while leaving the physiological aspects of the brain as a ‘black
box’. In contrast, Cluster III denotes a deliberate strategy of creating
organisational neuroscience as a separate sub-discipline in management
research and includes physiological aspects of the brain while orienting
to cognition. Fig. 5 plots the five clusters along two dimensions of
within-discipline and interdisciplinary publications (based on Table 2)
and the take on neuroscience as connecting primarily with cognition/
behaviour or diving into the brain processes following from the content
coding.
Fig. 5 thereby reveals differences among the clusters based on
research foci and integration strategy with neuroscience. As shown in
the figure, the upper-right quadrant is notably underrepresented.
Interdisciplinary research has not yet delved into incorporating ‘into-
the-brain’ neuroscience within a business context, while directly
drawing from neuroscience sources. This is somewhat surprising, spe­ Fig. 5. Clusters, categorised by ways of bridging and contents.
cifically for those studies dealing with brain processes (Cluster III). Notes: Vertical axis (based on comparison of columns in Table 2) = business
Furthermore, the figure shows that when discussing the potential of and management and other disciplines. ‘Within discipline’ means that refer­
ences are found in the broad business and management discipline; ‘Interdisci­
neuroscience for various social science disciplines (Cluster IV, Camerer,
plinary references’ that references are found in neuroscience. Horizontal axis
Loewenstein, & Prelec, 2005; Dimoka et al., 2011) neuroscience refer­
(based on the content coding of the individual publications) = behavioural or
ences are included. This is also the case for recent interest in method­ physical neuroscience. The figure was drawn manually and shows how the
ology (Cluster II) while, interestingly, these clusters build on the habit of various clusters differ, not only in terms of content but also in how they relate
past social science studies by thinking about the potential to grasp to past research.
cognition rather than diving into the brain functions (Petersen & Posner,

174
C. Öberg
2012; Posner & Petersen, 1990).
When following the various clusters' advances related to neurosci­
ence in terms of years of publication, a movement is suggested from
discussing the potential and indeed integrating with neuroscience
sources (Cluster IV predominately) to developing research with refer­
ences disconnecting from neuroscience, as with Cluster III. Meanwhile,
there is no coherent bridging between business and management
research and neuroscience but rather various interpretations, interests,
and means of bridging are divided among the clusters.
5. Analytical discussion
The reviews and co-citation analyses suggest that business and
management research has demonstrated an interest in neuroscience,
while business-to-business marketing research has not yet done so
extensively The search for neuroscience in combination with business-
to-business marketing revealed only nine studies focused on discrete
exchanges (cf. Cluster II), rather than decision-making or complex,
repeated exchanges and value offerings. Therefore, there is a potential to
expand such knowledge by incorporating insights from neuroscience.
However, the integration of neuroscience into business-to business
marketing research should not be pursued solely because of the limited
research to date bridging the two disciplines, but rather because of the
need and potential for doing so. Past research, as highlighted by the
business and management–neuroscience literature review and co-
citation analysis, demonstrates the potential for neuroscience as a
research methodology and discipline for social-natural science inter­
disciplinary research. Recent developments in neuroscience and prac­
tices advancing knowledge related to deep learning, artificial
intelligence, experience and social behaviour (Hoehl, Fairhurst, &
Schirmer, 2021; Lindsay, 2021; Lockwood & Klein-Flugge, 2021; Saxe
et al., 2021), provide opportunities for business-to-business marketing
research to not only address and answer the ‘how’ questions of (social
and human-machine) behaviours, decision-making, and interactions but
also the ‘why’ questions.
Specifically, neuroscience has the potential to advance business-to-
business marketing in areas such as digitalisation, artificial intelli­
gence, multi-agent systems, and future thinking (Djalovski et al., 2021;
Fukui et al., 2006; Harlé & Sanfey, 2012; Knutson & Genevsky, 2018;
Öberg, Geissinger, & Nykvist, 2021) Ideally, this research combines
cognitive or neural understandings with business-to-business market­
ing's accumulated knowledge of complex contextual matters, value
creation and the formation of repeated exchanges to solve issues across
company borders. Social or organisational neuroscience (McMullen,
Wood, & Palich, 2014) can help us better understand multi-agent sys­
tems, where business-to-business marketing adds inter-organisational
perspectives. Viable research opportunities related to physiological
brain activities include explaining managers' forecasting and predictive
processing/coding (the active handling of the future as different from
the past) and establishing alternative logics in the marketplace (such as
sustainability rather than profitability) (Geissinger, Laurell, Möhlmann,
& Öberg, 2019). This involves cognition beyond present practices in
research on values and repeated exchanges. The list of possible subject
areas is endless, but the point is that there are multiple opportunities to
integrate insights from neuroscience beyond business-to-business mar­
keting's current and limited bridging with neuroscience related to
discrete exchanges.
How, then, should business-to-business marketing and neuroscience
research be integrated? The cluster analysis indicates that business and
management research is not coherent in its bridging with neuroscience.
Fig. 5 outlines two main approaches to bridging with neuroscience
research (vertical axis): basing future research on within-discipline
research (an internalised approach) or continuously integrating with
neuroscience (a continuous integration approach). The approach of
progressively sourcing ideas from other disciplines while developing a
within-discipline understanding and subsequently disconnecting from
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Industrial Marketing Management 113 (2023) 168–179
the sourcing discipline has the advantage of allowing for within-
discipline knowledge accumulation that builds on past developments.
In contrast, continuous integration with a different research discipline
means keeping up to date with developments in the ‘sourcing’ discipline
(here: neuroscience), albeit at the risk of not reaching coherency and
momentum in the ‘receiving’ discipline (business-to-business market­
ing). If the sourcing discipline's knowledge, like neuroscience, develops
quickly, there is a risk with the internalised approach, as it not captures
such developments, with the danger of increasingly diverging from the
sourcing discipline and, worst case, being based on irrelevant or even
incorrect knowledge. For business-to-business marketing, at least
initially, continuous interdisciplinary integration is preferred, poten­
tially moving to a dual approach of combining within-discipline de­
velopments with close tracking of neuroscience research further ahead.
6. A research agenda
As the clusters indicate, past interdisciplinary research has either
used neuroscience as a method for capturing and analysing data or has
integrated research developments with it. Therefore, it is appropriate to
divide the suggestions for integrating neuroscience and business-to-
business marketing research into (1) research integration and (2)
methodological enhancements. Regarding the former, the research
agenda discusses continuous integration or internalisation as means to
bridge disciplines, and whether neuroscience should only be seen as a
sourcing discipline or what business-to-business marketing can teach
neuroscience.
6.1. Neuroscience as a study field for interdisciplinary research
In this paper, the argument for integrating neuroscience and
business-to-business marketing is linked to challenges arising from
digitalisation, artificial intelligence, multi-agent systems and uncertain
futures. These challenges emphasise the importance of social cognition
and decision-making beyond the organisation, with unclear hierarchies
among parties potentially driven by diverse goals. Additionally, they
highlight human-machine interactions and smart systems for planning,
affecting known ways of interacting among organisations and machines
that mimic the human brain, thereby linking to physiological studies of
the brain in neuroscience. Knowledge of brain functions in relation to
prediction (Clark, 2016) can inform business-to-business marketing
research on decision-making and how to deal with complex changes in
an uncertain future.
By connecting business-to-business marketing topics with the iden­
tified clusters, their orientations to neuroscience and their integration
strategies (see Fig. 5), a non-exhaustive research agenda for the inte­
gration of business-to-business marketing and neuroscience is proposed.
• Social or organisational neuroscience in multi-agent systems. Social
neuroscience is part of Cluster III, dealing with leadership (Wald­
man, Balthazard, & Peterson, 2011b). It proposes a link between
neural systems and social experiences. Organisational neuroscience,
in turn, relates these processes to organisational settings and be­
haviours (Beugre & Beugre, 2018). Social (or organisational)
neuroscience, as an emerging discipline (cf. Ibáñez et al., 2017), has
great potential to capture decision-making on inter-organisational
bases in business-to-business marketing. Research on platforms,
non-professional actors, ecosystems, communities and crowds as
emerging ways of organising among firms (or self-employed in­
dividuals) benefits from integrating neuroscience to explain such
social decision-making. Social neuroscience helps provide answers
through quantitative electroencephalogram (EEG) to measure brain
activity and capture individuals' attention in organised multi-agent
systems. It helps to explain and theorise multi-agent system activ­
ities where firms may represent diverging agendas and goals,
including conflicting sustainability and profitability goals, and why
C. Öberg
multi-agent systems may fail. While past business-to-business mar­
keting research has brought attention to conflicts, their processes and
resolutions, it has not managed to naturalistically explain why con­
flicts and consensus emerge, why and how decisions are made and
can be improved, and the interplay between rationales and emotions
as micro-level processing in managers' interactions with others.
Looking here at how organisational neuroscience is developing into a
sub-discipline of management research (e.g., Waldman et al., 2019),
the integration of neuroscience and business-to-business research
ideally builds on both the neuroscience research and the emerging
development of social and organisational neuroscience. Cluster III as
the core for the latter demonstrates ways to integrate the social sci­
ences with brain processes.
• Digitalisation and artificial intelligence. The increasingly digitised
marketplace, smart solutions, algorithmic coordination of exchanges
(such as in the sharing economy) and artificial intelligence's ability
to mimic the human brain raise new questions for business-to-
business marketing. These questions concern trust, as evidenced by
the work of Dimoka (2010) and Zak (2017) (cf. Cluster IV) who have
used neuroscience to shed light on trust in digitally intermediated
exchanges. Beyond their research, questions remain about trust in
human-machine and potentially, machine-machine interactions.
How can managers work with machines' mimicking behaviour to
establish trust, and why would a customer trust a machine? Would
transparency replace trust, and what are the neural reactions? The­
orising about deep learning, the metaverse as a parallel business
scene, the need for human representation, and the limitations and
interactions between human and machine ‘brains’ are suggestions
that incorporate current knowledge on interactional commitment
and trust into settings where the borders between human and ma­
chine ‘minds’ are explained. In line with Cluster IV, which addresses
questions related to interdisciplinary research, digitalisation and
artificial intelligence practices in business-to-business marketing
should deal with within-brain research to understand mimicking,
while acknowledging the more behavioural aspect of human inter­
action with machines and trust.
• Predictive futures: Theories that have evolved from neuroscience
related to Cluster I, particularly beyond its current bridging with
business and management studies, help us understand how managers
comprehend uncertainty or disruptive or transformative futures. As
this paper is being written, the world is being shaken by crises – the
Ukraine war, an earthquake in Turkey, and another financial crisis –
that we did not even think could happen just over a year ago. With
financial crises occurring repeatedly, why do they still come as sur­
prises? Here, neuroscience can help us understand why our brains
are caught in past ways of thinking (Clark, 2013) and why firms plan
for a future based on past trends. Additionally, for business-to-
business marketing, it is interesting to study how such notions are
reinforced by interaction partners and how artificial intelligence
reinforces such a view. Importantly, and ideally researched as action
research in business-to-business marketing, neuroscience provides
solutions. Predictive coding describes the brain's activation of a
future different from the past (cf. Monk, Dalton, & Maguire, 2021).
By integrating such ideas with, for instance, network pictures
(Öberg, 2022), theorising is enabled that combines ideas from the
work of Weick and others with business-to-business marketing and
neuroscience. Past research has described the contextual embedding
of organisations, but not theorised about faulty understandings of the
context, why managers fall into traps of disinformation, and how
convenience comes into play in planning, prediction, and decisions.
Similarly, while recent business-to-business marketing research has
discussed visioning, it has not managed to explain why managers set
specific expectations. Predictive coding indicates how business-to-
business marketing researchers need to go beyond identified ways
of bridging neuroscience with business and management research.
This focuses on new interdisciplinary integrations related to within-
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Industrial Marketing Management 113 (2023) 168–179
brain neuroscience, as demonstrated by the empty upper-right
quadrant in Fig. 5.
6.2. Neuroscience as a methodology
Based on the co-citation analysis, neuroscience is linked to meth­
odological advances related to eye tracking (Cluster II), neuroimaging
(Cluster IV), and a general discussion on neuro-methods in Cluster III
(Ariely & Berns, 2010; Czeszumski et al., 2020; Waldman et al., 2019).
What these three clusters have in common is that they partly connect
with studies into the brain. However, they are related to discrete ex­
changes or intra-firm processes. By integrating neuroscience as a method
with artificial intelligence, methodological advances can be made that
focus on digital twins and alternative (metaverse) realities. Artificial
intelligence can be used to model complex interactions, test human-
machine interactions, and provide insights related to the cognition
and behaviours of managers, marketers and customers. Neuroscience as
a method also helps extend current knowledge of human-machine and
machine-machine interactions. Less drastically, and connected with
social and organisational neuroscience, EEG can provide insights into
interactions in business-to-business marketing settings. Conducting ex­
periments in real-life settings and measuring neural cognition related to
multi-agent systems, digitalisation, artificial intelligence, and uncertain
futures are fruitful ways forward. Metaverse and digital twins can be
used in the future to experiment with exchanges, new business models,
and offerings, with researchers either using these ‘spaces’ for data
capturing or studying how firms start using them.
As neuroscience continues to develop, it will do so in tandem with
new research methods to capture issues at the heart of brain science and
social cognition processes. To advance business-to-business marketing
research, it is important not only to adopt methods developed in
neuroscience, but also to critically assess them (Ashkanasy, Becker, &
Waldman, 2014) and their use in the social sciences. The clusters
identified in this paper indicate methodological advances in data
capturing and analysis, areas where business-to-business marketing can
add aspects beyond discrete exchanges. Such methodological advances
also mean that a continuous integration with neuroscience is required,
balanced by the accumulation of knowledge from business-to-business-
marketing research.
7. Conclusions
This paper discusses the potential for integrating neuroscience with
business-to-business marketing research, raising the question: How can
neuroscience be integrated with business-to-business marketing
research? The literature review and co-citation analysis on business and
management research and neuroscience, as a means to in a forward-
oriented manner inspire an integration between neuroscience and
business-to-business marketing, pointed at a variety of themes,
cognitive/brain-related adaptations and ways to bridge across disci­
plines. The literature review indicated research on cognitive science and
psychology related to consumers and managers as well as social con­
sumption and networks as emerging areas, prediction connected with an
unforeseeable future for managers and entrepreneurs, and method ad­
vances to grasp brain processing. The co-citation analysis highlighted
the internalisation of cognition studies, the creation of an organisational
neuroscience sub-discipline related to brain tracking, the ongoing inte­
gration of neuroscience related to neuromarketing and methodological
advances, and an ongoing discussion on how to integrate neuroscience
with other related disciplines. The paper proposes a continuous inte­
gration with neuroscience to establish how it relates to business-to-
business marketing – where the paper specifically points out potentials
related to social or organisational neuroscience in multi-agent systems,
digitalisation and artificial intelligence, and predictive futures –, and to
leverage methodological advances. To over time build on the accumu­
lation of knowledge, the paper suggests dual approaches where
C. Öberg Industrial Marketing Management 113 (2023) 168–179

researchers continue to follow neuroscience research while building on
accumulated knowledge from past integrations within the business-to-
business marketing discipline.
7.1. Limitations
This study is not without its limitations. In particular, the protocols
used (Tranfield et al., 2003) to capture relevant publications for litera­
ture reviews and co-citation analyses, are subject to potential biases. The
use of alternative search terms, and the focus on capturing research in
broader disciplines as inspiration rather than with a review as the core
ambition, may also present limitations. To ensure transparency, all
search results are provided, and the co-citation analyses and literature
reviews are conducted systematically and structured to minimise biases.
However, the transfer of ideas and discussion related to the business-to-
business marketing research remains interpretative and would benefit
from further development and practical implementation of suggested
opportunities.
The multidisciplinary nature of neuroscience also presents chal­
lenges for integrating it with business-to-business marketing research.
Integration requires identifying not only which parts of the rapidly
developing neuroscience discipline to integrate, but also how well those
parts fit with different parts of business-to-business marketing research.
The respective disciplines, sub-disciplines, or research communities may
have partly diverging ontologies and address issues with normative or
descriptive ideals. However, with the increasingly complex business
landscape and the growing prevalence of firms as part of multi-agent
systems and beyond-human interactions, neuroscience can help
address several ‘why’ questions in business-to-business marketing.
7.2. Theoretical contributions
citation analysis contributes to neuroscience and business and man­
agement research in two main ways. Firstly, it identifies various ways of
bridging these two disciplines. Second, together with the review, it
captures central themes in the research and how they are dispersed
across sub-disciplines and practices of working with neuroscience. The
research agenda constitutes a forward-looking contribution to business-
to-business marketing. It argues that research should address the ‘why’
questions and actively seek out methodological opportunities related to
neuroscience and hopes to have inspired interdisciplinary research be­
tween neuroscience and business-to-business marketing.
7.3. Practical implications
Since this paper is based on literature reviews and co-citation ana­
lyses, it primarily focuses on research issues. However, some practical
insights can still be drawn. One significant insight is how neuroscience
could help managers and organisations understand how and why de­
cisions are made. This is evident in the reflection on predictive coding
and how the brain works concerning change (cf. Öberg et al., 2021).
Neuroscience can teach managers about trust, decision-making, future-
thinking, artificial intelligence, and alternative realities. Research
findings based on an integration of business-to-business marketing and
neuroscience would, therefore, assist future managers, while neurosci­
ence already provides insights that can help managers deal with ‘why’
questions and human-machine interactions.
Data availability
File with data for the review and co-citation analysis is supplied as
excel-file

For theory, this paper presents opportunities to enhance our Acknowledgements

knowledge of business-to-business marketing. As such, it inspires further
interdisciplinary research. The paper's approach to how disciplines can
be integrated not only systemises interdisciplinary research in a new
way, but also serves potential inspiration and basis for a critical dis­
cussions on how research can be bridged between disciplines. The co-
The author would like to thank Familjen Knut och Ragnvi Jacobssons
stiftelse for financial support to this study. She also would like to thank
the Special Issue Editors and anonymous Reviewers for constructive and
helpful comments during the revision process of the manuscript.

Appendix A
Literature search steps, based on Tranfield, Denyer and Smart (2003).

Step Categories Motivation Results

1. Identification of the need
for the review
2 Preparation of a proposal
for the review
3 Development of a review
protocol
4 Identification of the
research
5 Study quality assessment
6 Data extraction and
monitoring progress
An emerging trend of studies adopting new methodologies in consumer
marketing and management studies. The expansion of the field of neuroscience
and the call for interdisciplinary studies on business-to-business marketing.
Iterative searches to ensure the lack of extensive past research relating to Nine articles on neuroscience in business-to-business
neuroscience in business-to-business marketing marketing
The initial review resulting in only nine articles in business-to-business marketing
and these indicating a quite fragmented view, which resulted in the decision to
expand the review to business and management studies
Searches for synonyms and overlapping concepts Search link: neuroscience OR ‘cognitive science’ OR
‘cognitive psychology’ OR ‘neurology’ OR
‘neuropsychology’
1) Combined with ‘business-to-business marketing’ OR
‘B2B marketing’ OR ‘industrial marketing’ OR ‘business
marketing’
2) Types: articles or reviews in Categories: Business and
Management
Search in Web of Science based on protocols 674 articles and reviews
Review of nine business-to-business marketing articles from Search 1
Review of 52 review articles from Search 2
Content and field analysis of the 674 articles 41,922 publications
Download of the 674 articles and their references
(continued on next page)

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C. Öberg Industrial Marketing Management 113 (2023) 168–179

(continued )
Step Categories Motivation Results

7 Data synthesis
8 The report and
recommendation
9 Putting evidence into
practice
Cluster analysis of the 41,922 publications 830 co-cited references with at least 5 articles from the 674
referring to two of the same publications
Five clusters produced from the 830 co-cited publications
Qualitative analysis of clusters, their relation to neuroscience and
interdisciplinary research
Discussing findings in the light of business-to-business marketing
Research agenda and reporting of findings

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 Asia Pacific Management Review 28 (2023) 567e583

H O S T E D BY Contents lists available at ScienceDirect

Asia Pacific Management Review

journal homepage: www.elsevier.com/locate/apmrv

Ethics and marketing responsibility: A bibliometric analysis and literature review

Manoj Kumar Kamila*, Sahil Singh Jasrotia
Jaipuria Institute of Management, Indore, Madhya Pradesh, India

a r t i c l e i n f o a b s t r a c t

Article history: The study of Ethics and Marketing Responsibility focuses on ethics' role in shaping marketing practices
Received 23 September 2022 within organizations. It examines the impact of ethical considerations on marketing strategies and
Received in revised form evaluates the effectiveness of responsible marketing in fostering trust and loyalty among consumers. The
9 February 2023
study aims to identify the ethical challenges for responsible marketing practices. A bibliometric study on
Accepted 5 April 2023
Ethics and Marketing Responsibility is essential as it provides valuable insights into the trends and
Available online 20 April 2023
developments in the field of ethics and marketing responsibility. Such a study helps us understand this
subject's significance in the current academic and business landscape. This bibliometric study with a
Keywords:
Ethics
literature review emphasizes balancing business objectives with ethical principles and highlights the
Marketing responsibility benefits of promoting responsible marketing initiatives within modern organizations. In the 21st cen-
Social marketing tury, ethical concerns related to ‘relationship marketing,’ ‘social marketing,’ ‘sustainable marketing,’
Scopus ‘cause-related marketing,’ and ‘marketing strategy’ arise as a warning to the globe. The results also
Bibliometric support the trend for this emerging concept. Analyzing the patterns in the publication and citation data
provides a comprehensive overview of the research trends and hotspots in the field. The study implies
that academicians and researchers should pay greater attention to the rapidly developing world to fulfill
the organizations' service and marketing promises. This focus should promote business development and
trust among all the stakeholders.
© 2023 The Authors. Published by Elsevier B.V. on behalf of College of Management, National Cheng Kung
University. This is an open access article under the CC BY license (http://creativecommons.org/licenses/
by/4.0/).

1. Introduction
Ethics and Marketing Responsibility are increasingly essential
topics in business as companies strive to balance their commercial
goals with their moral and social obligations. The impact of un-
ethical marketing practices has been well documented in several
high-profile cases, which have raised awareness of the need for
companies to take a more responsible approach to their marketing
activities (Athwal et al., 2019; Fan, 2005; Goworek, 2011). For
example, the deceptive marketing tactics used by tobacco com-
panies for decades to promote smoking have had devastating
health consequences for millions of people (Hoek, 2015). In recent
years, tech companies have come under fire for failing to protect
users' data and spreading misinformation through their platforms
(Jing & Murugesan, 2019; Marsden et al., 2020). Meanwhile, the
* Corresponding author.
E-mail addresses: manoj.kamilaa@gmail.com (M.K. Kamila), sahiljasrotia93@
gmail.com (S.S. Jasrotia).
Peer review under responsibility of College of Management, National Cheng
Kung University.
fast-fashion industry has been criticized for damaging the envi-
ronment and its poor working conditions in manufacturing coun-
tries (Binet et al., 2019; Niinim€ aki et al., 2020). These cases
demonstrate the need for companies to take a proactive approach
to ethics and marketing responsibility and consider their actions'
long-term consequences. By incorporating ethics and marketing
responsibility into their strategies, companies can avoid negative
publicity and build a more sustainable and trusted brand. This
literature explores the importance of ethics and marketing re-
sponsibility and provides guidance for companies looking to create
more responsible and effective marketing campaigns.
Fundamentally, ethics is a tool that assists people in thinking
critically and independently to make thoughtful moral decisions.
The study of moral behavior in marketing is known as “Ethical
Marketing” (Kristjansson, 2021; Nyamekye et al., 2022; Tokarski,
2009; Vitolla et al., 2021). The discipline of marketing ethics is
embedded within a broader context that starts with applied ethics
and includes engineering, law, and medicine (Costantini & Romano,
2022; Kim, 2022). The marketing domain is under the umbrella of
applied ethics and addresses issues related to business manage-
ment, i.e. finance, accounting, human resources, analytics and

https://doi.org/10.1016/j.apmrv.2023.04.002
1029-3132/© 2023 The Authors. Published by Elsevier B.V. on behalf of College of Management, National Cheng Kung University. This is an open access article under the CC BY
license (http://creativecommons.org/licenses/by/4.0/).
M.K. Kamila and S.S. Jasrotia
many more (Laczniak & Shultz, 2021). Several researchers tradi-
tionally dealt with ethical challenges in marketing, such as selling,
promoting, and product safety (Hermann, 2022; Martínez et al.,
2021). However, in this article, the exclusive focus is on market-
ing ethics and the difficulties that scholars and practitioners of the
field encounter in the future. Based on the fact that a search for a
text expressly focusing on marketing ethics will most likely yield
publications from the last decade, it may appear logical to conclude
that marketing ethics is a new, emerging field of interest (e.g.
Laczniak & Murphy, 1991; Smith & Quelch, 1993; Sto € ttinger &
€
Schlegelmilch, 1998; Whysall, 2000; Schlegelmilch & Oberseder,
2010; Laczniak & Murphy, 2019; Nadeem & Al-Imamy, 2020;
Carrington et al., 2021; Fernandes et al., 2022). By the late 1970s,
there was evidence of growing concern about various facets of
marketing ethics, including marketing research (Akaah, 1990;
Elbanna et al., 2020; Ho et al., 2012; Khan et al., 2020), as well as in
connection to newly emerging issues of concern, like corporate
social responsibility (Christofi et al., 2021; Gross & Verma, 1977;
Kolk, 2016; Li et al., 2020) and social marketing (Appel et al., 2020;
Chen & Lin, 2019; Laczniak et al., 1979). At this time, efforts were
also made to empirically assess marketers' ethical behavioral pat-
terns and attitudes (Casali & Perano, 2021).
Although the claims made above that interest in marketing
ethics has a long history, there is a compelling case that interest in
this field is significantly higher today than ever. Several arguments
may be made in order to explain this. First, a broader backdrop of a
growing concern for business ethics, in general, can be used to
frame a discussion of marketing ethics. Second, there have been
specific defenses to the marketing environment in recent years.
However, there are implicit aspects of marketing activities that
raise ethical questions. Numerous purported ethical concerns in
marketing management are described in the literature (Gaspar
et al., 2022). For instance, unclear questions about whether the
desired outcome for society is consistent with the ethical standards
and values that the business organization upholds and demands.
Additionally, the impact that the marketers' character and moral
compass have on the ethical standards and principles that the firm
adopts at a particular time may give rise to ethical challenges. There
are several other research gaps found in the field of ethics and
marketing responsibility, e.g. Integration of Ethics into Marketing
Strategy (Melewar et al., 2017), Consumer Perception of Ethical
Marketing (Arli et al., 2018), Measuring the Effectiveness of Ethical
Marketing (Behera et al., 2022) and Cross-Cultural Differences in
Ethical Marketing (Tunçel, 2022). These research gaps highlight the
need for further exploration and investigation into the field of
ethics and marketing responsibility to better understand the
complex relationships between these concepts. This bibliometric
evaluation identifies the key scientific creation trends in the study
under investigation. Furthermore, it enables scholars to provide
insights about the organization of the area, as well as its social
networks and topic interests (Donthu et al., 2021). When the re-
searchers' purpose is to review a specific line of study, the infor-
mation known as “science mapping,” which includes information
on the structure and dynamics of scientific domains, is crucial.
According to Mukherjee et al. (2021), the primary benefit of using
bibliometric approaches is that they provide a quantitative level of
rigor into the previously subjective process of evaluating literature.
This study contributes to knowledge expansion by presenting the
analyses above and conclusions, focusing on research challenges
and proposing ideas for future academic investigations. A company
is believed to acquire a specific set of values at its inception. These
particular values, such as how to manage stakeholder relationships,
are influenced by the business concept, the product, the organi-
zation's corporate structure, and other elements, but the values of
the company are primarily determined by the founder, who is the
568
Asia Pacific Management Review 28 (2023) 567e583
businessman himself (Rovelli et al., 2021; Tokarski, 2009; Vallaster
et al., 2019). What do sincere supporters mean when they call for
marketing to behave socially responsibly to generalize beyond the
organizational interests? Marketers should act in the right way
from a social viewpoint, that is, in the best interests of society or to
serve the public interest or common good; this will bring value to
the business (Kamila & Jasrotia, 2023). Based on almost 50 years of
primarily normative testimony in the literature, including the
publications described in this study (also, e.g., Lavidge, 1970;
Karpatkin, 1999; Laczniak & Shultz, 2021; Ferrell & Ferrell, 2022;
Kamila & Jasrotia, 2023).
Therefore, all that marketing can ask is to serve the social in-
terest rather than acting in the greater society's best interest.
Marketers may only attempt to serve the social or public interest as
they perceive it, assess it, or decide it subjectively because it ap-
pears that businesses cannot access a ready system through which
society transmits unambiguous moral principles (Michaelson,
2021; Rattanani, 2022, pp. 381e392). This is a truth-seeking chal-
lenge since it implies handing over a portion of the function of
public choice to unelected, unqualified officials known as market-
ing managers. So-called “socially responsible” marketing intrinsi-
cally depends on the marketer making a public welfare decision,
and any subsequent behavior actualizes a unilateral, fat-type policy
created privately. It is, therefore, the undemocratic construction by
corporate leaders of a degree of socioeconomic tyranny; this is the
dictatorial variety known as oligarchy or even the economic
meaning of fascism. Delegating some public policy decisions to
private interests (i.e., the right to decide what is best for society)
establishes a level of socioeconomic dictatorship (Christensen,
2018; Kamila & Jasrotia, 2023; Raj et al., 2022). Oligarchy and
fascism are both economic forms of authoritarianism. Any volun-
tary act of perceived social responsibility by the organization is
obligatory to fulfill the stakeholder's interest, even if the latter
overtone is accidental (Cragg, 2002; Hsieh, 2007).
Previous research has gathered several hypotheses and in-
vestigations better to understand the relationship between mar-
keting management and ethics. The subject's intricacy has resulted
in a broad range of uncoordinated outcomes. Although various
research streams have been established, the complexity of the field
suggests that a more comprehensive knowledge of how marketing
in business management affects ethics has yet to be offered. Away
from its institutional, social, political, and cultural macro-context,
ethical entrepreneurship is sometimes seen as abstract and de-
contextualized. This may help to partially explain why, at least for
now, research on the nascent intersection of the two domains is still
in its infancy (Harris et al., 2009; Mun ~ oz & Cohen, 2018; Vallaster
et al., 2019; Williams et al., 2021). Ultimately, the relationship be-
tween marketing and ethics is multilevel. Marketing responsibility
research can be advanced by paying more attention to the appro-
priate context and the cross-level mechanisms that connect ethical
marketing responsibility and context.
Combining a bibliometric analysis with a literature review, this
article aims to provide an overview of the past, present, and future
research orientations on ethics and marketing responsibility. While
earlier studies (such as Whysall, 2000; Murphy, 2002 p:165-185;
Nill & Schibrowsky, 2007; Schlegelmilch & Oberseder, € 2010;
Smith & Murphy, 2012; Tsalikis & Fritzsche, 2013; Javalgi & Russell,
2018; Gaughan & Javalgi, 2018; Kadic-Maglajlic et al., 2019;
Chatterjee et al., 2021) have attempted to analyze this intersection
by literature studies alone, this study uses the bibliometric analysis
to disclose statistical patterns and provides an informative over-
view of critical topical perspectives within the field related to ethics
and marketing responsibility. Given this context, this study aims to
analyze, evaluate, and critically synthesize the present state of
research on the joint internationalization of marketing
M.K. Kamila and S.S. Jasrotia
responsibility. This is done to find gaps in existing research and
establish potential future study subjects. To begin mapping the
topic of collaborative internationalization in responsible marketing,
the researchers first analyzed and categorized the most recent
studies into many distinct but connected subject areas. Second, this
study integrates the latter to create a comprehensive framework
that explains the essential antecedents, mediators, moderators, and
outcomes and their interrelationships. This is accomplished
through the use of a cluster-based method.
Extensive research using various current publications is neces-
sary to examine the rising relevance of addressing ethical problems
when developing a marketing strategy. According to the re-
searchers, there is a need for more study in this sector. As a result, a
bibliometric study is necessary to thoroughly examine the multi-
faceted realities of marketing responsibility from its beginning to
the current day. Because there has yet to be any previous biblio-
metric research on marketing responsibility, this study will pave
the way for future research. This study proposes some research
questions based on the contributions to this issue and the creation
of this framework to expand on how the papers in this issue
contribute. Most of these questions pertain to the general idea.
Marketing and ethical responsibility should be considered while
developing profit-oriented marketing channel plans and perfor-
mance. This study proposes considering ethics and marketing re-
sponsibility in all decisions.
The research questions are as follows.
RQ1. What are the overall research publication outputs related to
‘ethics and marketing responsibility?
RQ2. What are the refinement and Co-word analysis of ‘ethics and
marketing responsibility?’
RQ3. Which research publications are highly cited in ‘ethics and
marketing responsibility?’
RQ4. Is any relation between highly scientific production and
highly cited journal research related to ‘ethics and marketing
responsibility?’
RQ5. What are the top publication countries/regions, sources and
authors related to ‘ethics and marketing responsibility?’
This study first illustrates some background about ethics and
marketing responsibility. In the methodology part, we go for pri-
mary keywords and search results, and then the refinement of
initial results occurs. In the descriptive statistics section, we gather
some information (such as - year-wise data, journal contribution,
country-wise segregation and contribution). Then we proceed to-
ward the data analysis part. We use bibliometric analysis for the
current study. With the help of the Scopus database, biblioshiny
and VOSviewer, we target keyword statistics, citation analysis,
globally most cited documents and co-citation analysis. With the
help of the above-stated tools, a keyword cluster has been formed.
Then by analyzing the clusters, we approach a literature review to
get a clear picture of the current research that explains ‘ethics and
marketing responsibility.
Section 3 presents the bibliometric analysis, including perfor-
mance analysis and science mapping, and interprets the results.
Section 4 contains the debate, and subsequent sections reveal the
paper's conclusion, ramifications, and limits.
2. Ethics and marketing responsibility
Over the past sixty years, marketing ethics has been the subject
of extensive scholarly study. The marketing ethics literature before
roughly 1970 was regarded as primarily descriptive (Hunt & Vitell,
569
Asia Pacific Management Review 28 (2023) 567e583
1986). The current state of marketing ethics research and analysis is
still relatively strong. A five-volume collection of 90 (already pub-
lished) journal papers on marketing ethics was put together in 2012
(MacQuillin, 2022; Murphy, 2017; Smith & Murphy, 2012). The
majority of academic research generated on the topic of marketing
ethics is currently deemed “positive” and empirical. This is because
the majority of the study was conducted in the past. This sort of
analysis exposes empirical regularities and statistical patterns
across essential variables. This is a critical tactic. Academics
researching marketing and seeking to raise ethical standards need
reliable data.
Morality is the practical application of ethics since it transforms
the abstract concept of ethics into something more concrete and
helpful to society. Realistic standards of conduct and action norms
are what morality entails. In conclusion, it displays a set of societal
moral standards (Place, 2019; Yeh et al., 2020). It is evident by
discussing the terms ethics and morality that while they are linked,
their definitions only partially coincide. Literature frequently cri-
tiques the need for more accurate definitions of terms, which can
lead to misunderstandings or incorrect conclusions (Vadera &
Pathki, 2021). However, since they are frequently used inter-
changeably, the practice has shown that it can be challenging to
distinguish between ethics and morality. Making a distinction be-
tween the words is crucial from a scientific perspective since it
allows for a thorough discussion of ethics as a whole and a much
more focused explanatory approach that considers many levels and
perspectives (Blumenthal-Barby & Burroughs, 2012). Even if many
scientific discoveries have been made by concentrating on partic-
ular problems, it will be necessary to discuss how ethics and mar-
keting responsibility should be created, controlled, and assessed in
the future.
2.1. Evolution of ethics in marketing and responsibility
After more than three decades of study, the field of marketing
responsibility often faces ethical challenges that need to be
addressed for future directions. Our bibliometric analysis of the
conceptual framework of marketing ethics validates and expands
the results of earlier studies regarding the breadth of their reach
and the impartiality of their assessment. To be more precise, our
study reexamines responsible marketing ethics research. Most
existing evaluations often focus on a single area of business ethics
and use subjective and narrative methodologies to choose and
arrange the evaluated contributions. Several narrative evaluations
on ethical marketing decision-making trends have been produced
over time (e.g., marketing ethics as a course, adoption of ethics in a
corporate atmosphere, pharmaceutical challenges, and importance
of social responsibilities (Abratt & Sacks, 1989; Dunfee & Robertson,
1988; Schlegelmilch & Houston, 1989; Singhapakdi et al., 1994;
Smith & Quelch, 1991)). From 1998 to 2008, the marketing ethics
literature highlighted several new challenges as several continents
introduced industries and technological revolutions (e.g., global
business responsibility, strategic dimension of responsibility busi-
ness, consumer loyalty from responsibility, sustainable marketing,
cause-related marketing and adoption of CSR (Quazi & O'brien,
2000; Iyer, 2001; Saeed et al., 2001; Salmones et al., 2005; Daub
& Ergenzinger, 2005; Berglind & Nakata, 2005; Pirsch et al.,
2007). In recent times the globe witnessed several technological
and economic challenges in terms of business growth (e.g., corpo-
rate environment, ethical responsibility, responsible financial per-
formance, sustainable liability, ethical marketing, socially
responsible attitude, effects of CSR and buying behavior, ethics and
supply chain management, responsible tourism management and
CSR and ethical sustainability (Balmer et al., 2011; Eltantawy et al.,
2009; Fraj-Andre s et al., 2009; Gonzalez-Padron, 2016; He & Lai,
M.K. Kamila and S.S. Jasrotia
2014; Jasrotia et al., 2021; Kim, 2010; Luchs et al., 2010; Luque &
Herrero-García, 2019; Molz, 2018; Mulchandani et al., 2022; Yani-
de-Soriano et al., 2012).
3. Research methodology
A thorough analysis of a few chosen publications considerably
adds to the collection of existing material. We employ a two-step
research approach to promote a thorough understanding of the
context and multilevel links between Ethics and Marketing Re-
sponsibility. The bibliometric analysis shows the direction in which
the study field is evolving, whereas the literature review summa-
rises the current state of the literature.
The proper keyword selection is essential for literature reviews.
The process has five parts: screening, assembling, organizing,
drafting, and presenting the outcomes (Dhamija & Bag, 2020;
Kamila & Jasrotia, 2023). In the current study, a similar approach
has been taken to find various topics based on chosen keywords,
followed by a projection of future work scope concerning ethics and
marketing responsibility.
3.1. Primary keywords and search results
In the beginning, we proceeded with a random range of specific
keywords that included “corporate social responsibility,” “csr,”
“social responsibility,” “corporate responsibility,” and “corporate
ethical responsibility.” In the next step, each of these keywords is
merged with “marketing” and various groupings encompassing (1)
corporate social responsibility AND marketing, (2) CSR AND mar-
keting, (3) social responsibility AND marketing, (4) corporate re-
sponsibility AND marketing (5) corporate ethical responsibility
AND marketing. Several researchers used similar types of keywords
to fill the literature gap on marketing and ethical responsibility
(e.g., Amoako et al., 2021; Brunk & De Boer, 2020; De Madariaga &
Valor, 2007; Hansen et al., 2011; He & Harris, 2020; Luchs et al.,
2010; Schamp et al., 2019; Thompson, 2013; Van de Ven, 2008).
Marketing is a technique to increase the visibility and reputation of
the organization. This work demonstrates how this strategy has
been beneficial, particularly regarding responsible marketing
dimensions.
An organized literature assessment is conducted by choosing a
database from the list of options. Science Direct, Web of Science,
and Scopus are the most well-known online databases. We choose
the Scopus database for the current piece of work, as this is one of
the significant databases widely covering topics across the globe in
the context of social science research, and it is convenient for us to
go through (Kumar, Sureka, & Colombage, 2020; Mongeon & Paul-
Hus, 2016; Singh et al., 2020a, 2020b, 2021a, 2021b; Srivastava
et al., 2020).
The abstraction of articles from Scopus resulted in 8634 articles
for each respective combination, i.e., corporate social responsibility
AND marketing (1842 articles), CSR AND marketing (1144 articles),
social responsibility AND marketing (3325 articles), corporate re-
sponsibility AND marketing (2052 articles) corporate ethical re-
sponsibility AND marketing (271 articles). This extraction covers
published articles till August 31st, 2022. Further, we focus on fully
published and press articles, excluding book chapters and editorial
and conference articles. The total allotment of articles concerning
selected keywords is shared in Table 1. Contributing author(s),
publication year, article source, article affiliation, and abstracts of
papers are all provided for identified articles (see Table 2).
3.2. Refining of initial results
The next stage involves applying specific filters to the results of
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Asia Pacific Management Review 28 (2023) 567e583
the initial search (Subject- ‘Business, Management and Accounting,’
‘Economics, Econometrics and Finance, ‘Social Sciences,’ ‘Environ-
mental Science’ and ‘Arts and Humanities’; Document Type-
Article; Sourcee Journals; Languagee English). A figure of 4889
articles, i.e., corporate social responsibility AND marketing (1112
articles), CSR AND marketing (682 articles), social responsibility
AND marketing (1710 articles), corporate responsibility AND mar-
keting (1223 articles), corporate ethical responsibility AND mar-
keting (162 articles) is generated in CSV Excel format. The current
work focuses on Ethical Marketing Responsibility and its close
connection with other related terms. All the results have been
checked thoroughly to avoid duplicates, and the outliers have been
checked.
According to our research, the Scopus search turns up some
duplicate articles as the search criteria mix many similar-meaning
keywords. As a result, we avoid duplicate entries from the jour-
nals in the Scopus database. As suggested by Valderrama-Zuria n
et al. (2015), we added the logical operator “OR” in the Scopus
database search (Table 3). The database shows a total of 1886 ar-
ticles related to our study.
3.3. Descriptive statistics
Based on data from the Scopus database and relevant to ethical
marketing responsibility and related fields, descriptive statistics
explain the concentration of articles as yearly publication, journal-
wise publication, top countries producing scientific research, and
subject classification. The yearly publishing of works on marketing
responsibility is described in detail (refer to Fig. 1). A significant
amount of articles was contributed in 2021 (169 articles) and 2022
(158 articles as of August 31st, 2022). The data indicate that the
author(s) are interested in researching and contributing to ethical
marketing responsibility. The bibliometric criteria assess the pub-
lication output and the quality of publications. The number of
publications is counted, but an article's overall number of citations
determines its quality (Kamila & Jasrotia, 2023; Singh et al., 2020).
Citation analysis is one of the most often used methods for
obtaining quality research themes (Kumar, Sureka, & Colombage,
2020). Fig. 1 shows the citation of articles associated with a yearly
publication based on data from the Scopus database and pertinent
to ethical marketing responsibility and related disciplines. The
annual publication and citation of works on marketing re-
sponsibility are fully covered (refer to Fig. 1).
Concerning journal-wise contribution of articles, we provided a
list of the top 20 journals that have published articles based on
ethics, marketing and responsibility in the previous years, ranking
them according to journal contribution of articles (Fig. 2). The data
will significantly help researchers working on marketing re-
sponsibility and other interested parties. The Journal of Business
Ethics (JBE) has 78 articles, SUSTAINABILITY (SWITZERLAND) has
68 articles, the JOURNAL OF BUSINESS RESEARCH (JBR) has 48 ar-
ticles, the EUROPEAN JOURNAL OF MARKETING (EJM) has 36 arti-
cles, and the list goes on. These are the most contributing journals
that consider work relating to ethics and marketing responsibility
(Fig. 2).
For researcher(s) and academician(s), region or country-wise
segregation of articles gives an intriguing statistic (s). The top-
performing countries in scientific production which have made
significant contributions to ethics and marketing responsibility-
related research are listed in this section (Table 4; Fig. 3).
Countries with the most publications published are The USA
(1214), The UK (358), China (294), Australia (251), Spain (236), India
(160), Italy (138), South Korea (130), Germany (121), and so on
(Refer Fig. 3 and Table 4 Till August 31st, 2022). Due to the global
demand for research in ethics and marketing responsibility, this
M.K. Kamila and S.S. Jasrotia Asia Pacific Management Review 28 (2023) 567e583

Table 1
Primary search results.

Keywords Search results (no. of articles)

Corporate Social Responsibility AND Marketing 1842

CSRAND Marketing 1144
Social Responsibility AND Marketing 3325
Corporate Responsibility AND Marketing 2052
Corporate Ethical Responsibility AND Marketing 271
Total 8634

Source: Scopus database, Till August 31st, 2022, and authors' collection.

Table 2
Filtered results.

Keywords Search results (no. of articles)

Corporate Social Responsibility AND Marketing 1112

CSR AND Marketing 682
Social Responsibility AND Marketing 1710
Corporate Responsibility AND Marketing 1223
Corporate Ethical Responsibility AND Marketing 162
Total 4889

Source: Scopus database, Till August 31st, 2022, and author's collection.

Table 3
Search Criteria to remove duplicates.

Search Criteria Filtrations Number of Articles

Found

TITLE-ABS-KEY (corporate AND social AND responsibility AND marketing) OR TITLE-ABS-KEY (CSR AND marketing) OR TITLE-ABS-KEY (social AND 1886
responsibility AND marketing) OR TITLE-ABS-KEY (corporate AND responsibility AND marketing) OR TITLE-ABS-KEY (corporate AND ethical AND
responsibility AND marketing) AND (LIMIT-TO (SRCTYPE, “j")) AND (LIMIT-TO (DOCTYPE, “ar”)) AND (LIMIT-TO (SUBJAREA, “BUSI”) OR LIMIT-TO
(SUBJAREA, “SOCI”) OR LIMIT-TO (SUBJAREA, “ECON”) OR LIMIT-TO (SUBJAREA, “ENVI”) OR LIMIT-TO (SUBJAREA, “ARTS”)) AND (LIMIT-TO
(LANGUAGE, “English”))

Source: Scopus database, Till August 31st, 2022, and authors' collection.

Fig. 1. Annual Scientific Production and Citation progress. Source: Scopus database;
bibliometrix; biblioshiny tools, Till August 31st, 2022, and authors' collection.

analysis may be a revelation for other researchers and nations. In

addition, Table 5 shows Country wise citation demand and average
article count to reflect the increasing demand for research related
to marketing responsibility. The USA secured the top with a total
count of 24,691 citations, and the average article citation for The
USA is 61.12. Other countries are contributing to the field of mar-
keting responsibility. Fig. 2. Most Relevant Sources. Source: Scopus database; bibliometrix; biblioshiny
tools, Till August 31st, 2022, and authors' collection.

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M.K. Kamila and S.S. Jasrotia Asia Pacific Management Review 28 (2023) 567e583

Table 5
Most cited countries.

Country TC (Total Count) Average Article Citations

USA 24,691 61.12

UNITED KINGDOM 4823 38.28
AUSTRALIA 2951 32.79
SPAIN 2402 40.03
CHINA 2136 23.73
CANADA 1925 46.95
INDIA 1403 28.06
NETHERLANDS 1137 63.17
KOREA 1135 22.25
FRANCE 826 31.77

Source: Scopus database; bibliometrix; biblioshiny tools, Till August 31st, 2022, and
authors' collection.

4. Data analysis and findings

Fig. 3. Country Scientific Production. Source: Scopus database; bibliometrix; bib-
lioshiny tools, Till August 31st, 2022, and authors' collection.
4.1. Bibliometric analysis
Bibliometric analysis is possible with several available software;
we choose “biblioshiny: the shiny app for bibliometrix” as this
entails wide acceptance (Aria & Cuccurullo, 2017). It can analyze
information from Scopus, Web of Science, or any other program.
The current study aims to analyze and interpret a large amount of
data for a literature review, and biblioshiny is the best tool for this.
This software is advantageous over competing programs because it
can create files in the required format. The following subsections
will cover the author's influence, the most globally cited docu-
ments, keyword data, and the most popular search terms con-
cerning ethics and marketing responsibility.

4.1.1. Keyword statistics and most commonly searched words

One of the critical components of search engines is keywords.
The proper keyword selection is crucial for obtaining more con-
tributions. Following is a list of the top search terms where mar-
keting responsibility is the primary keyword. Top-listed keywords'
frequency of occurrence is revealed via analysis. The terms mar-
keting (246), human (117), article (115), corporate social re-
sponsibility (102), humans (87), and others have been highlighted
(Fig. 4; Fig. 5).

4.2. Network analysis

Network analysis is the central presentation of the citation

matrix for the chosen field of study, marketing responsibility.
Reviewing citation analyses makes it clear to interested parties
what work is being done and is commonly accepted by audiences.
Fig. 4. Most Frequent Words Source: Scopus database; bibliometrix; biblioshiny tools,
Till August 31st, 2022, and authors' collection. By understanding the citation patterns of the work, one can trust
the trustworthiness of the work, as indicated by citation analysis.
First, we used the Scopus database to fulfill our search criteria; next,
Table 4
we used the bibliometrix tool with the support of RGui (64-bit).
Top Countries in Scientific Production.
Results include citation analysis, co-citation analysis, cluster anal-
Region Freq ysis and co-occurrence network. The tool “biblioshiny” creates
USA 1214 fascinating node and edge visualizations. Edges display citation
UK 358 linkages, and nodes indicate published publications.
CHINA 294
AUSTRALIA 251
SPAIN 236 4.2.1. Citation analysis
INDIA 160 Citation analysis is a vital tool for scientific mapping that relies
ITALY 138 on the premise that citations indicate the intellectual linkages be-
SOUTH KOREA 130
tween publications from one article referring to another (Appio
GERMANY 121
et al., 2014). The number of citations an article receives in this
Source: Scopus database; bibliometrix; biblioshiny study determines the effect of that publication. The methodology
tools, Till August 31st, 2022, and authors' collection.
allows for identifying the most influential papers in a given study
area. The goal of citation analysis is to comprehend and evaluate
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M.K. Kamila and S.S. Jasrotia Asia Pacific Management Review 28 (2023) 567e583

the contributions made by authors to a given area of research. It

makes it easier to rate and evaluate work published in reputable
publications. Network analysis can be used to examine the fre-
quency of citations for each publication. The method, as mentioned
earlier, finds the most influential work and the level of reader
acceptance. Based on an examination of the citations from previous
years, we identified the top 10 authors in this article (Fig. 6; details
in Table 7).
With 3991 citations, Kollmuss (2002) is now in the lead. The
fundamentals of marketing responsibility are discussed, and how it
relates to environmental responsibility. With 2265, 2256, 1733, and
1081 citations, respectively, Davenport (1998), Brown (1997), Luo
(2006), and Becker-Olsen (2006) are next in Marketing Re-
sponsibility, Corporate Social Responsibility AND Marketing, CSR
AND Marketing, Social Responsibility AND Marketing, Corporate
Responsibility AND Marketing, and in Corporate Ethical Re-
sponsibility AND Marketing are among the work areas that have
been contributed (Table 6).

4.2.2. Co-citation analysis

Co-citation analysis is a slightly different subject to comprehend
and analyze. It indicates a single-step citation matrix for authors,
domains, journals, and keywords. We looked at this network to
emphasize the connection between author collaboration and the
network of co-citations between the authors. In contrast to the
cooperative network in Fig. 7, the co-citation network displays the
relationship between the cited references (Hjørland, 2013). The co-
citation network links two publications together when they appear
simultaneously in the references of another article (Singh et al.,
2021). The size of the co-citation network and the spacing be-
tween points reflect the time since the co-citation was made.
The study team chooses how co-citation analysis will be used
because it may be used with many combinations, such as authors
and domains, journals and keywords. However, every conceivable
combination has been taken into account in this paper. This co-
Fig. 6. Most Global Cited Documents. Source: Scopus database; bibliometrix; bib-
lioshiny tools, Till August 31st, 2022, and authors' collection.
citation analysis applied to journal publications which can offer
an analytical composition of a specific topic of knowledge, in this
case, marketing responsibility, to authors reveals societal and
ethical linkage or connectedness of work among writers. A robust
network analysis tool called the VOS Viewer (Valenzuela et al.,
2017; Van Eck & Waltman, 2010) was used to perform the
coupling and co-occurrence of keyword analysis to thoroughly
explore and examine the intellectual structures of the targeted

Fig. 5. Frequently used Word Tree Map. Source: Scopus database; bibliometrix; biblioshiny tools, Till August 31st, 2022, and authors' collection.

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Table 6 4.2.3. Keywords co-occurrence and cluster analysis

The keyword co-occurrence for different knowledge cluster. Data clustering is the grouping of items with similar traits. Put
Keywords Occurrence Total link strength another way; it gathers articles from the same field in a single
Cluster 1: Ethics and Relationship Marketing
location (Singh et al., 2021). In the current study, data clustering
consumer behavior 31 44 was accomplished utilizing network analysis in VOSviewer. We set
corporate image 20 25 the limit to the minimum number of occurrences of a keyword to
corporate reputation 25 33 ‘20'; the result shows that out of 4733 keywords, 28 meet the
corporate social responsibility 550 445
threshold. The arrangement of nodes and edges indicates the
customer loyalty 25 39
customer satisfaction 24 36 cluster analysis procedure. A specific cluster is represented by its
relationship marketing 23 27 densely interconnected nodes, which set it apart from other con-
Cluster 2: Ethics and Social Marketing nected nodes and clusters (Fig. 8). The VOSviewer separates the 28
advertising 52 69
items into 5 clusters, 226 links. The summary of the top 5 cluster
ethics 64 85
marketing 120 131
statistics, which include the frequency and overall link strength of
social marketing 52 55 the chosen terms, are shown in Table 6. Following that, these
social media 38 45 knowledge clusters are explored using cognition, in which the
social responsibility 151 133 keywords for each cluster are arranged logically to reveal the topics
Cluster 3: Ethics and Sustainable Marketing
of the previous studies.
CSR 120 101
environment 23 35
green marketing 57 69 4.3. Connection of keywords on ethics and marketing responsibility:
innovation 28 30 identifying certain contextual aspects
sustainability 110 123
sustainable development 33 41
Cluster 4: Ethics and Cause-Related Marketing The threshold was set at 20; thus, a term had to appear at least
cause-related marketing 94 100 20 times in article keywords to be featured in Fig. 8 and Table 6.
consumer behavior 36 49 According to the study, “corporate social responsibility” appears
corporate social responsibility (CSR) 66 37 550 times in the text, which is the most often used term. Recalling
India 20 28
that the co-occurrence of keywords measures the most popular
purchase intention 25 24
cause-related marketing 94 100 keywords and those that appear in the same articles more
consumer behavior 36 49 frequently (Kraus et al., 2020; Vallaster et al., 2019; Vuong et al.,
Cluster 5: Ethics and Marketing Strategy 2021), this visualization further suggests that the link of this term
business ethics 27 42
is significantly vital.
marketing strategy 26 37
stakeholders 23 37
business ethics 27 42 4.4. Review of the literature: relating various degrees of ethics to
marketing strategy 26 37 marketing responsibility
Source: Scopus database; bibliometrix; biblioshiny tools, Till August 31st, 2022, and
authors' collection. The ensuing literature study demonstrates the diversity of ethics
and marketing responsibility research, with the emergence of five
main clusters.
research field. With the help of VOSviewer, we created a co-citation
network among authors in this study. We limit the minimum 4.4.1. Cluster 1: Ethics and relationship marketing
number of citations of a cited reference to 20. The VOSviewer The focus of Cluster 1 is on whether or not ethical marketing
identified 98,658 cited references, of which 53 meet the threshold. responsibility exhibits different traits from relationship marketing.
Investigation of ethical beliefs and behaviors is essential

Table 7
Top 20 Publications assigned to three clusters.

Cluster Author/Authors' Year Citation

Cluster 1: Ethics and Relationship Marketing Kollmuss, A., and Agyeman, J. 2002 3991
Davenport, T. H. 1998 2265
Sen, S. 2006 889
Ellen, P$S. 2006 833
Klein, J., and Dawar, N. 2004 789
Wagner, T., Lutz, R. J., and Weitz, B. A. 2009 614
Bhattacharya, C. B., Korschun, D., and Sen, S. 2008 546
Cluster 2: Ethics and Social Marketing Simmons, C. J., and Becker-Olsen, K. L. 2006 429
Luo, X., and Bhattacharya, C. 2009 486
Cluster 3: Ethics and Sustainable Marketing Luchs, M. G., Naylor, R. W., Irwin, J. R., and Raghunathan, R. 2010 559
Vlachos, P. A., Tsamakos, A., Vrechopoulos, A. P., and Avramidis, P$K. 2008 499
Lee, K. 2008 458
Cluster 4: Ethics and Cause-Related Marketing Brown, T. J., and Dacin, P. A. 1997 2256
Luo, X., and Bhattacharya, C$B. 2006 1733
Becker-Olsen, K. L., Cudmore, B. A., and Hill, R. P. 2006 1081
Manaktola, K., and Jauhari, V. 2007 570
Nan, X., and Heo, K. 2007 495
He, H., and Harris, L. 2020 426
Cluster 5: Ethics and Marketing Strategy Walsh, G., and Beatty, S. E. 2007 511
Lantos, G. P. 2001 611

Source: Scopus database; bibliometrix; biblioshiny tools, Till August 31st, 2022, and authors' collection.

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M.K. Kamila and S.S. Jasrotia Asia Pacific Management Review 28 (2023) 567e583

Fig. 7. Co-citation network of contributing authors. Source: Scopus database; VOSviewer tools, Till August 31st, 2022, and authors' collection.

Fig. 8. Cluster combinations and their analysis. Source: Scopus database; VOSviewer tools, Till August 31st, 2022, and authors' collection.

concerning relationship marketing, which this section discusses. promote cultivating long-term business connections. Abela and
Ghauri and Cateora (2009) admit that all emerging business trends Murphy (2008) conclude that having a relationship with the

575
M.K. Kamila and S.S. Jasrotia
customer is a method that may be used to convince businesses to
resolve and minimize ethical tension as well as avoid the emer-
gence of unethical behavior (Wagner et al., 2009). In addition,
Sheth and Parvatiyar (2002) discovered that relationship marketing
constituted a significant shift in marketing strategies. It shifted the
emphasis away from an organization's market share and onto the
needs and wants of customers as customer retention and
commitment. The occurrence has shown that merging the ideas of
ethics with relationship marketing may stretch a company's moral
boundaries. Following the discussion of ethical issues, the issue of
what variables ultimately influence these decisions is brought up.
Ethical marketing practices should be an integral aspect of every
organization's marketing strategy and should be included during
the planning and operation phase (Davenport, 1998). The collabo-
ration and cooperation between the supplier and the client, which
adds meaningful value to their business relationship, give the
relationship marketing approach its distinctive quality and make it
stand out from other marketing strategies. In addition, Abela and
Murphy (2008) say that ethical marketing practices should be an
essential part of every organization's marketing plan and that these
practices should be considered during the planning process. As a
result, the customer relationship setting places a greater emphasis
on human beings than transaction-based marketing (Laczniak &
Murphy, 2006; Murphy et al., 2007; Perret & Holmlund, 2013).
The core ethical concepts such as trust, dedication, diligence, and
loyalty (Murphy et al., 2007) have been gathered as significant
components in relationship marketing (Perret & Holmlund, 2013).
Relationship marketing is distinguished from transactional and
product-based marketing because it emphasizes contacts or in-
teractions between all stakeholders (Bhattacharya et al., 2008).
Kollmuss and Agyeman (2002) examined relationship marketing
by beginning with an individual's point of view. Specifically, they
pointed out that it is possible to evaluate ‘actively caring’ produc-
tivity with the assistance of personal control and sympathy. The
operation of Corporate Social Responsibility (CSR) is an essential
factor for the ethical relationship module, which can positively
influence relationship marketing (Ellen et al., 2006; Klein & Dawar,
2004; Sen, 2006). The literature shows that marketers have a va-
riety of traits that give them the appropriate sensitivity for making
moral choices in the appropriate circumstances.
4.4.2. Cluster 2: Ethics and social marketing
In academia, the criteria ought to be formulated somewhat
otherwise. Conceptual frameworks and insights, as well as careful
research studies on all aspects of the basic practitioner approach,
are provided by academics (Rothschild, 1999). Social marketing is
ethically neutral, meaning that they are neither good nor bad;
instead, they are merely strategies that can be employed to achieve
any goal (Brownlie et al., 2009). A particular social marketing
campaign can have more or less of a positive impact, more or less of
a negative impact, can treat people with more or less respect, can
include or exclude beneficiaries in ways that are more or less, and
can operate with more or less transparency and honesty. Ethical
principles guide the definition of “social marketing” and are also
full of concepts relevant to ethics, such as benefit, social good,
effectiveness, equity, and sustainability. Professions typically
develop formal codes of ethics to provide members with greater
clarity regarding expected ethical behavior (Luo & Bhattacharya,
2009). Both procedural ethics and ethics-in-practice are required,
and there is a reciprocal relationship between the two. Guillemin
and Gillam (2004) stated that neither procedural ethics nor
ethics-in-practice alone is sufficient to ensure that researchers
participate in ethical behavior. This argument also appears to be
relevant to the practice of social marketing. In social marketing,
practitioners' ethical conundrums are discussed in several previous
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Asia Pacific Management Review 28 (2023) 567e583
studies (for example, Brenkert, 2002; Donovan & Henley, 2010).
The result shows that many are neglected in the aspect of social
marketing (Spotswood et al., 2012). The Related research focuses on
ethics in social marketing is being discussed further.
The practice of social marketing can be utilized in any circum-
stance where there is a need to address a socially problematic in-
dividual behavior for a specific group of people. This opens up a
wide range of possibilities for social marketing. It is most
commonly considered “final consumers,” such as adolescents who
smoke or moms who must have their children inoculated. How-
ever, as will be discussed further on, it is essential to be aware that a
social marketing strategy can also be used to change behavior in
other vital individuals whose cooperation is required for programs
to be effective (Simmons & Becker-Olsen, 2006). Media members,
potential partners, financiers, policymakers, legislators, and even
an organization's personnel could be considered to fall under this
category (Gordon et al., 2006). These target populations can be
influenced by using the guiding principles and overarching themes
of an effective social marketing campaign (Andreasen, 2002).
4.4.3. Cluster 3: Ethics and sustainable marketing
The traditional interpretation has been superseded with time by
the more prevalent virtuous concept in sustainable marketing,
which focuses mainly on projected economic outcomes
(Ramboarisata & Gendron, 2019). This brief assessment of the
ethical foundations of sustainable marketing has been designed to
use several principles and methodologies that can contribute to
relevant research on sustainable marketing. Sustainable marketing
is the process of organizing, carrying out, and managing the crea-
tion, assessment, pricing, promotion, and distribution of goods in a
way that gratifies the following three requirements: (1) meeting
customer needs, (2) achieving organizational objectives, and (3)
being eco-friendly (Fuller, 1999) which can contribute to the busi-
ness success for an extended period.
There has been significant criticism that marketers have been
complicit in supporting unsustainable consumption habits. This
criticism comes when economies worldwide are collapsing, and
unethical business actions are coming to light (James, 2007). In
addition, questionable environmental product claims have not
benefited the cause of protecting the environment (Cone and
Myhre, 2000). It is abundantly clear that extensive environmental
damage has been caused by continuous consumption, marketing,
manufacturing, processing, discarding, and polluting (Jasrotia et al.,
2022), which has led to the speculation that “a sustainable future is
not achievable while disregarding the key contributors to ecolog-
ical degradation e population growth and high consumptive life-
styles” (Bandura, 2007). The usefulness of marketing arises not only
from the structural conditions of the field but also from charac-
teristics that may be found within the discipline's fundamental
ideas and practices. The theoretical approach to marketing, which
predominates today, tends to mean that less attention is paid to the
effect of marketing as a social institution of significant importance
and impact. This, in turn, has unquestionably significant re-
percussions for sustainability (Luchs et al., 2010).
Marketing ethics is responsible for marketing sustainability.
Concerning matters of sustainability, customers continue to
demonstrate a lack of awareness, understanding, trust, and even, in
some circumstances, apathy (Chatzidakis et al., 2007; Szmigin et al.,
2009; Vlachos, 2008). Furthermore, most sustainability initiatives
have been implemented upstream to modify the structural condi-
tions that embed consumer behavior. These initiatives include
norms, incentives, legislation, environmental design, and techno-
logical advancement; the more ingrained the habits, the greater the
need for interventions upstream (Verplanken & Wood, 2006). First
and foremost, these have focused on technological fixes,
M.K. Kamila and S.S. Jasrotia Asia Pacific Management Review 28 (2023) 567e583

developing new technology, and encouraging industries and busi- 4.4.5. Cluster 5: Ethics and marketing strategy
nesses to become more sustainable. One example is the “choice Socially responsible marketing includes business with social
editing” strategy for white goods to eliminate energy-inefficient duty. It is “commonly understood relationships, obligations, and
household appliances and light bulbs (Lee, 2008). The researchers duties” related to the corporate impact on society. What is
call for more research on this subject, focusing on revisiting prior “commonly accepted” may vary throughout societies and over time
ethical methods with a particular focus on independent ethical within a society. Business ethics is a more organized discipline than
business practices. social responsibility; thus, it provides a solid foundation for ethical
marketing strategies.
This research has improved our understanding of marketing
4.4.4. Cluster 4: Ethics and cause-related marketing
ethics and social responsibility. Only some academic papers pro-
According to Staples (2004), customer relationship manage-
pose how marketing managers might apply their understanding of
ment (CRM) cultivates relationships between businesses and
these areas to construct an actionable approach to marketing ethics
charitable organizations. Crane (2000) makes the hypothesis that
(Laczniak & Murphy, 2019). Though necessary, only some of these
customer relationship management (CRM) is a blend of corporate
attempts integrate marketing and ethics into strategic ethical
strategy and citizenship and that it is becoming an activity that is a
marketing planning (Laczniak & Murphy, 2019). Creating and
“must-do” for the 21st century. CRM campaigns can be different
maintaining sustainable relations between supplier (company) and
depending on the type of non-profit partnerships formed and the
buyer (consumer) needs a critical assessment of ethical conduct
nature of the ties between businesses and the marketing partners
with the proper adoption of corporate social responsibility (CSR)
they use. Similarly, the partnership can take several forms
(Lantos, 2001). Companies and customers seek reputable com-
depending on the nature of the cause, the amount of territory
panies. Koul et al. (2022) contend that as customers become
covered by the cause, and the duration of the program (Brown &
familiar with a provider through repeated purchases, they rely less
Dacin, 1997; Singh & Dhir, 2019). According to Hemphill (1999),
on themselves for information and guidance, resulting in cheaper
customer relationship management (CRM) is a form of corporate
costs, and the trust factor increases over time (Walsh & Beatty,
assistance for a charitable organization that takes the form of an
2007).
expensive marketing and advertising campaign designed to raise
Corporate reputation is a strong-willed process in which a cor-
awareness not only of the firm but also of the charitable organi-
poration advertises its main features to constituents to optimize its
zation (Luo & Bhattacharya, 2006).
economic and non-economic status. Strategy research seeks a
Through their research, Barron and Yechiam (2002) show that
morally sustained competitive edge for business growth (Mahon,
customer relationship management (CRM) can have more signifi-
2002). The concept of ethical marketing strategy is based on the
cant effects than customer-centered bonuses when advertising a
premise that a favorable public opinion of an individual or orga-
product. In their research, Smith and Higgins (2000) take an un-
nization would positively affect public attitudes and behaviors
favorable stance on CRM. They believe that it provides a reason that
(Fombrun & Shanley, 1990; Lantos, 2001). An implicit assumption is
can counterbalance the guilt associated with luxury purchases and
that all stakeholders have a standard set of values (ethical conduct)
that it can add additional good connections to a purchase made
and may have comparable impressions of the organization. Most
daily. On the other hand, Andreasen (1996) posits that CRM is not
authors who have described ethical marketing strategy agree
about marketing but finding innovative ways to improve people's
collectively, as their definitions focus on a specific stakeholder
lives. Both the charitable organization and the cause benefit from
group's ability to perceive and correctly interpret “what a corpo-
the free publicity and awareness that CRM generates among the
ration stands for.” Such presumptions frequently undervalue the
public. As a direct result, it could boost the number of volunteers an
significance of a crucial group of stakeholdersdcustomers, who
organization has in the short term (Docherty & Hibbert, 2003; Nan
may view a service provider differently than other stakeholders like
& Heo, 2007). The senior employees of the companies offering
stockholders, rivals, and employees. Integrating ethical values into
managerial assistance might also aid the non-profit organization if
corporate strategy is also thought to affect an organization's image.
they choose to do so for the organization's reputation. CSR links to
The literature demonstrates that CSR helps firms gain a competitive
corporate performance through reputation. Reputations indicate
edge and differentiate themselves from competitors (Lepoutre &
organizations' performance meeting stakeholder expectations (Nan
Heene, 2006). Even though most research in this field has
& Heo, 2007). Fombrun and Shanley (1990) believe that a good
focused on CSR in reputable organizations, several authors have
reputation can help enterprises charge premium rates, access
contributed to its growth by studying the chances marketers and
capital markets, and recruit better candidates and investors. Their
businesses have to engage in these activities and behavior.
study found that a company's reputation improves with its social
contribution. The above discussion shows that marketing involves
promoting and building a company's brand. However, during the 5. Discussion
COVID-19 pandemic, marketing is tricky. Most expect ad expendi-
ture to decline in 2020, and almost all face changes in media outlets The current study evaluates the concept of ethics in marketing
and messaging. Their survey of advertisers shows that COVID-19 responsibility and associated literature. The association between
causes anxiety and uncertainty. Many business activities to boost bibliometric analysis and literature review thoroughly describes
public welfare during the crisis appear to be motivated by ethical the field's past and contemporary research and can provide a
principles rather than cost-benefit analyses. Businesses prioritize foundation for upcoming contemporary challenges. We uncovered
community well-being over short-term profits (He & Harris, 2020). an analytical format (Bibliometrix and VOSviewer), followed by
Customers and staff like this and think corporations should do ethics and marketing responsibility literature. Both clusters share
more. Firms must respond with sensitivity and intelligence if the textual patterns and subjects. Key subjects reinforce keyword
pandemic continues to spread. The contributions in this cluster analysis findings, which showed a similar tendency. However, the
frequently take a much broader approach to ethics and marketing, cluster forms show that ethics and marketing responsibility have at
considering the benefits they provide to societal advancement and least five unique dimensions of inquiry. It is crucial to comprehend
economic growth. the current state of ethics and marketing responsibility with its

577
M.K. Kamila and S.S. Jasrotia
potential reach. This study attempts to uncover the literature on
ethics and marketing responsibility followed by an analytical
format (Bibliometrix and VOSviewer).
Prolonged investigations will allow academicians and interested
parties to analyze the pros and cons of marketing responsibility.
Short-term, everything looks beneficial, but the long term has
terrible repercussions. The ethical dimension in marketing re-
sponsibility is trendy. This can affect all sectors/industries if the
organizations need to complete their proper application. Ethical
issues concerning marketing harm societies, organizations, and
individuals. If a company engages in unethical tactics, its efforts for
business growth may fade away quickly. To explore issues related to
ethics and marketing responsibility, we limit our study to areas
such as business, management, accounting, social sciences, eco-
nomics, econometrics, finance, and arts and humanities. The
researcher seeks to advance knowledge by compiling analytic data
with the academic literature on ethical challenges in marketing
responsibility. In other words, gathering the publications will not
be helpful unless we make essential findings. We looked at authors'
ethics, marketing responsibility, sources, and publication countries/
regions.
We first looked for primary keywords and search results for a
broad region of ethics and marketing responsibility. With the help
of the Scopus database and a combination of related keywords,
initially, we got 8634 results. After further refinement and limita-
tion, we got 1886 results for our study. In the part of descriptive
statistics, we use the above 1886 results. The results show that
substantial articles were contributed in 2021 (169 articles) and
2022 (158 articles as of August 31st, 2022). The findings show that
the authors are particularly interested in learning more about
ethical marketing responsibility and contributing to it in the 21st
century. Thus we intend to address Research question 1 (RQ 1), and
the results recommend the overall publication outputs of research
related to ‘ethics and marketing responsibility.
In the data analysis part, we use a bibliometric study with the
help of the Scopus database, bibliometrix, biblioshiny and VOSviewer.
The results are shown in graphical form in this piece of work. The
result of ‘Keyword statistics and Most commonly searched words'
shows the terms ‘marketing’ used 246 times and secured top in the
search list, ‘human’ used 117 times, ‘article’ used 115 times,
‘corporate social responsibility’ used 102 times, and so on. In the
Co-citation part, with the help of VOSviewer, we created a co-
citation network among authors in this study. We limit the mini-
mum number of citations of a cited reference to 20. The VOSviewer
identified 98,658 cited references, of which 53 meet the threshold.
Thus we tried to meet the Research Question 2 (RQ 2) analysis
related to ‘ethics and marketing responsibility.'
In response to Research Question 3 (RQ3), we aim to identify the
Journal wise contribution of articles; the Journal of Business Ethics
(JBE) has the highest of 78 articles relating to ethics and marketing
responsibility and in the network analysis part of the citation
analysis shows that with 3991 citations, Kollmuss (2002), is leading
for highly cited research in our study.
While examining the relationship between the highly scientific
production and highly cited journals concerning ‘ethics and mar-
keting responsibility’ (RQ4), we identified that the most cited
journals are Environmental Education Research, with 3991 cita-
tions on an article published in the year 2002, and Harvard Business
Review with 2265 citations on an article published in the year 1998.
In comparison, the Journal of Business Ethics has published most
articles on ‘ethics and marketing responsibility’ with 78 articles and
Sustainability Journal with 68 articles.
The top-performing country in scientific production which have
made significant contributions to ethics and marketing re-
sponsibility is The USA, with 1214 articles; due to the global
578
Asia Pacific Management Review 28 (2023) 567e583
demand for research in ethics and marketing responsibility, this
analysis may be a revelation for other researchers and nations. In
the citation measurement, The USA secured the top with a total
count of 24,691 citations, and the average article citation for The
USA is 61.12. Other countries are in the process of contributing to
the field of marketing responsibility. Thus Research Question 5 (RQ
5) has been addressed.
Data clustering is the assembling of objects having related
characteristics. Put another way, it assembles articles from the
same field in a single spot. In the current study, network analysis in
VOSviewer was used to cluster the data. The results show that out
of 4733 keywords, 28 meet the minimum requirement of 20 oc-
currences per keyword. The arrangement of nodes and edges il-
lustrates the cluster analysis technique. A particular cluster can be
distinguished from other connected nodes and clusters by its
closely-knit network of nodes. We got 5 clusters to strengthen our
study to identify the trends of ethics and marketing responsibility.
Marketing responsibility is a dynamic concept that reflects a
social discussion on the moral duty of organizations towards all the
stakeholders and the social impact of their actions, yet being open
to many different ethical points of view. This also includes essential
topics, as shown in several clusters like ‘ethics and relationship
marketing,’ ‘ethics and social marketing, ‘ethics and sustainable
marketing,’ ‘ethics and cause-related marketing, and ‘ethics and
marketing strategy.’ After going through a cluster-wise literature
review, we found that the research demonstrates that marketers
possess various characteristics that allow them the required
sensitivity for making moral decisions under the right conditions.
The researchers urge more studies on this topic, emphasizing
reconsidering earlier ethical approaches and focusing on inde-
pendent ethical business practices. Businesses must respond with
tact and wisdom if the pandemic spreads further or any uncertainty
continues. The articles in this cluster-wise analysis typically tackle
the topic of ethics and marketing from a much broader perspective,
considering the advantages they offer for societal advancement and
economic growth. Although most of the research in this area has
concentrated on Corporate Social Responsibility (CSR) in well-
established companies, many writers have studied the opportu-
nities that marketers and businesses have to participate in these
activities, which has helped advance the topic in the future.
The bibliometric study on ethics and marketing responsibility
found that there has been a significant increase in research on the
topic over the last decade. This supports the growing recognition of
the importance of ethics in marketing. However, compared to other
studies in the field, our findings showed a greater focus on corpo-
rate social responsibility and less attention given to individual
ethical decision-making in marketing. This disparity suggests a
need for more research on the personal ethical considerations of
marketing professionals. In light of these findings, businesses must
prioritize ethical decision-making and take responsibility for their
actions in the market. Future research should aim to fill the gap in
our understanding of individual ethical decision-making in mar-
keting and its impact on the industry (see Table 8). Understanding
the relationship between ethics and marketing responsibility is
essential for creating a responsible and sustainable marketing
environment.
5.1. Theoretical contributions
This research has several theoretical significance. First, it adds
fresh ideas on ethics and marketing responsibility to the current
literature on business implementation. Second, the study high-
lighted research gaps in existing literature through cluster analysis.
Third, the research examined the main settings and terms
employed in earlier studies on ethical marketing responsibility.
M.K. Kamila and S.S. Jasrotia Asia Pacific Management Review 28 (2023) 567e583

Table 8
Future research direction, Source: Compiled by the authors.

Clusters on Ethics and Marketing Future Research Directions

Responsibility Topic

Ethics and Relationship Marketing
Ethics and Social Marketing
Ethics and Cause-Related Marketing
Ethics and Marketing Strategy
1. Consumer Privacy and Data Protection: As technology advances, consumer data becomes more valuable, and the need for
ethical management and protection of this data is becoming increasingly important. Future research in this area could focus on
developing ethical frameworks for collecting, using, and storing consumer data in relationship marketing.
2. Customer Centricity: There is a growing trend towards customer-centric marketing, which prioritizes the needs and desires of
the customer. Future research in this area could focus on understanding how organizations can effectively balance their goals
with the customers in relationship marketing.
3. The Impact of Artificial Intelligence and Automation: The increasing use of AI and automation in marketing leads to ethical
concerns, such as algorithmic bias and the loss of personalization. Future research in this area could focus on understanding the
ethical implications of AI and automation in relationship marketing and developing best practices for their use.
4. Corporate Social Responsibility and Sustainability: Organizations are under increasing pressure to act socially responsibly and
sustainably. Future research in this area could focus on understanding the role of relationship marketing in promoting corporate
social responsibility and sustainability and the impact of these efforts on customer loyalty and trust.
1. Ethical considerations in AI and big data: As AI and big data become increasingly integrated into social marketing strategies,
researchers will likely focus on the ethical implications of these technologies, such as data privacy and algorithmic bias.
2. Sustainability and environmental responsibility: In the coming years, social marketing researchers may focus on how
companies and organizations can promote sustainable practices and minimize their environmental impact while still achieving
marketing goals.
3. Social media and digital technology: As social media and digital technology continue to evolve, researchers will focus on
understanding the ethical and social implications of these platforms and technologies, including the impact on privacy,
information dissemination, and community building.
1. The intersection of technology and ethics: With the increasing use of technology in marketing and advertising, it is essential to
explore how ethical considerations play a role in developing and implementing cause-related marketing campaigns. This
includes examining data privacy, algorithmic bias, and transparency in using personal information.
2. The impact of cause-related marketing on marginalized communities: Research is needed to understand the potential
consequences of cause-related marketing on marginalized communities and to develop best practices for avoiding adverse
impacts. This includes considering cultural sensitivity and power dynamics and ensuring that campaigns are representative and
inclusive.
3. Measuring the effectiveness of cause-related marketing: There is a need for further research to determine how to measure the
impact of cause-related marketing campaigns effectively and to understand the factors that contribute to their success. This
includes developing metrics for evaluating the effectiveness of campaigns and exploring the relationship between cause-related
marketing and consumer behavior.
1. The role of ethics in marketing strategy development: Research is needed to explore how ethical considerations are
incorporated into the development of marketing strategies and how they impact decision-making. This includes examining the
trade-offs between ethical considerations and business objectives and the role of ethical leadership in promoting ethical
practices.
2. The impact of marketing strategies on vulnerable populations: There is a need for research to understand the potential
consequences of marketing strategies on vulnerable populations, such as children, the elderly, and marginalized communities.
This includes examining issues such as exploitation, manipulation, and cultural sensitivity.
3. The intersection of ethics and sustainability: As companies increasingly prioritize sustainability, exploring the ethical
considerations involved in marketing sustainable products and services is essential. This includes understanding the impact of
marketing on consumer behavior and the role of transparency in promoting responsible practices.
4. The relationship between ethics and digital marketing: With the increasing use of digital channels in marketing, research is
needed to explore the ethical implications of these channels and how companies can promote responsible practices. This
includes examining issues such as data privacy, algorithmic bias, and the use of artificial intelligence.
5. The role of regulation in promoting ethical marketing practices: Research is needed to understand the effectiveness of existing
regulations in promoting ethical marketing practices and the potential for new regulations to address emerging ethical concerns.
This includes exploring the trade-offs between regulation and innovation, the impact of regulations on small businesses, and the
role of industry self-regulation.

Fourth, future research approaches toward sustainability have been
outlined based on comparison data. Theoretically, this article ad-
dresses ethical aspects of marketing responsibility, including who
has contributed, what has been researched and existing work's
strengths and drawbacks. This article's clustering and themes are
also unique. Cluster 1: ‘ethics and relationship marketing,’ Cluster
2: ‘ethics and social marketing,’ Cluster 3: ‘ethics and sustainable
marketing,’ Cluster 4: ‘ethics and cause-related marketing, and
Cluster 5: ‘ethics and marketing strategy. The interdependence of
clusters shows that more than focusing on one issue is required. All
connected regions or challenges must be handled jointly, and un-
derstanding these links is crucial.
5.2. Managerial contributions
This study can help managers understand the causes, actions,
and outcomes of innovation implementation in the context of
ethical obligation in marketing management with the perspective
of long-term growth. The information offered here will aid
579
businesses in recognizing components that promote responsive-
ness as well as those that obstruct ethical marketing practices.
Using this review, management may adopt strategic goals for long-
term organizational performance based on intelligent decision-
making. Ethical marketing responsibility provides uniform bene-
fits across sectors, industries and countries. Managers must
conduct surveys to determine if ethical marketing responsibility
improves or destroys. Deep thought is needed to determine if ethics
and marketing responsibility contribute to organizations and if it
hinders intellectual business growth. Policymakers must consider
each cluster's future scope.
5.3. Limitations of the study and future research directions
The present study has evident limitations when undertaking a
theoretical examination. Since we only selected a portion of the
Scopus database, the dataset may be skewed due to the selection
criteria. Our focus was on scholarly works written in English,
leaving out studies that might have been novel and fascinating. SDG
M.K. Kamila and S.S. Jasrotia
12, Responsible Consumption and Production, is one of the most
applicable and straightforward methods for businesses to imple-
ment the UN SDGs into their operations. With ethical responsibility,
consumption and production are essential to all stakeholders,
including product creation, supply chain management, and
responsive business management. Our study focused on ethics and
marketing responsibility, so the study area was restricted to
“Business, Management and Accounting,” “Social Sciences,” “Eco-
nomics, Econometrics and Finance,” and “Arts and Humanities.”
Future studies may also perform their research on other topics of
interest. However, the main findings of this bibliometric analysis
and literature review can be used to direct future research,
including some novel applications in several different academic
domains.
6. Future scope
There are surprisingly few thorough literature reviews, even
though marketing ethics research has grown significantly over the
past 30 years, with improved depth and breadth of coverage and
more publications in esteemed academic journals. Two challenges
are deciding which contributions to the subject to consider care-
fully and the vague and disputed description of the scope of ethical
problems related to product marketing. According to Whysall, in
2000, the field was separated into numerous marketing sub-
disciplines, such as marketing research, advertising, pricing, and
so forth (Tsalikis & Fritzsche, 2013). By collecting more information
from other relevant scientific databases, including Web of Science,
Google Scholar, PubMed, and EBSCO host, future studies should
broaden the scope of this investigation and improve its results
based on the crucial insights from this analysis. Future research
direction is essential in a research article because it provides a
roadmap for future work in the field. It helps to identify gaps in the
current knowledge and to suggest new avenues for exploration. It
also allows the researchers to build on their work and advance the
field (Singh & Dhir, 2019). Here are a few future research directions
which can be addressed in the future.
We believe that by drawing attention to the moral issues sur-
rounding marketing responsibility, researchers and academicians
will pay more attention to the fast-changing and techno-centric
world. For future research, it is further suggested to investigate
the relationship between responsible marketing and sustainable
production and consumption (SDG-12) of the UN development
goals, behavioral concerns and marketing ethics, among many
more.
7. Conclusion
The present study contributes to previous research by giving
information on state-of-the-art and identifying trends, gaps, and
research possibilities through the selection and content analysis of
the most recent and pertinent publications published in this field.
The current research contributes to the ethics and marketing re-
sponsibility literature by assessing the factors that impact con-
sumers' behavioral intention and usage behavior. The study
delivers its significance from the social studies perspective and
displays that the current research scenario focuses on ethics and
marketing responsibility. The current study offers insights to future
researchers into high-impact journals and journals publishing ar-
ticles in the area. The study also provides insights into authors who
contribute the most in the area and the prominent countries in
publishing in marketing responsibility and ethics. The study results
have also indicated a significant rise in the number of articles
published in the area, indicating the growing requirement and
scope.
580
Asia Pacific Management Review 28 (2023) 567e583
Author contributions
All authors whose names appear on the submission 1) Made
substantial contributions to the conception or design of the work;
2) Drafted the work or revised it critically for important intellectual
content; 3) Approved the version to be published; and 4) Agree to
be accountable for all aspects of the work in ensuring that questions
related to the accuracy or integrity of any part of the work are
appropriately investigated and resolved.
Compliance with ethical standards
Ethical approval
This article does not contain any studies with human partici-
pants performed by any of the authors.
Conflicts of interest
The authors declare that they have no conflict of interest.
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 Project Leadership and Society 4 (2023) 100091

Contents lists available at ScienceDirect

Project Leadership and Society

journal homepage: www.sciencedirect.com/journal/project-leadership-and-society

Empirical Research Paper

Renaissance of project marketing: Avenues for the utilisation of digital tools

Sebastian Toukola *, Matias Ståhle, Tommi Mahlamäki
Tampere University, Industrial Engineering and Management, P.O. Box 527, 33014, Tampereen yliopisto, Finland

A R T I C L E I N F O A B S T R A C T

Keywords: Project marketing differs from other business-to-business (B2B) marketing processes due to its uniqueness and
Project marketing complexity of offers, which in turn makes the management of project marketing challenging. Although the use of
Digital tools digital tools has received increased attention in research on other forms of B2B marketing, few previous studies
Digital marketing
have concentrated on the project marketing view. To fill this gap, we conducted a two-phase qualitative study
Digitalisation in projects
considering explicit digital tools for the project supplier’s marketing process. Based on the results of this study,
we identify a list of 117 digital tools that can be used in project marketing, which we divide into 11 categories. As
our main contribution, we offer insights into suitable tools that suppliers can use in each step of the project
marketing process. This study contributes novel knowledge about digital project marketing by offering an un­
derstanding of digital tools and their use in the project marketing process.

1. Introduction focused on certain types of tools, such as building information modelling

Digitalisation and digital tools for project management have attrac­
ted increasing attention in project management studies (Marnewick and
Marnewick, 2022), and it is important to understand their potential for
use in projects (Marnewick and Marnewick, 2021). Previous project
management literature has highlighted the importance of the project
front end as crucial for project success; when an initial project idea is
formulated, project values are shaped, and the project’s stakeholders
(usually the customer and the supplier) have established their rela­
tionship (Edkins et al., 2013; Martinsuo, 2019; Matinheikki et al., 2016;
Williams et al., 2019). These types of activities are associated with the
project marketing of the firm and, thus, to the efforts through which the
firm aims at value creation for its customers and for other network
partners in accordance with set strategic and operational objectives
(Tikkanen et al., 2007). A project supplier can be seen as solution pro­
vider: it is defined as a firm that deliver a project or parts of it and
supports the implementation of the project (Artto et al., 2008; Kujala
et al., 2010). It is particularly crucial that a project supplier is found;
otherwise, the project cannot proceed towards its implementation. The
project customer and supplier begin their relationship during project
marketing activities (Turner et al., 2019; Ståhle and Ahola, 2021; Tik­
kanen et al., 2007) at the front end, which are the focus of this study­
—from the digital perspective, which has not received enough empirical
attention.
Previous studies regarding digital tools in project management have
(BIM) (Bryde et al., 2013; Papadonikolaki et al., 2019), social media
(Ninan et al., 2019; Mathur et al., 2021), and various 3D applications
(Khan et al., 2014). Some studies have examined a broad set of digital
tools for specific purposes, such as learning (Jääskä et al., 2022),
stakeholder participation (Toukola and Ahola, 2022), and configuration
management (Whyte et al., 2016). However, few previous studies in the
project management literature have investigated the use of digital tools
in project marketing. The number of digital tools has increased rapidly
during the past decade. In 2014, there were 947 digital marketing tools;
the number had increased to 9932 by 2022 (Chiefmartec, 2022). We
may assume that firms delivering projects also utilise some of these tools
in their project marketing efforts. Project marketing is often seen as a
process with several stages, and studies have covered well the activities
typical to this process (Cova et al., 2002; Crespin-Mazet et al., 2019;
Ståhle and Ahola, 2021), but they have not systematically covered the
utilisation of various tools at different stages of the process. Under­
standing the potential benefits and suitability of these tools in the
project marketing process is essential so that projects can be sold and
delivered to customers in the future.
In other scientific domains, such as business research, digital mar­
keting has received attention in business-to-business (B2B) and business-
to-consumer (B2C) settings (Rusthollkarhu et al., 2022; Järvinen et al.,
2012; Peter and Dalla Vecchia, 2021). However, because of the unique
nature and complexity of projects, marketing is different in their settings
(Cova et al., 2002; Turner et al., 2019; Kujala et al., 2015), and

* Corresponding author.
E-mail addresses: sebastian.toukola@tuni.fi (S. Toukola), matias.stahle@tuni.fi (M. Ståhle), tommi.mahlamaki@tuni.fi (T. Mahlamäki).

https://doi.org/10.1016/j.plas.2023.100091
Received 5 April 2023; Received in revised form 4 July 2023; Accepted 13 July 2023
Available online 14 July 2023
2666-7215/© 2023 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
S. Toukola et al.
therefore, a deeper understanding of digital project marketing is
required. To summarise the research gap, existing research does not
sufficiently cover the use digital tools in project marketing, and there is a
need for an up-to-date investigation regarding the topic. The importance
of this research gap is highlighted by recent rapid advances involving
digital tools (Chiefmartec, 2022).
This study focuses on the perspective of the project supplier (i.e., the
seller who delivers the project). The focus is on external delivery pro­
jects that are marketed to external customers (internal projects are
excluded) but not on projects that are under the legislation of public
procurement because the marketing process differs according to trans­
parency and regulation needs compared to traditional procurement. The
concentration is on the project front end before project implementation,
and the unit of analysis is the project marketing process. The research
questions guiding this study are as follows:
RQ1 What kinds of digital tools can be used in project marketing?
RQ2 How does a project supplier utilise digital tools in its project
marketing process?
To address these research questions, we conducted a two-phase
qualitative study. The first phase aimed to find and categorise the dig­
ital tools that were available and suitable for project marketing, by
conducting empirical search from publicly available sources. As a result,
we developed 11 tool categories, definitions of each category, and
introduced specific digital tools that can be used for project marketing.
The second phase of the study aimed to understand the current project
marketing process of a case company that delivers projects. The con­
centration was in the utilisation of digital tools in the process as well as
the needs for its development. We then synthesised the findings of both
phases by allocating suitable digital tools that can be used in each stage
of the project marketing process.
The study contributes novel knowledge about digital marketing tools
for project management: 1) by offering a holistic view and catego­
risation of available digital tools suitable for project marketing, and 2)
by understanding the digital project marketing process and avenues for
utilising digital tools in the process. Furthermore, the study contributes
to the research of project marketing (Cova et al., 2002; Tikkanen et al.,
2007; Ståhle and Ahola, 2021), project front end (Edkins et al., 2013;
Martinsuo, 2019; Matinheikki et al., 2016), digitalisation in project
management (Papadonikolaki et al., 2019; Marnewick and Marnewick,
2022; Ninan et al., 2019) as well as the study of digitalisation in B2B
marketing research (Iankova et al., 2019; Paschen et al., 2019; Steward
et al., 2019).
The structure of this article is as follows. The introduction is followed
by a description of the theoretical background in which we discuss
previous studies on project marketing and digital tools that are suitable
for project marketing. The methodology section includes detailed
explanation of how both phases of the study were conducted. In the
findings section, we introduce digital tools for project marketing and
their categorisation, and we provide insights into the case company’s
project marketing process with regard to the use of digital tools. The
discussion section presents answers to the research questions,
Fig. 1. Project marketing process (adapted from Artto et al., 2011; Cova et al., 2002).
2
Project Leadership and Society 4 (2023) 100091
contributes to existing knowledge, presents managerial implications as
well as study’s limitations and avenues for further research. The
conclusion follows with a summary of the study.
2. Theoretical background
2.1. Project marketing
Project marketing is a special type of B2B marketing concerned with
activities related to the projects that a firm delivers to its customers
(Tikkanen et al., 2007). In project marketing, a key responsibility is to
ensure a constant flow of projects that support the company’s goals
(Hadjikhani, 1996). The delivered projects are often unique; thus, the
execution of traditional market research, the identification of possibil­
ities, and the anticipation of customers’ needs are challenging aspects of
project marketing (Cova and Hoskins, 1997; Skaates and Tikkanen,
2003). Projects are often complex, the transactions are large, numerous
stakeholders are involved, and customer relationships between different
projects are often discontinuous (Artto and Kujala, 2008; Cova et al.,
2002). Moreover, successful project deliveries require collaboration
among stakeholders and the effective management of these relationships
in the project network (Aaltonen and Kujala, 2016; Brady et al., 2005).
In previous research, project marketing has been presented as a
process to illustrate what happens in different stages before a project is
implemented. The process includes stages such as screening the market
for potential project opportunities, preparing for bidding and making a
bid for the customer, negotiating a contract and closing sales, and
finally, implementing the project (Cova et al., 2002; Crespin-Mazet
et al., 2019). The process can be divided into stages that apply to many
kinds of projects, in which the activities are not directly concerned with
a specific project opportunity, and activities specific to a certain project
opportunity (Cova and Hoskins, 1997). Even though the process seems
linear, in practice the process is often iterative and cyclical in nature,
meaning that not all the steps are necessary needed or that some steps
need to be repeated to make a suitable offer to the project supplier and
customer. In this research, we approach the project marketing process
based on Fig. 1 below. Project implementation and operations (shaded
in grey) are not discussed in this paper.
Traditionally, well before a project’s implementation, the marketing
process includes the following stages: project marketing strategy
development, market screening, preparing for bidding, making a bid,
and negotiating a contract (Jalkala et al., 2010; Turner et al., 2019).
These stages may take several months to several years to complete
(Kujala et al., 2007; Ryynänen et al., 2013). Many internal functions are
involved in this process (e.g., management, technology, logistics, and
project management) (Turkulainen et al., 2013; Ståhle et al., 2019).
Salespeople are often initially responsible for the process in addition to
attracting customers through cold calls, customer visits, contacting
buyers using web-based tools and social media, and attending seminars
and exhibitions (Anderson et al., 2009; Cova et al., 2002). After a deal
has been finalised, the responsibility for the project is transferred to the
project managers or others who are responsible for implementing the
project.
S. Toukola et al.
Project marketing research has often been conducted in traditional
business contexts, including the construction industry (Crespin-Mazet
et al., 2019; Turner et al., 2019), engineering firms (Blomquist and
Wilson, 2007), the process industry (Mainela and Ulkuniemi, 2013;
Ahola et al., 2013), and software development (Savolainen and Ahonen,
2015; Kujala et al., 2015). In many cases, marketing strategies rely on
personal contacts and traditional tactics to approach customers. How­
ever, forming long-term personal relationships between the firms’ em­
ployees might not be as relevant today as it was in previous decades
(Cova et al., 2019). The rise of various online messaging tools (e.g.,
Microsoft Teams) has already replaced much unnecessary travel, and
customers increasingly search online for information before first con­
tacting a potential supplier (Syam and Sharma, 2018). Thus, project
suppliers need to find new ways of doing business as well as finding and
convincing customers, as traditional approaches may no longer be
relevant. In project marketing, the development of a variety of digital
tools may offer opportunities to update a project marketing strategy;
these tools can be effectively utilised in various stages of a project
marketing process. Collecting, storing, and sharing customer informa­
tion in the sales process has been acknowledged (Ståhle and Ahola,
2021). However, previous research on project marketing has not sys­
tematically investigated the available digital tools, their potential in
project marketing, or challenges related to the use of these tools in en­
vironments that are both complex and discontinuous.
2.2. Digital tools for project marketing
For many years, digitalisation and digital tools have been seen as
forces for change in B2B marketing (Cuevas, 2018; Mero et al., 2020;
Wiersema, 2013). Rapid advances in digital technologies have opened
numerous research opportunities (Lilien, 2016), especially related to
digital tools for marketing, which we define, following Toukola and
Ahola (2022), as websites or applications that are used in marketing and that
are accessed via a digital interface or otherwise rely on digital technology to
function. Because project business is conducted mainly between orga­
nisations, we excluded B2C while reviewing previous literature and
concentrated on the B2B context. Below, we discuss studies that have
identified the range of digital tools, and their categories, that can be used
in project marketing.
Social media has gained attention, and tools related to it have been
discussed. Fraccastoro et al. (2021) examined digital marketing through
social media, such as Facebook, LinkedIn, and Twitter, and compared it
with marketing done with tools that are meant for online communication
like online chat and email, including Skype and WhatsApp. The authors,
similar to Wang et al. (2016) and Agnihotri et al. (2012), put forth the
argument that incorporating social media into a firm’s marketing pro­
cess is beneficial. Additionally, a prior investigation discovered that if
customers actively engaged with a company’s social media content, the
company may gain more possibilities for sales, and the customers
experienced greater benefits compared to customers who did not engage
(Rishika et al., 2013). Regarding projects, the use of social media has
been discussed in light of engaging stakeholders in projects in which its
importance have been identified (Ninan et al., 2019; Zhang et al., 2018;
Toukola and Ahola, 2022) or in measuring a project’s benefits (Mathur
et al., 2021), but its potential has not been identified in project
marketing.
Managing relationships with customers has attracted studies
concentrating on the customer journey—that is, the journey towards the
sale and after it, traditionally divided to pre-, purchase and post-
purchase stages (see, e.g., Lemon and Verhoef, 2016; Steward et al.,
2019). Especially in project marketing contexts, where customer
3
Project Leadership and Society 4 (2023) 100091
relationships often are lengthy, managing the relationship with the
customer is important. Previous literature has discussed the digital tool
category of customer relationship management (CRM), which comprises
functionalities for acquiring customers, understanding them and their
needs, and increasing their satisfaction and loyalty (Teo et al., 2006;
Khodakarami and Chan, 2014). HubSpot and Salesforce are identified as
a major CRM tools, and they contain comprehensive marketing func­
tions from chat bots to web page creation (Humphrey et al., 2021) or
web analytics. Sales force automation (SFA), a process that uses digital
tools to automate sales processes, can also be considered a part of CRM
systems (Mahlamäki et al., 2020). Because CRM tools are important for
projects suppliers, as is emphasised by the unique nature of project
marketing, it is surprising that they have not been researched in
project-related studies.
Search engine optimisation (SEO) and search engine marketing (SEM)
are tool categories that have been identified previously in the literature.
Research by Taiminen and Karjaluoto (2015) has shown that usage of
SEO and SEM tools improves the visibility of suppliers and their offer­
ings in search engines. SEO tools are designed to optimise the content of
a supplier’s web page, aiming to improve its ranking in search engine
results. SEM tools enable paid advertising within search engines, such as
Google, ensuring that a paid ad appears prominently when a search is
performed (Taiminen and Karjaluoto, 2015). Without implementing
SEO and SEM tools, a supplier’s web page is likely to have a lower po­
sition in search results, which can limit customer traffic to the page (Xu
et al., 2012) and thus hinder a project supplier’s marketing, as potential
customers are not aware its offering.
In the study by Järvinen and Karjaluoto (2015), the focus was on web
analytics tools that are utilised for measuring the performance of digital
marketing. The specific analytics tools they examined were Google
Analytics, E-Space, and Salesforce. The research highlighted the
importance of this type of tools for firms that sell complex solutions,
such as projects. Additionally, it was noted that traditional digital tools
like PowerPoint and Excel can also serve analytical purposes within the
marketing process (Biegel, 2009; Järvinen and Karjaluoto, 2015). Web
analytics tools should be considered relevant for project suppliers to
utilise in their project marketing process.
Building information modelling (BIM) has received attention, specif­
ically in project management literature (Papadonikolaki et al., 2019;
Oraee et al., 2019; Liu et al., 2017). BIM helps in the design, construc­
tion, and maintenance of construction projects (Eastman et al., 2011;
Bryde et al., 2013) and can be seen as software applications, tools, and
activities to generate, manage, and share information with stakeholders
(Papadonikolaki et al., 2019). BIM benefits both the project customer
and the supplier by helping control costs and increase collective un­
derstanding among stakeholders (Young et al., 2009; Jones et al., 2017).
Although BIM is used across the project lifecycle (Eastman et al., 2011),
it is also useful for project suppliers at the front end, such as in preparing
bids. In addition, 3D visualisation and virtual reality (Wu et al., 2010;
Khan et al., 2014) BIM tools can help suppliers demonstrate project
solutions and create marketing materials. Due to BIM’s comprehensi­
veness—it is often a tailored solution for project organisation consisting
of different digital applications and tools (or an interconnected set of
digital artefacts, as Papadonikolaki et al. (2016) suggested), the exact
BIM tools are scarcely discussed in the literature.
In addition to BIM, project management literature has discussed
geographical information systems (GIS). GISs are automated systems that
capture, store, retrieve, analyse, and display spatial data (Clarke, 1995).
Google Maps is an example of a GIS tool (Brown and Kyttä, 2014) that is
publicly available. Little skill is required to access it (Kahila-Tani et al.,
2019), so it is readily available for project suppliers to use in the
S. Toukola et al.
marketing process. However, as is the case with BIM, GIS tools are also
often tailored solutions consisted of different digital application and
tools, and no other exact tools (beyond Google Maps) have been dis­
cussed in the literature.
As seen, there exists literature regarding digital tools that can be used
in project marketing, although the project management literature itself
have not identified their potential to be used in this domain. Also,
because the number of digital tools has increased rapidly (Chiefmartec,
2022), it is evident that in practice, numerous digital tools can be used in
project marketing, but they have not been discussed. The need for
research regarding how to use digital tools in marketing and which tools
have potential in it, has been identified (Steward et al., 2019). This gap,
as well as the specific tools that a project supplier can use in its mar­
keting, is the focus of the empirical part of the current study.
3. Data and methods
Because of its multifaceted research goals, this study was conducted
in two separate phases. The first aimed to identify and categorise the
digital tools available for project marketing. The second was explorative
in nature and focused on how a project supplier currently utilises digital
tools in the project marketing process. Moreover, this phase focused on
identifying possibilities and needs for their use in the case company
context. The flowchart in Fig. 2 shows the two phases and steps in the
research for this study.
The next section explains Phase 1 and Phase 2 in detail, as well as
their synthesis. The results are presented in the Findings section.
Fig. 2. Flowchart of the research steps and phases.
4
Project Leadership and Society 4 (2023) 100091
3.1. Phase 1: Identifying the digital tools
The study began with exploration of the previous literature, based on
which we developed an understanding of the current stage of research
on project marketing and on the kinds of digital tools used in it. In
section 2.1, we presented theory of project marketing and introduced
the project marketing process, while section 2.2 continued by intro­
ducing a range of digital tools and their categories that can be used in
project marketing. As was seen in section 2.2, there is not much dis­
cussion regarding digital tools for project marketing, and almost none at
all in the project management domain. Consequently, because current
literature does not sufficiently cover digital marketing tools, we needed
to seek first-hand information about the tools that are used in practice.
In 2020, we aimed to gain an understanding of the currently avail­
able digital tools used in project marketing in practice by practitioners.
For this purpose, we first used Boolean operators to perform a keyword
search in Google; Google was used because, first, the focus was on
practice, and second, academic research on digital tools is scarce, which
led us to exclude academic databases. These keywords included the
following: digital tools for sales, marketing tools, digital AND sales AND
marketing, digital project tools, project marketing AND tools. Second, we
searched websites that are used to search for and find digital sales and
marketing tools, such as Capterra, TrustRadius, and G2. In the third step,
we skimmed through multiple blogs of sales and marketing experts (i.e.,
digital influencers) to find relevant digital tools. Appendix A lists our
three information sources. This search resulted in 117 digital tools used
in marketing.
We then analysed each of the 117 digital tools to determine their
functions. The functions of each tool are based on data collected from
S. Toukola et al.
the web pages that describe them (in most cases, the tool supplier’s own
web page). We carefully coded the main functions of each tool using
codes that stem from their functions, e.g., “mass marketing,” “email
designer,” “creates questionnaires,” “formulates contracts,” and “main­
tains the contract signing process.” Then, we sorted the tools into similar
groups based on their functionalities and defined the categories to which
the tools belonged. Continuing the code example above, tools to be
coded as “mass marketing” and/or “email designer” were sorted into the
same group (eventually categorised as online communication tools),
“creates questionnaires” to another group (eventually categorised as
market research), and “formulates contracts” and/or “maintains the
contract signing process” to a group that was eventually categorised as
contract signing. We followed the logic that each named category rep­
resents the main functionalities of its tools.
In parallel with searching for, analysing, and categorising the digital
tools gleaned from our empirical search, we utilised information from
previous literature (see section 2.2) because a few tools and categories
have already been discussed in it. We utilised the previously mentioned
categories in our categorisation, namely social media, online commu­
nication (Fraccastoro et al., 2021), web analytics (Järvinen and Karja­
luoto, 2015), CRM (Khodakarami and Chan, 2014), BIM (Eastman et al.,
2011; Papadonikolaki et al., 2019), and GIS (Brown and Kyttä, 2014).
All the digital tools explicitly mentioned in the literature were also
found in our empirical search.
Finally, we compiled a list of 117 tools, categorised into 11 cate­
gories according to their functionalities, that can be used in project
marketing (see Table 2). The categories that were similar as previously
presented in the literature are marked with asterisk, and similarly the
digital tools mentioned in the literature are written in italics. The
searching, listing, and categorising of the digital tools were done by two
researchers to increase the validity of the study.
3.2. Phase 2: Case study
To support the findings of Phase 1 and gain a more comprehensive
view from which to address the research questions, a single case study
approach was chosen (Yin, 2014). The type of case study this study
addresses is exploratory in nature, meaning that the researchers
remained outsiders to the case they investigated; the aim was to provide
rich description and in-depth illustration of the phenomenon (Martinsuo
and Huemann, 2021; Yin, 2014). This explorative setting allowed us to
paint a rich picture of the topic, which has not received much attention
in the literature, and to gain new insights into and support for the po­
tential of digital tools for use in project marketing. The choice of a case
study approach can be considered attractive, especially in the project
business research stream (Martinsuo and Huemann, 2021) and when
researchers aim to study different phenomena in natural settings.
Context sensitivity in the field of project management (Smyth and
Morris, 2007) and B2B and project marketing (Easton, 2010; Aspara
et al., 2013) also supports the choice of case study approach. The goal of
the case study was to determine the reality of environments in which
project marketing is conducted, as well as opportunities, needs and
challenges related to the use of digital tools in project marketing. The
chosen case is not random but selected in purpose (Eisenhardt, 1989) to
illustrate the possibilities and challenges of using digital tools in a rather
typical project supplier and project marketing context.
Our case study focused on Mechtro (a pseudonym to maintain
confidentiality), a contract manufacturer of electromechanical systems
and services. Mechtro is a medium-sized family-owned business estab­
lished over 40 years ago with approximately 500 employees. Its head­
quarters and manufacturing units are located in two countries in
northern Europe. Mechtro serves its global customers in various in­
dustries, including marine and offshore, railways, energy solutions, and
industrial machinery. In addition to a variety of industrial equipment
manufactured on its premises, Mechtro offers other services to its clients,
such as engineering and project management, supply management,
5
Project Leadership and Society 4 (2023) 100091
installations, classification, and product support. Mechtro’s offerings
have increasingly moved towards providing comprehensive solutions.
These solutions are often highly customised based on the customer’s
needs. Altogether, Mechtro can be seen as a conventional project sup­
plier company that has a variety of different customers operating in
rather conservative business areas where customers are seeking for
trustworthy and high-quality solutions that support their main business.
However, changing future business environment and customer needs are
more and more forcing the company also to change their marketing
approaches to a more digitalised direction, thus, the company can be
seen as a fruitful case to be studied in the light of the research questions.
Data were collected through semi-structured interviews conducted in
the company. In collaboration with the company representative, key
informants were selected from among employees in sales, marketing,
and project management. We recruited the most relevant informants in
all the cities and countries in which the company had either sales or
manufacturing units or activities. Most informants had more than five
years’ experience in the company. With respect of the research aim, we
specifically targeted sales managers as they are responsible for project
marketing activities in the case company, thus, have the best knowledge
on the topic. To support the views of the sales managers, also a pro­
duction manager and two project managers were interviewed to get a
more comprehensive view of the company’s operations and project
management, that is closely connected to the project marketing process
and activities. Altogether, nine interviews were conducted as shown in
Table 1 below. The average duration of the interviews was 68 min. All
interviews were conducted between the autumn of 2020 and the spring
of 2021. Because Covid-19-related restrictions were in place when the
interviews took place, they were conducted remotely via Teams. All
interviews were recorded and transcribed.
The interview outline was jointly developed with the company
representative to ensure that the focus was on the most important issues
in their project marketing activities. The outline consisted of a discus­
sion about the interviewee’s background in the company, in organising
sales and internal sales practices, and project management and customer
portfolios to obtain general information about the company’s opera­
tions. The focus of the discussion was on the future of sales and the
current use and needs regarding the utilisation of digital tools in project
marketing. The discussion and the interview outline were slightly
modified to align with the expertise of each interviewee. Towards the
end of the interviews, the answers began to become repetitive, indi­
cating that saturation had been achieved.
Within-case analysis (Eisenhardt, 1989) followed a standard quali­
tative data analysis procedure, including free exploration of the data and
systematic coding (Yin, 2014; Hsieh and Shannon, 2005). We first
explored the data in general to gain an overall picture of the company’s
Table 1
Details of the interviews.
Interviewee Focus of the interview Duration
(min)
Sales manager 1 Sales and marketing activities, global 54
approach
Sales manager 2 Sales and marketing activities, key accounts 76
Sales manager 3 Sales and marketing activities, existing 78
accounts
Sales manager 4 Sales and marketing activities, Central 82
European accounts
Sales manager 5 Sales and marketing activities, Northern 49
European accounts
Production Production and project management 72
manager
Project manager Project management process and activities of 64
1 the company
Sales manager 6 Sales and marketing activities, Central 77
European accounts
Project manager Project management process and activities of 68
2 the company
S. Toukola et al.
project marketing and sales activities. Then, were able to formulate
patterns (Eisenhardt, 1989; Miles and Huberman, 1994) and code the
data to first order themes (Gioia et al., 2013) following the stages of
project marketing process gleaning from the literature: project market­
ing strategy development, market screening, preparing for bidding,
making a bid, and negotiating a contract. To support this, documenta­
tion and a process chart of the company’s current marketing process,
delivered by the company representative, was discussed and reviewed
together with the relevant interviewees.
After coding the first order themes, each stage was coded further to
gain comprehensive view of its current situation, key aspects and pos­
sibilities and needs for further development regarding the utilisation of
digital tools. That coding to second order themes (Gioia et al., 2013) also
concentrated on challenges of using digital tools in the project market­
ing process. The coding approach was inductive and conventional
(Hsieh and Shannon, 2005) and partly deductive (Hyde, 2000) when
considering the first order themes from project marketing process de­
scriptions (Cova et al., 2002). Findings stemming only from the data
were reported especially regarding the use of digital tools. This way, the
researchers were able to identify tools already used in some project
marketing stages, or if tools were not used, what were the reasons for
this and what it would require from the company to start using them
more widely in project marketing.
Illustrative quotes from the interviews were utilised to enhance the
transparency between the data and the reported findings. To preserve
the confidentiality of the interviewees, the quotations were anonymised.
The researchers discussed the findings throughout the analytical pro­
cess, and the coding was jointly developed. The results of the interviews
were presented to the company representatives in a 2-h session, during
which they were jointly discussed and cross-checked. This approach
increased the credibility of the results and ensured that all relevant as­
pects were included.
3.3. Synthesis: Phase 1 and Phase 2
At this point, as we had an understanding of digital tools for project
marketing (Phase 1), and Mechtro’s project marketing process and its
needs (Phase 2), it was possible to synthesise the results of the phases at
certain points. We identified how Mechtro’s project marketing process
(including the various stages of the process) works, its key aspects, and
needs. Based on the aforementioned identification, we were able to
connect the suitable tool categories to the stages of the project marketing
process (see Fig. 3).
The suitable tool categories were allocated for each stage of the
project marketing process based on the following logic: based on the
digital tool category definitions (see Table 2) and in-depth knowledge
regarding possibilities of the digital tools combined with the case
analysis, we sought for correspondence between each category and
suitable project marketing stage. This logic has characteristics of pattern
matching (Yin, 2014), enabling to determine similarities and differences
(Eisenhardt, 1989) between the needs of the Mechtro and suitable cat­
egories for each project marketing stage. The project marketing stage
and digital tool category were allocated together if our case analysis
revealed that the case company uses certain digital tools in project
marketing stage or had needs regarding those tools and researchers
acknowledged that tool category may be helpful.
To give an illustrative example of the logic and formulation of the
synthesis, in the preparing-for-bidding stage, it is vital for Mechtro to
understand customer needs, do a viability analysis, and ensure that
customer information is stored and up to date. Digital tools from cate­
gories such as online communication, social media, and CRM could help
in these tasks. Also, while the bid is being prepared, other tools that may
offer help are, for example, a meeting scheduler if meetings are needed,
BIM and GIS if visualisations and cost calculations are being done to
prepare the bid, and social media—it can be helpful to check the social
media of customers to ascertain whether there are other factors to be
6
Project Leadership and Society 4 (2023) 100091
considered. It is worth noting that digital tool categories can be suitable
at multiple project marketing stages due to their multifunctionality and
possible similarity of needs for action among stages.
In the next section, the results of Phase 1 and Phase 2 are presented
separately, followed by a synthesis of the phases with a detailed expla­
nation of suitable digital tools for each of the project marketing stages.
4. Findings
4.1. Phase 1: Digital tools for project marketing
The findings of empirical research of Phase 1 that enabled devel­
oping digital tool categories and placing numerous tools in each cate­
gory that can be used in the project marketing process, are presented in
Table 2. The table contains definitions of the categories and the iden­
tified tools.
As shown in Table 2, based on the results of Phase 1, 11 categories of
digital tools and 117 tools used for project marketing were pinpointed.
Each category contains tools with common functionalities. It is worth
noting that tools may differ slightly from the actual functionalities
within each category. For example, the contract signing tool SignHero is
used to sign contracts online, while Scrive is used to formulate contract
templates and support other activities in the contract signing process.
Also, regarding social media, well known tools like Facebook and
LinkedIn are included in the same category as well as their separate and
supporting tools Facebook analytics for analytical purposes and Link­
edIn campaign manager for advertising.
Regarding categories BIM and GIS, no exact tools (except Google
Maps, that was mentioned in the literature) are presented. BIM and GIS
tools in practice are often comprehensive, tailored solutions consisted of
various digital systems and engines so they diverge from the tools of
other categories. However, some tools having elements of BIM and GIS
were found in empirical research (e.g., BIMx and Scribble Maps) but due
the aforementioned reason we decided to exclude them from our list.
4.2. Phase 2: Project marketing process and opportunities for using digital
tools
In general, Mechtro conducts contract manufacturing of stand­
ardised products and complex solutions for its customers and relies on a
certain project marketing process when delivering complex solutions.
The company has recognised that project marketing requires an
approach that differs from that used to sell standardised equipment. For
example, the project sales cycle can last from several weeks to several
years. The entire process involves several people inside the organisation,
and especially salespeople need information from design, project man­
agement, and production to finalise a deal. Each project is unique, and
the solutions are highly customised based on customers’ needs and re­
quirements. All project deals require negotiating individual contracts, in
contrast to contract manufacturing, in which a contract can be signed for
many years into the future.
Every project has its own contract and a separate sales stage in each of
them. Bidding a project is much more challenging, as you need to un­
derstand what a customer is really looking after. (Sales manager 1)
The company has established marketing process that involves stages
of project marketing strategy development, market screening, preparing
for bidding, making a bid, and negotiating a contract. As a general
marketing strategy development, the company relies on traditional mar­
keting approaches. Its web page was mentioned as an important channel
for making the company visible when potential customers search for
suppliers. The company also has a marketing coordinator who is
responsible for website and social media updates. Social media were
mentioned as a marketing tool (e.g., YouTube, Instagram, LinkedIn, and
Facebook), but many sales managers were not familiar with all their
possibilities for marketing. The use of LinkedIn and Facebook depends
S. Toukola et al. Project Leadership and Society 4 (2023) 100091

Table 2
Categories and digital tools for project marketing.
Tool category Definition (main functions) Digital tools identified, n = 117

Market research Used for market research, e.g., by recognising popular search words and SurveyMonkey, Google Trends, Typerform, Crowdsignal
forecasting discoverability of web pages. Some help create questionnaires to
analyse markets.
Prospecting Facilitate market screening and find potential customers by tracking changes, vainu.io, Leadfeeder, Prospect.io, Snov.io, Meltwater, Demand base, attach.
e.g., new project inquiries. io, Clearbit, Act-On, Autopilot
Online interaction Interact with potential customers on web pages to gather information about LeadPages, ClickFunnels, OptimizePress, Leadoo, Giosg
possible customer needs. Chatbots, pop-up screens, and landing pages are
examples of methods these tools utilise.
*Online Facilitate online communication with customers, some with automated mailchimp, Slack, emaileri, Campaign Monitor, Constant Contract,
communication functions, e.g., automatic emails or newsletters. Sendinblue, Flashyapp, Hatchbuck, Omnisend, Klaviyo, Aweber, Convertkit,
Getresponse, iContact, NEWOLDSTAMP, Followup.cc, Creamailer, Drip,
Yesware, Spotmore, Postiviidakko, MS Teams, Skype, WhatsApp
Meeting Help schedule and propose meetings, even automatically. Calendly, Doodle, Meetin.gs
schedulers
*Web analytics Monitor visitor counts on web pages, visitor routes, and elements that work Google analytics, SimilarWeb, KISSmetrics, Crazy Egg, Fonecta Audience
well in web pages. Based on analytics, the supplier is better informed about Insights, Hotjar, ClickMeter, E-space
what works and what does not.
*Social media Maintain, update, and analyse suppliers’ social media pages, their success and Instagram, Twitter, Pinterest, LinkedIn, Facebook, YouTube, MeetEdgar, Proof,
advertising. Buffer, Hootsuite, Facebook Ads Manager, LinkedIn campaign manager,
PromoRepublic, Tailwind, Smartly.io, Unamo Social Media, AdEspresso,
AdStage, Crowdfire, Socialpilot, SocialBee, Followerwonk, Keyhole,
Talkwalker, TweetDeck, Facebook Analytics, Iconosquare, Buzzsumo,
Mention
*CRM Help manage customer–supplier interactions, store customer information, and Monday.com, Creatio, HubSpot, Salesforce CRM, Sugar CRM, ZOHO CRM, SAP
manage the marketing process. Can be used holistically in all kinds of digital CRM, Nimble CRM, Microsoft Dynamics CRM, Pipedrive CRM, Teamgate,
marketing processes. Can be used in marketing automation. Marketo, SharpSpring, Ontraport, ActiveCampaign, Keap, ViidakkoCEM
*SEO & SEM Help improve web page visibility in search results by suggesting changes to Google Ads, Ahrefs, Yoast, Google Keyword Planner, Serpstat, Google Search
pages or paid advertising. Console, Google, Semrush, Moz, Unamo SEO, Spyfu
Contract signing Help manage contract signing by offering the option to sign online. Some help SignHero, Vismasign, Scrive, Docusign, Adobe Sign, Hellosign
formulate contracts.
*BIM & GIS Help visualise maps or buildings for various purposes, e.g., quantity Google Maps (GIS), but no other exact tools located. BIM and GIS are often
calculations and illustrating projects, and they generate, manage and share tailored solutions for suppliers, utilising various digital systems and engines.
information within stakeholders. These are common in the construction
industry.

Note. Categories with asterisk (*) and tools written with italics are also identified in previous literature.

on individual sales managers. References from completed projects were
important marketing materials for the company, and product exhibi­
tions were sometimes visited. One marketing challenge was the high
customisation rates of solutions and extensive customer groups. Many
sales managers mentioned that the company could be more active in
marketing, and especially digital marketing strategy was still under
development at the time of conducting the interviews.
If you think about it, our products and services are always customised.
You’re not able to send a general marketing email to potential customers
because our business doesn’t work that way. (Sales manager 3)
When moving on to market screening stage, individual sales managers
and their personal contacts play vital roles in screening for market op­
portunities. Traditional customer visits and personal contacts were seen
as important, but the internet and social media (e.g., LinkedIn) were
mentioned as useful tools in finding new potential customers as well.
The initial contact might be made first by phone and then by email; if a
customer is interested, a face-to-face meeting is scheduled. As a new tool
(at the time of conducting the interviews), Microsoft Teams was being
used for these meetings. It was mentioned that the company had
managed to close some deals by using only Teams without meeting the
customers face-to-face. In some cases, the company educates its cus­
tomers on the use of tools for online meetings. The sales managers
mentioned that such changes have been rapid, and although customers
tend to be conservative, the use of tools that enable online meetings has
become increasingly popular.
LinkedIn, in my opinion, is quite a good source. I don’t know if I get
success, at least on LinkedIn, but it’s quite nice to just find companies and
observe them. And they are quite often publishing what they are building,
so we know if this is suitable for our production, and then you can propose
something. (Sales manager 4)
After the first meeting, it might be a year before the sales process
moves to the next stage, i.e., preparing for bidding. The challenge is how
to keep potential customers active for the entire time. At these later
stages of the marketing process, digital tools include internal databases,
emails, and other online communication tools. Customer information
and project and production planning details are stored on internal
servers, and office tools (e.g., OneNote, email, and Excel) are used,
depending on the sales manager. Customer information is shared in
regular meetings with the sales organisation. It was mentioned many
times that CRM software would be a useful tool for storing information,
but at the time of the interviews, the company was not using this tool.
We don’t have CRM system. I would say that’s a little bit disadvantage of
our working but we have that kind of package of Microsoft 365 system so
it creates a lot of possibilities to utilise those tools. And one of it is OneNote
so on OneNote, we always do meeting minutes. (Sales manager 4)
In some market areas, electronic auctions have been used when the
customer requests a quotation through an online system. Based on the
information given by the customer, the supplier makes a competitive
offer. In many cases, the best price wins. Mechtro considers this
approach problematic because it is often difficult to determine the offer
and the solution based on limited information. As a result, the winning
offer may not include all the technology that a customer actually needs.
Electronic auctions were not considered attractive in project marketing.
During those kinds of auctions, you have no interaction with the customer.
You just have the pure numbers. And you have to come up with the price
…. We have done that a couple of times, and we proved that it’s not that
easy in the projects we are offering. You cannot just compare the prices.
(Sales manager 6)
When moving on to a stage of making a bid, sales managers are often
responsible for collecting all the required information, which might take

7
S. Toukola et al.
several weeks to obtain from different internal functions and suppliers.
Because the solutions are highly customised, many kinds of technolog­
ical details must be obtained from various stakeholders and shared
effectively with salespeople. At this point, the most important decision is
to ensure that the company can deliver the required solution from the
standpoints of manufacturing, technology, scheduling, and attractive­
ness. If the customer accepts the initial offer, a detailed offer is negoti­
ated later, which includes all relevant parties. For example, a future
project manager may be involved in this process.
We might get a request that we have never received before. It’s very
laborious to get all the information for these types of requests. Just this
morning, I had a discussion with our supplier, and we both were like how
we should do this. (Sales manager 1)
To finalise the deal, final stage of negotiating a contract begins with
the customers, that follow rather typical approaches. Both supplier and
customers are confirming the final details and all the necessary infor­
mation are stored so that the project can be moved to the implementa­
tion phase. Some automatic data analysis tools were discussed and their
potential was seen in processing many kinds of data, such as billing,
pricing, and other supporting activities. However, many interviewees
were still not convinced that an automation tool could be used in their
business, especially in marketing. The complexity of an offer was
underscored as a particular challenge in automating the project mar­
keting process (e.g., the use of chatbots). When the offer was simple, the
discussion circled around automating quotation handling. The role of a
salesperson or human contact was still viewed as an important aspect of
their business.
I don’t believe that automation in our sales is a very potential option due
to the complexity of our offer. I believe that in our sector, a professional
salesperson is still needed to contact the customer. (Sales manager 2)
To summarise, in Mechtro’s project marketing process, some tools
were already being utilised, and their potential was recognised. Overall,
remote working and handling requests online were viewed as becoming
increasingly popular. Regarding the general needs, the interviewees
stated that they need more information about potential tools that could
be used to improve their digital marketing processes, more training in
the use of various tools, more efficient information processing ap­
proaches, and implementation of a proper CRM system.
I think we just need to find correct tools for the company and for the
workers. There are a lot of different tools coming to the market all the
time. Personally, it is not a huge deal which tool it is but someone just need
to tell me which tool to use and then I will use it. Then, I might ask five or
more times for help with that. (Sales manager 5)
4.3. Synthesis: Digital marketing process and tools
Based on the results of Phases 1 and 2, the synthesis was formulated:
we determined suitable digital tools that can be used in project mar­
keting, following the logic presented in section 3.3. Fig. 3 below shows
the main findings of the study, consisting of key aspects of case com­
pany’s project marketing process and the suitable digital tool categories
that can be used in each stage of the project marketing process. Below
Fig. 3, we introduce these findings in more detail.
The development of a strategy is a crucial part of the entire project
marketing process. Market research and web analytics tools can help
develop a marketing strategy. Market research tools, such as Google
Trends, follow most search words and rising trends that can help the
supplier react to changes in the market by, for example, developing web
pages and product offerings. In Mechtro’s case, an appropriate digital
marketing strategy was still under development, but the need for
different tools and development of the company websites was already
recognised. Various market research or web analytics tools can help the
company reach the next phase of its digital project marketing efforts.
8
Project Leadership and Society 4 (2023) 100091
Web analytic tools can be used to follow the success of the supplier’s
current web page by, for example, recognising elements that customers
have found most interesting, and they can map the customer’s journey
towards the web page, which can then be developed further to increase
sales. In addition, in this stage, SEO and SEM tools can be utilised by
increasing and analysing the supplier’s success in using search engines.
Lets start first with fixing our websites to correspond what we actually do.
We can start with that and then, we can move on to targeted LinkedIn
marketing. I believe this will help our marketing efforts. We are currently
building on that. (Sales manager 1)
Yeah we have websites and all kinds of social media tools. Personally, I’m
not very active in using them ….But we have put effort in those and we
have digital marketing strategy and our websites under development.
(Sales manager 3)
Social media tools are important in the early stages of the project
marketing process because they handle all the social media functions
that suppliers require. Some tools (e.g., Facebook, Ads Manager, and
Buffer) can automate suppliers’ posts and updates in social media. There
are also tools for analytics in social media, such as Keyhole and Face­
book Analytics, which can be used for market strategy development and
to analyse the success of a supplier’s brand in social media, such as the
use of hashtags. The findings showed that Mechtro used social media
channels (e.g., Facebook, LinkedIn, and YouTube), but their usage ten­
ded to depend on the sales manager.
I get information through my own network that I have established
throughout the years, especially in LinkedIn. There, you can see who has
done what and what kind of sales have been closed. (Sales manager 1)
Once, I got a connection to the guy from [Company X] via LinkedIn and
we just briefly started discussing on LinkedIn who you are as a company,
and he got interested and he contacted us with the request for quotation.
(Sales manager 6)
In market screening, digital tools for prospecting can automatically
follow competitors or potential customers in the market. For example,
they can automatically follow changes in potential customers based on
news or other available information and then alert supplier if there are
opportunities for project sales. Online interaction tools are used to
attract the attention of web page visitors, as well as their contact details,
which salespeople can access through a chatbot. Mechtro’s salespeople
mentioned that they followed the market by using social media to keep
abreast of their customers’ environments, but this process could be
further automated by employing the proper tools. In the interviews,
generational differences were discussed with Mechtro’s salespeople;
younger workers were considered more willing to use available
messaging-based tools. In the future, chatbots or communicating with
potential buyers may occur increasingly online rather than face-to-face
or in phone calls.
I had one older customer who once called me to go through the details of
one specific case. There was also one younger worker that was busy and
asked if I could send a message in chat or via email. You can see that
especially young people more and more like to talk to you by utilising
different messaging options rather than calling. (Sales manager 5)
I think automation has arrived without us properly even noticing. I think
our aim is to get, for example, some sort of Internet of Things robot to do
things automatically so that we don’t have to search for information
manually. A robot would comprise the price lists for example. Why would
we do that manually if a robot can do that. (Sales manager 3)
While a supplier prepares a bid, BIM can help with cost calculations,
and both BIM and GIS can pinpoint the location and shape of the project,
especially for infrastructure projects. In Mechtro, a tool that automates
simple information gathering was discussed as helpful in negotiating
offers, but it was not currently in use. The majority of the interviewees
S. Toukola et al. Project Leadership and Society 4 (2023) 100091
Fig. 3. Project marketing process using digital tools.
9
S. Toukola et al.
mentioned the high complexity and customisation of offers as chal­
lenging to automate in their business. However, these kinds of tools
would have many benefits, such as saving salespeople’s time. Moreover,
because the project marketing and sales process requires meetings with
customers, meeting scheduler tools can be helpful. For example, Teams
was increasingly used in Mechtro’s activities to discuss and schedule
appointments with potential customers. Finally, contract signing tools
have useful functions in negotiating contracts. They enable remote
signing and the signing process by automatically requesting them from
parties to a contract. Some tools in this category (e.g., DocuSign) can
even help formulate contracts by checking spelling and identifying un­
clear terms, based on the tool’s own database. However, no contract-
related tools were mentioned in the interviews.
It would be nice to get some automation tools, for example, when
calculating the offer. Documents that customers send are always a bit
different, but it could be useful to standardise and automate the process
somehow. (Sales manager 3)
We have had some analytical tools on top of Teams. It has improved issues
and there you may find information rather easily. You don’t necessarily
even recognise it but see it as a one tool that simplifies your life. (Sales
manager 1)
As a final point, CRM tools are comprehensive and often contain
many digital marketing functions that can be used throughout the
project marketing process. They can store all customer data from the
first contact until time to sign a contract, which is very helpful for
salespeople. CRM also enables better information flow across sales and
other supplier functions, as all parties can use the same CRM and follow
the same information about each customer. This consistency helps the
supplier organisation keep updated and better understand customer
needs when offering customised solutions. The need for a proper CRM
tool was mentioned most frequently by the salespeople in Mechtro,
particularly because it could help with the storing and sharing of
customer information in all project marketing stages. Some internal
servers and office programs were currently being used to store this kind
of information, but the aim is to be more systematic by using a specific
tool in the future. As the project marketing process is often lengthy, the
CRM tool was considered helpful in following up with customers and
sharing information among all the relevant functions of the company in
all stages. One concern raised by the interviewees was that when these
kinds of tools are used, they should support your work and not to in­
crease it.
I would say CRM is kind of basic to use and start utilisation. Even simple
things I need to put in my personal phone or Outlook to get that.
Knowledge will also be missing if somebody moves. CRM is kind of like a
database-storing system as well. So if you create a good process that in­
volves inputting a lot of data, then for sure a new person could recheck
everything. (Sales manager 4)
At one point, we had a Microsoft CRM system but back then, the imple­
mentation wasn’t successful. It was poorly coordinated. But when the
implementation is done properly, I don’t see any issues. Of course it
shouldn’t increase the workload. (Sales manager 1)
5. Discussion
In this study, we conducted qualitative research in two phases to
explore digital tools that are available for project marketing and to
connect them to each stage of the project marketing process in a case
company. Next, we present answers to our research questions, followed
by a review of contributions to existing knowledge, managerial impli­
cations, and limitations and avenues for further research.
10
Project Leadership and Society 4 (2023) 100091
5.1. Utilisation of digital tools in project marketing
The first research question was as follows: What kinds of digital tools
can be used in project marketing? In our research of Phase 1, we found
117 digital tools, which we placed into 11 categories, that can be used in
project marketing. Table 2 shows the categories, their definitions, and
the explicit digital tools that are suitable for use in project marketing.
The second research question was as follows: How does a project sup­
plier utilise digital tools in its project marketing process? The data
collected in Phase 2 enabled us to reach an understanding of Mechtro’s
project marketing process and how digital tools are utilised (see section
4.2). Then, we synthesised the results of Phases 1 and 2 by connecting
the identified digital tools and Mechtro’s project marketing process with
the key issues that digital tools can help solve (see Fig. 3 and section 4.3)
to present insight regarding the possibilities of how the tools can be
utilised in the process.
With regard to our findings, although some tools were already being
used in some project marketing stages, we showed the potential for more
extensive use in the future. The potential of digital tools and digital­
isation has been well identified in previous marketing literature (Cue­
vas, 2018; Lilien, 2016) and in project management (Marnewick and
Marnewick, 2022), and it is surprising that in practice the use of them is
still underdeveloped, as seen in Mechtro’s case. Interestingly, the in­
terviewees were rather reluctant about their use, although they
acknowledged their potential.
The results indicate that the use of digital tools in project marketing
tends to depend not only on the ability to use them, but also on attitudes
towards them. A common comment was “these kinds of tools do not
work in our business.” The high customisation rate and the need for
extensive interactions and personal contact with customers were viewed
as the biggest challenges to adopting digital tools and using them in
project marketing. The results indicate that it is not enough to become
familiar with available digital tools; they must be managed and sup­
ported properly inside the organisation. These factors influencing the
adoption of these kinds of tools within companies are in line with pre­
vious studies such as Miklosik et al. (2019), Mahlamäki et al. (2020),
and Proksch et al. (2021). Also, it seems that younger people in the
company use digital tools and their possibilities more frequently and are
more willing to do so than older people. This has also been noted in prior
literature regarding the use of digital tools (Lee et al., 2011; Charness
and Boot, 2009; Kaplan and Haenlein, 2010).
While we explored the range of digital tools and categories, we were
able to gather some insights into which tools may be more important
than others. In Mechtro’s project marketing process, proper CRM was
repeatedly shown to be needed. Also, as seen in Fig. 3, it is clear that
CRM could help in all stages of the project marketing process. In project
marketing, the duration of the sales process may be long (Kujala et al.,
2007; Ryynänen et al., 2013), and it demands storage space for customer
information and other data. Therefore, it seems that CRM, online
communication tools, and social media are especially important cate­
gories at the beginning of the project marketing process and when a
company develops its digital marketing. Still, the needs of the company
will define the most suitable tools. As mentioned above, with a proper
CRM system, almost all needed marketing functions can be done.
5.2. Contributions to existing knowledge
To our knowledge, this study is the first to systematically identify
various digital tools and analyse their potential in project marketing.
The results contribute to project marketing research (Cova et al., 2002;
Tikkanen et al., 2007; Ståhle and Ahola, 2021) by demonstrating the
ways in which project marketing can be updated and conducted in
companies that deliver complex projects. The identification of various
digital tools available for project marketing has not received significant
attention in previous research. These tools can be used to support the
marketing process by increasing the efficiency of information handling
S. Toukola et al.
and potentially saving the amount of time that salespeople spend on the
marketing process.
Digital marketing tools and their categorisation complement what
has been explored in previous studies in B2B settings, such as social
media (Iankova et al., 2019; Fraccastoro et al., 2021), overall knowledge
of B2B marketing (Paschen et al., 2019), and big data analytics (Halli­
kainen et al., 2020). Furthermore, this study is unique because the
majority of marketing studies have not focused on identifying specific
digital tools. Also, our estimation regarding what tools might be the
most important to start with when a project supplier is considering
digital marketing is a response to a question raised by Steward et al.
(2019) that it would be beneficial to research which types of digital tools
are most valuable in the marketing process.
In addition, with the rapid development of tools and different tech­
nologies, their usefulness may vary, and other tool categories may
become much more important for project marketing. As seen in the in­
terviews, it is believed that some tools, especially regarding offers, are
not working in project marketing where complexity, personal relation­
ships, and high customisation exist (Artto and Kujala, 2008; Cova et al.,
2002). However, we see that tools have potential to become more
emphasised in the future, due the development of artificial intelligence
(AI) and machine learning (ML) (see e.g., Syam and Sharma, 2018;
Davenport et al., 2020; Paschen et al., 2019), which may help in the
complex environment of project marketing. The possibilities of AI and
ML are also recognised in project management literature (e.g., El Khatib
and Al Falasi, 2021; Wijayasekera et al., 2022; Marnewick and Marne­
wick, 2022).
We highlighted the importance of social media communication,
which has been a topic of project studies (Ninan et al., 2019; Zhang
et al., 2018), and the need for centralised communication through social
media (Toukola and Ahola, 2022). Centralised communication with
customers was not clearly shown in Mechtro’s marketing process, while
its dependence on individual sales managers was high, which could be
improved by using the digital tools presented in this study. We suggest
that social media could be more extensively used in project marketing,
for example, when communicating the references of companies (Sal­
minen and Möller, 2006; Jalkala et al., 2010) and, thus, when building
the market positions of project suppliers (Ahola et al., 2013; Görög,
2016).
BIM- and GIS-related studies in project management have focused on
areas other than marketing, such as collaboration (Oraee et al., 2019;
Papadonikolaki et al., 2019) and design (Liu et al., 2017). Our study
showed that BIM and GIS are also relevant to project marketing because
they can help suppliers visualise and calculate the prices of their offers,
especially at the bidding stage. Furthermore, while the study contributes
mainly to project marketing (Turner et al., 2019; Ståhle and Ahola,
2021; Kujala et al., 2007), it also offers insights for project front end
(Edkins et al., 2013; Martinsuo, 2019; Matinheikki et al., 2016; Williams
et al., 2019) by underscoring the importance of the beginning of the
relationship between project supplier and customer, allowing the proj­
ect to proceed. Also, the relevance of digital tools during project front
end is highlighted: since uncertainty and lack of information are notable
in the front end (e.g., Kolltveit & Grønhaug, 2004; Williams and Samset,
2010), the study offers avenues for minimising these issues through the
use of digital tools.
5.3. Managerial implications
The findings of this study have many interesting implications for
managers. First, the categorisation of digital tools (Table 2) can be used
to identify the current state of their marketing processes regarding the
use of digital tools. This can help them fully understand and manage the
current tool portfolio of the company. Second, the identification and
categorisation of available digital tools can help managers understand
new possibilities that digital tools offer and select those that are suitable.
The importance of managers being aware of these possibilities is also
11
Project Leadership and Society 4 (2023) 100091
acknowledged in the literature (Marnewick and Marnewick, 2021;
Steward et al., 2019). Third, the project marketing process and its key
aspects, as presented in the case company, have important implications
for managers to enhance the marketing process in general. The project
marketing process is divided into distinct stages: project marketing
strategy development, market screening, preparing for bidding, making a bid,
and negotiating a contract. Digital tools have the potential to connect
these stages, thus offering significant opportunities for managers to
enhance their project marketing process (see Fig. 3). Overall, this study
offers novel perspectives and possibilities that can be exploited in
project marketing.
5.4. Limitations and future research
The limitations of this study concern the empirical methodology and
the setting. Furthermore, there is a need for additional research to in­
crease the generalisability of the results (Yin, 2014). We aimed to report
our research path from the research questions to the end of the study as
clearly as possible to increase the validity of the study (Yin, 2014).
However, possible threats to validity were the search for digital tools
and the anonymisation of the case company. Nonetheless, both phases of
the study were conducted as accurately as possible, which may have
strengthened the external validity, at least to some extent (Gibbert and
Ruigrok, 2010).
As stated in the introduction, the development of digital tools has
progressed rapidly. While data for this study were collected mainly
during 2020, we note that there may have been changes in the functions
of the tools that affect their categorisation. Moreover, if the search for
digital tools were conducted now, it is likely that results would reveal
more tools and categories. Furthermore, because the project marketing
process in the case company could have been developed further through
continuous digitalisation, different results might be obtained if the study
were conducted more recently. We also understand that studying a
single case, with a limited number of interviews, raises some concerns
regarding validity and reliability.
We recommend three interesting directions for future research. First,
similar studies with multiple case settings based on quantitative
methods could result in many additional insights, and the results would
be more generalisable than those of the present study. Through our data,
we were not able to make conclusions, for example, on how the use of
various digital tools would contribute to the project marketing success of
companies. A fruitful avenue of future research would be to bridge the
gap between project marketing success and the use of these tools so that
the most suitable tools in various contexts could be better validated.
Second, focusing on the use of digital tools—why some tools are used
and others are not—would offer interesting perspectives for the future
development of both the marketing process and new digital tools. Third,
although this study focused on the project front end, excluding opera­
tions and the post-project phases, which are also important in project
marketing, we emphasise the need for research regarding the project
marketing process and opportunities to use digital tools in the stages
that follow the front end of projects.
6. Conclusion
In this study, we focused on the use of digital tools for project mar­
keting and gained insights into the digital project marketing process
employed by a project supplier. The study was divided into two phases;
in Phase 1, we searched for publicly available digital tools that can be
used in project marketing, and in Phase 2 we conducted a case study
concentrating on the project supplier’s (Mechtro) project marketing
process. The research contributes novel knowledge by offering a holistic
view of available digital tools suitable for project marketing and cate­
gorising them into 11 categories with 117 individual tools (see Table 2).
We also examined the digital project marketing process, identifying
opportunities for utilising digital tools in each stage (see Fig. 3). The
S. Toukola et al.
results underscore the necessity of rethinking project marketing in the
new digital era, as companies may require innovative practices and tools
to attract potential customers and manage their marketing process
effectively. Overall, the identification and categorisation of digital tools,
and connecting them to the traditional project marketing process pro­
vide a foundation for enhancing both project marketing and its research.
Declaration of competing interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
the work reported in this paper.
Data availability
The data that has been used is confidential.
Acknowledgements
This research has been supported by the Citizens as Pilots of Smart
Cities (CaPs) research project (no. 95576) funded by NordForsk and by
the ROBINS research project funded by Business Finland 2019–2022
(document numbers 7885/31/2018 and 7802/31/2018).
Appendix A. Information sources of Phase 1’s tool search
1) Examples of Google keyword search
Digital tools for sales.
Marketing tools AND digital.
Digital AND sales AND marketing.
Digital project tools.
Digital AND project.
2) & 3): examples of web pages and blogs of digital influencers
blog.hubspot.com/marketing/digital-marketing-tools
chiefmartec.com/
en.rockcontent.com/blog/digital-marketing-tools/
mailchimp.com/
neilpatel.com/blog/10-online-marketing-tools-you-need-when-
starting-a-business/
sproutsocial.com/insights/digital-marketing-tools/
technologyadvice.com/crm/
www.bluefountainmedia.com/blog/the-10-best-digital-marketing-b
logs-you-should-be-reading
www.capterra.com
www.g2.com/
www.hubspot.com/
www.itewiki.fi/
www.leadfeeder.com/
www.salesforce.com/fi/?ir=1
www.singlegrain.com/digital-marketing/digital-marketing-trend
s-2020/
www.trustradius.com/
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 Technological Forecasting & Social Change 195 (2023) 122780

Contents lists available at ScienceDirect

Technological Forecasting & Social Change

journal homepage: www.elsevier.com/locate/techfore

The transformative impact of the circular economy on marketing theory

Rana Mostaghel a, b, *, Pejvak Oghazi c, d, Ana Lisboa e
a
Mälardalen University, Sweden
b
Stockholm Business School, at Stockholm University, Sweden
c
Sodertorn University, School of Social Sciences, Stockholm, Sweden
d
Hanken School of Economics, Helsinki, Finland
e
Business and Economics Department at the School of Technology and Management and Centre of Applied Research in Management and Economics (CARME) of the
Polytechnic Institute of Leiria, Portugal

A R T I C L E I N F O A B S T R A C T

Keywords: The circular economy (CE) is growing, and an increasing number of businesses are becoming aware of it. Demand
Circular Economy from customers and new regulations from policymakers motivated many practitioners to transform their business
Marketing models into circular business models. However, academia has not followed the same pace. Considering that the
Strategy
circular economy encloses unique attributes, it is crucially required to re-frame traditional marketing strategy
Theory
theories. This article rigorously investigates marketing theory and practice in the CE, identifies the challenges of
Theory-in-use
Circular Business Model marketing in the CE, and introduces a new definition of marketing and additional stimulus in the marketing mix.
Further, the article provides theoretical and managerial implications.

1. Introduction 2016). Whereas traditional models focus on the extrac­

The sustainability debate is not new. Ever since the emergence of
environmentally conscious consumers in the late 1960s, issues such as
environmental protection, damage prevention, and reflection on the
consequences of one generation's actions for future generations have
been in the spotlight (Leonidou et al., 2010). Nonetheless, this eco-
conscience intensified over recent years and sustainability concerns
from both customers and policymakers pressure changes in different
industries. (e.g., Quoquab and Mohammad, 2020; Weber et al., 2021).
For instance, a study with 1000 Swedish customers revealed that 95 % of
them considered sustainability as an important factor when purchasing
products and services (Insight Intelligence, 2019). Further, countries
such as Sweden or the Netherlands plan to build a waste-free economy
by 2040 (Circular Sweden, 2023) and 2050 (Hope, 2022) respectively.
France already requires companies to recycle, reuse or donate their
unsold products (Hope, 2022).
A circular business model is “one in which a focal company, together
with partners, uses innovation to create, capture, and deliver value to
improve resource efficiency by extending the lifespan of products and
parts, thereby realizing environmental, social, and economic benefits”
(Frishammar and Parida, 2019, p. 4). Circular business models (CBMs)
differ substantially from traditional business models (Bocken et al.,
t–produce–use–dispose of the lifecycle, encapsulating the product “end-
of-life” concept, CBMs follow the closing the life cycle principle
(Kirchherr et al., 2017). In this regard, CBMs encourage material and
product reduction, reuse, recycling, and recovery (Genovese et al.,
2017). To do so, firms need to rethink their operations and find ways to
eliminate waste, replace finite resources with renewable resources, and
consider the extension of product lifecycles (MacArthur, 2013). H&M's
campaign of textile recycling or Gina Tricot's RENT your party outfit
initiative are some illustrative examples of such ways (Mostaghel and
Chirumalla, 2021).
The shift toward a circular economy (CE) represents an “economic
and value win-win approach” to dealing with resource scarcity and
waste disposal (Homrich et al., 2018, p. 534). It also represents an ac­
ademic understudied area. Marketing definitions and practices need to
constantly evolve to keep abreast of market developments and meet the
expectations of diverse stakeholders. However, there is still work to be
done in incorporating CE and CBM in this regard. For instance, there are
still no clear standards for the value proposition of a CBM (Stål and
Corvellec, 2018). This may raise doubts concerning organizational sus­
tainability reports (Berglund and Sandström, 2013; Lewandowska et al.,
2017) and make it difficult to retrieve information on the circularity of
firms' activities (Insight Intelligence, 2019). Moreover, while authors

* Corresponding author at: Mälardalen University, Sweden.

E-mail addresses: Rana.mostaghel@sbs.su.se (R. Mostaghel), Pejvak.oghazi@sh.se (P. Oghazi), ana.lisboa@ipleiria.pt (A. Lisboa).

https://doi.org/10.1016/j.techfore.2023.122780
Received 17 June 2022; Received in revised form 3 August 2023; Accepted 4 August 2023
Available online 12 August 2023
0040-1625/© 2023 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
R. Mostaghel et al. Technological Forecasting & Social Change 195 (2023) 122780

such as Sanclemente-Téllez (2017) and Vadakkepatt et al. (2021) pro­ To determine the databases and keywords to include in the study, we
vide an overview of the marketing-sustainability relationship concerns, established a panel of three experts. What regards databases, we selected
there are still issues to be addressed. Notwithstanding the existing four (Web of Science, Scopus, EBSCO, and Science Direct), based on
literature advances on understanding CE and CBM concepts, relevance, their reliability in indexing highly ranked journals, to preclude the
and challenges (e.g., Kalmykova et al., 2018; Kirchherr et al., 2018), the exclusion of influential and relevant articles in the final profile (cf.
existing perspectives on marketing in a circular economy are frag­ Mostaghel and Chirumalla, 2021). For the keywords, we chose “retail”,
mented. This fragmentation is apparent in the multifarious approaches “marketing”, “sustainable”, “green”, and “circular”. We opted to focus
to marketing in the CE. For instance, some studies suggest the integra­ on the retail industry due to its key role in the supply chain (Lange and
tion of all aspects of sustainability (i.e., environmental, economic, and Velamuri, 2014) and its contribution to economic labor and growth
social) in the marketing mix (e.g., Vadakkepatt et al., 2021). Others (Tambo, 2014). Over recent years, retail faced changes, namely
suggest measuring the impact of firms' circularity level on purchase emphasizing sustainability, an increasingly pertinent factor in customer
intention (Papadas et al., 2019). For most research agendas and execu­ purchases (e.g., Confente et al., 2020). The keyword search was con­
tive decisions, this ambiguity is harmless. However, CE is the new ducted on March 4, 2022.
normal, and an organic marketing theory will enlighten marketers and In order to include all possible combinations and variations of the
assist them to build a CE-suitable competitive advantage and market keywords, we used Boolean operators (AND) and a wild card (*). The
position. specific queries used in each database are available in Table 1. To secure
In such a context, the purpose of this study is threefold. The first aim the quality of the articles, we limited the results to English, academic
is to identify the existing theoretical and empirical changes in marketing peer-reviewed articles in business, management, and economics (cf.
that address the transformation of economies into circular economies. Mostaghel and Chirumalla, 2021). Given the extensive number of arti­
The second aim is to ascertain the critical factors necessary for mar­ cles obtained by initial searches, no additional keywords were added to
keting theory in the circular economy. Lastly, this study proposes a new decrease the search bias (cf. Mostaghel and Chirumalla, 2021).
theoretical view of marketing that meets the requirements of the circular The search, including all the filtering options, resulted in 8 articles in
economy. Thus, our study seeks to answer the following research EBSCO, 170 articles in SCOPUS, 947 articles in Science Direct, and 9 in
questions: Web of Science, for a total of 1134 articles. These articles were stored in
EndNote 20 and Microsoft Excel spreadsheets.
RQ1. What is the position of marketing in the circular economy in the
Next, we removed all the duplicates in EndNote leaving 1114 arti­
academic literature?
cles. After these steps, we proceeded with the filter based on the titles
RQ2. What are the current challenges facing marketing in the circular and keywords, resulting in 712 articles. Then, we read the abstracts,
economy? reducing the number of articles to 313. Finally, reading the entire article
resulted in a final profile of 26 articles. All articles without a clear focus
RQ3. How does marketing theory need to evolve to serve the circular
on marketing in the circular economy as, for example, Muposhi et al.
economy?
(2022), were removed at this stage.
The organization of this paper is as follows. After this introductory
section, Section 2 provides an overview of the research method. Section
3 discusses the state-of-the-art of marketing in the circular economy and Table 1
pinpoints the leading researchers in this area. In Section 4, we propose a Queries and steps used for the search in the databases.
new theoretical view of marketing in the circular economy. Finally, Database Query Refined by
Section 5 provides the discussion, conclusions, theoretical and mana­
Web of (ALL = (“marketing strategy”)) Articles, English, Economics,
gerial implications, as well as limitations of the study, and delineation of science AND ALL = (“circular Business, Management, Materials
avenues for future research. economy” or sustainability or Science Multidisciplinary, and
green) AND ALL = (Retail*) Engineering Industrial,
2. Methods EBSCO “marketing strategy” AND Peer-reviewed Articles, English,
“retail*” AND (“circular
economy” OR green OR
In this research, we employed two research methods. First, we con­ sustainability)
ducted a systematic literature review to understand the current theori­ Science “marketing strategy” AND Articles, English,
zation of marketing in the circular economy. Then, we employed the Direct “retail*” AND (“circular
economy” OR green OR
theories-in-use (TIU) approach. TIU is especially valuable in construct­
sustainability)
ing organic marketing theories, particularly with regard to emerging Scopus “marketing strategy” AND Business Management and
phenomena. Furthermore, this approach is recommended to extend (“retail” or retailer or retailing) Accounting, Articles, English
perspectives and address ambiguities. Next, we present each method in AND (“circular economy” OR Language
detail. green OR sustainability.
Web of (ALL = (Marketing)) AND ALL Articles, English, Green
science = (circular*) Sustainable Science Technology,
2.1. Systematic literature review Economics, Business,
Management, Materials Science
A systematic literature review and bibliometric analyses assist in the Multidisciplinary, and Engineering
Industrial, Green, Economic,
identification of themes in the existing literature (Chauhan et al., 2022;
Business,and Management
Kunisch et al., 2018). EBSCO All Fields: ((“marketing AND Peer reviewed, and Academic
(“circular*”) Journals, English, Reading,
2.1.1. Search protocol Remove duplicates
For the systematic literature review, we employed the prevailing Science All Fields: (Marketing and English, Research Articles,
Direct circular) Business, Management and
search protocol, which is an “organized, transparent, and replicable pro­ Accounting, Including only the
cess” (Littell et al., 2008, p. 1). The steps used to retrieve articles are journals in business administration
namely: 1) determination of keywords and databases; 2) search in the Scopus All Fields: (Marketing and Business Management and
selected databases; 3) identification and removal of duplicates; 4) filter circular) Accounting, Articles, English
Language
based on title and keywords; 5) reading of abstracts; and 6) reading of
the entire article (cf. Salvador et al., 2020). Note: Data was retrieved on February 1 and March 11, 2022.

2
R. Mostaghel et al. Technological Forecasting & Social Change 195 (2023) 122780

Acknowledging that the number of articles in the final portfolio was Table 2
rather restricted (only 26), we decided to run the systematic literature Characteristics of the firms involved in data gathering.
review excluding the keyword “retail” to see if we missed any relevant, Company Industry Turnover/ Registered Gathered dataa
or influential articles. number of year
This second literature review was conducted on March 11, 2022, employees
(2022)
using the keywords of “marketing” and “circular*”, as recommended
based on the panel of experts. The initial search, with English language, Case 1 Manufacturing 51 million 2007 Interview with
academic peer-reviewed articles, and the disciplines of business, man­ plastic and SEK the CEO, on
bioplastic goods 25 Zoom, and Sales
agement, and economics as filters, resulted in 1288 articles. Particularly, (B2B) employees Manager, on
EBSCO provided 124 articles, SCOPUS 91, Web of Science 325, and Zoom, in April
Science Direct 707. Removing duplicates in EndNote led to 1129 arti­ and October 2022
cles. The examination of the titles and keywords reduced the number of respectively, 60
min each,
articles to 325. After reading the abstracts, the list was reduced to 165
websitea,
articles. Finally, reading the entire articles to focus on marketing in the sustainability
circular economy and removing articles that ignored this clear focus (e. report (2021)
g., Guy et al., 1994) resulted in a final pool of 33 articles. Case 2 Retailing -Baby 15 million 2017 Interview with
Combining the articles of both queries, 33 and 26, and removing and kid products SEK the CEO, on
(B2C) 10 phone, 30 min,
duplicates, resulted in 52 articles. Thereafter these articles were dis­ employees March 2023
cussed among the expert panel, and 17 articles were removed leading to websiteb.
a final portfolio of 35 articles. There are many studies on sustainability Case 3 Service for the 36 million 1992 Interview with
marketing, green marketing, and corporate social responsibility; how­ elderly (B2C) SEK (2021) the CEO, face-to-
62 face, 30 min,
ever, very limited studies focused on the circular economy.
employees March 2023,
websitec.
2.2. Theories-in-use (TIU) approach Case 4 Highly 9 million 2004 Interview with
innovative SEK the CEO, face-to-
TIU is especially suitable for “identifying and defining important Labtech 10 face, 30 min,
equipment (B2B) employees March 2023,
constructs that reflect the practical world of marketing, including an­ Websitec.
tecedents and consequences of marketing phenomena” (Zeithaml et al.,
2020, p. 35). The process starts with focal research constructs drawn Three additional interviews were conducted with a European Parliament
member and a bank representative.
from the systematic literature review. Following the recommendations a
The websites were accessed latest on December 5, 2022.
of Zeithaml et al. (2020), the identified constructs are examined using b
The websites were accessed latest on March 9, 2023.
case study research. To do this process, we performed the abstraction c
The websites were accessed latest on April 6, 2023.
from raw data, that is say, we pooled several raw data elements into a
higher-order category and assigned a label to it.
Business Strategy and the Environment; and Journal of Business
To be as parsimonious and accurate as possible, we used a multiple
Research. However, when considering the number of citations, the
case study approach and performed interviews for each case (cf. Averina
Journal of Retailing and Consumer Services, Journal of Business
et al., 2022). The range of firms included in the case study varies in
Research, and Business Strategy and the Environment has the highest
industry type, and level of circularity; still, all firms show concern for
sum of citations, with 1237, 416, and 411, correspondingly.
sustainability and have developed strategies to contribute to all pillars of
The literature shows that marketing strategy is a determinant of the
sustainability (i.e., environmental, social, and economic). Table 2 fur­
success or failure of a firm (Palmatier and Sridhar, 2020) and that
nishes details of the gathered data. Specifically, two cases were business-
marketing assists firms to deal with specific market characteristics
to-business (B2B) and two were business-to-consumer (B2C). Addition­
(Papadas et al., 2019). With markets embracing a circular economy, it
ally, we conducted two interviews with a bank representative and one
became clear marketing's important role in the CE (Gandolfo and Lupi,
interview with a European Parliament member, to capture the point of
2021). The emergence of the Green Marketing Orientation concept is an
view of investors and policymakers. All interviews lasted between 30
example of how marketing is mirroring the changing social and business
and 60 min. Further, we gathered secondary data from websites, and
landscapes (Papadas et al., 2019).
sustainability reports (when available) for triangulation and a deeper
Given the circular economy ecosystem, for a firm to succeed in it
understanding of each case.
there should be a well-functioning community, society, and environ­
ment. Thus, many firms took an active role in contributing to all these
3. Results
aspects in various ways. According to the information presented on our
case study firms' websites, Case 1 recently installed charging posts for
This section presents the results of the literature review. The aims
their guests and employees along with their circular offerings; Case 2 has
were to identify the current situation of marketing and its challenges in
a donation program with a local organization; and both Cases 3 and 4
the circular economy.
show respect for the planet and human rights.
3.1. Position of marketing in the circular economy in the academic
literature 3.2. The challenges of marketing in the circular economy

The information from the 35 articles was saved in an SPSS file. It
included the name(s) of the author(s), the year of publication, the title of
the article, the title of the journal, and the number of citations received
by each article from Google Scholar (retrieved on March 13, 2022).
Fig. 1 illustrates the number of citations per journal, based on the
summation of the number of citations of the articles included in the
portfolio. In terms of the articles, the top three journals, with 6, 5, and 2
articles, respectively, are Resources, Conservation, and Recycling;
According to the American Marketing Association, marketing is “the
activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers,
clients, partners, and society at large” (AMA, 2017). Although this is a
widely diffused definition, and frequently reviewed and reapproved/
modified, it neglects a crucial element in present-day lives, which is
environmental sustainability. Considering the diffusion of CE and the
recognition of sustainability as a critical topic nowadays, the first

3
R. Mostaghel et al.
Number of articles per journal
Number of citations per journal
Fig. 1. Number of publications and number of citations per journal.
challenge of marketing in the CE is the marketing definition (Rafi,
2022).
Another issue that needs to be addressed is the fact that current
theories tend to concentrate on the period between the beginning of the
customer journey and the purchase. Hence, marketing theories have
paid scant attention to stages such as product maintenance and disposal
or product recycling (Parsons and Maclaran, 2009). To encompass the
entire product life cycle, from the design and development phase to its
disposal or recycling, firms need to rethink their operations or materials
used and engage in greater collaboration, both internally and externally
(Weetman, 2016).
Another defying issue for marketing in the CE is customer awareness
and adoption. Transition into the CE introduced new sorts of products
such as waste-based products, remanufactured products (Pisitsankkha­
karn and Vassanadumrongdee, 2020) or edible insects (Van Huis, 2020),
which sometimes are not customer appealing. To deal with this, firms
should emphasize environmental, and social benefits and inform their
customers. Our findings are clear about this: firms must raise customer
awareness of their innovative sustainable offerings and their circular
business models. The sales manager from Case 1 stated:
There are two major groups of sustainability-conscious customers:
(1) those who are open to receiving information, and (2) those who are
extremists and position themselves against specific product types or
materials. The latter group is not really open to learning the new solu­
tions in the circular business model.
Similarly, the CEO of Case 2 enlightened that their innovative sus­
tainable offerings are unknown to the majority of customers. Thus, firms
cannot only rely on broadcasting information via websites, they need to
include other communication tools in order to increase awareness of
their investments and activities concerning respect for the planet and
individuals. Some of the examples include collaboration with local
schools and higher education entities, in terms of guest lecturing or
conference/roundtable participation; being present at local fairs, and
meeting their clients' customers (i.e., the end-user) to personally portray
the information. Social media can also be helpful as a communication
tool. Its adoption by a growing group of customers, including the
younger generations (Datareportal, 2023), makes social media an
4
Technological Forecasting & Social Change 195 (2023) 122780
important means to raise awareness and inspire customers toward cir­
cular offerings.
Extant literature emphasizes the customers' crucial role in the suc­
cess of circular business models (e.g., Mostaghel and Chirumalla, 2021).
There are indications that the success of marketing programs could be
dramatically enhanced by educating the carefully selected target market
(Galati et al., 2022; McCarthy et al., 2019; Rundle-Thiele et al., 2008).
Efforts such as “household wasteful behavior”, which relates to con­
sumer behavior at the disposal stage of products, are key in addressing
this challenge (Principato et al., 2021).
4. The circular economy has changed the core of marketing
theory
4.1. Antecedents of transforming into the circular economy
Firms transform their traditional business models into circular
business models for several reasons. Institutional Theory (North, 1990)
emphasizes that human interactions are forced by formal forces (e.g.,
laws and regulations) and informal forces (e.g., social norms and con­
ventions). Different countries are investing in both tracks. On the one
hand, governments are setting rules and regulations in favor of a circular
economy, such as environmental regulations in the USA (Pamulaya,
2022). On the other hand, actions are infusing the concept in all
educational levels from kindergarten to university levels. Increasing
awareness among citizens at all levels builds social norms to some
extent. Thus, (1) regulations and (2) social norms are two major ante­
cedents of the CE transition. The third driver is (3) anticipated perfor­
mance, not only for the focal firm, but also for the stakeholders,
environment, and society. Next, each antecedent is further explained.
4.1.1. Regulations
National governments' and the European Commission's regulations
impose the transformation into a circular economy. The first circular
economy action plan was introduced in 2015 to stimulate the transition
of the European Union (EU) into the CE and there is a global level in this
action plan (European Commission, 2023). The interviewed member of
R. Mostaghel et al.
the European Parliament expressed:
International trade is important for the countries in the EU. Through
different rules and regulations, organizations within the EU and those
trade with the EU have to take steps toward the transformation into a
circular economy.
Even investors require firms to transform their business models into
circular ones. The interviewed bank representative explained that:
We strive to pave the way to a circular economy by setting
measurable goals for the firms and following their achievements in this
regard. This is highly important for our clients who trust our judgment in
investing in the right organizations. Several dialogues with executives
and policymakers secure the knowledge transformation.
4.1.2. Social norms
Social norms are a significant driver of the circular economy. Cases 1
and 2 declared that they transformed their BM into a CBM for the reason
that their organizations truly believe in sustainability. The organiza­
tion's values in these cases are aligned with sustainability goals. This is
reinforced by the results of a global study of 1374 respondents on cir­
cular economy investment motives, where more than 25 % of re­
spondents expressed that they invest in CBM because it is the right thing
to do (Statista, 2019).
4.1.3. Anticipated performance
Smith (2022a) estimated the worldwide revenue generated from CE
in 2026 will be a total of roughly 713 billion USD, which is more than
the double amount in 2022 with approximately 339 billion USD. Many
organizations opt for CBM to improve their firm performance, branding,
and sustainability impact. In this regard, the sales manager from Case 1
explained that:
There should always be an economic motivation for any transition in
business. CBM is a win-win solution for the seller and buyer in the long
term.
4.1.4. Consumer pressure
The majority of customers worldwide took some sort of circular ac­
tion in 2021 such as a) buying new products with recycled properties; b)
buying secondhand products; c) buying fewer products; d) performing a
circular action to extend product life; e) performing a circular action to
manage end-of-life; or f) renting instead of owning (Smith, 2022b).
Among the 2900 respondents of this study, only 7 % had no idea about
the circular economy theme (Smith, 2022b). Thus, knowledgeable
consumers are key in the CE transition. These are the consumers that
tend to choose the offerings from firms that strive to transform into a CE.
To this concern, the CEO of Case 2 asserted:
Due to requests for sustainable products from our customers, we had
to search for new suppliers who could deliver products with recycled
properties.
4.2. Marketing strategy in the circular economy
Considering the acknowledged relevance of circularity in the current
business and research settings, along with the concern to constantly
review marketing definitions and practices to keep pace with market
changes, it seems appropriate to review the definition accordingly.
Given the abovementioned considerations, the identified critical factors,
and the theoretical and empirical changes faced by marketing in the CE,
we put forward a more holistic view of marketing in the circular econ­
omy. Thus, we propose the following definition of marketing:
Marketing is the activity, set of institutions, and processes for
creating, communicating, delivering, and exchanging offerings that
have value for customers, clients, partners, and society at large with
respect for the environment and individuals throughout the life cycle of
the offering.
Building on this definition, we propose extending the existing mar­
keting mix theory. In 1960, McCarthy (1960) proposed the original 4Ps:
5
Technological Forecasting & Social Change 195 (2023) 122780
products, price, place, and promotion. Later, Booms and Bitner (1982)
added participants, physical evidence, and the process of service assembly.
To reflect the circular economy, we propose the addition of planet, per­
son, and profit, transforming the current marketing mix to 10Ps (See
Fig. 2).
4.2.1. Planet
Planet refers to all activities that the firm has embarked on to save
the environment on planet Earth. This is achievable through external
activities, offerings, and internal activities.
(1) External activities are firms' environmentally-friendly activities
outside. These include improvements in supply chain manage­
ment to decrease CO2 emissions. To assist these supply chain CE-
enabling activities, firms can invest in leading technologies such
as Advanced Analytics, 3D Printing, the Internet of Things, Ma­
chine Learning, Artificial Intelligence, and Blockchain (Palcek,
2022). An example of external activity is the adoption of reverse
logistics in Cases 1 and 2. This is a form of supply chain man­
agement that accesses end-of-life products and reincorporates
them into the manufacturer's logistics strategy.
(2) Offerings activities enclose firms' activities and decisions that
allow them to align product/service features with the CE. This
should be considered from the product/service design stage. As
an example, Case 1 chooses renewable materials such as vege­
table fats and oils to include in its manufacture of bioplastics.
Case 2 also employs recyclable materials and opts to use, almost
exclusively, FSC (Forest Stewardship Council)-certified wood,
GOTS (the Global Organic Textile Standard)-certified organic
cotton, and certifications with clearly defined criteria and highly
respected worldwide. Further, Case 2 has also banned the usage
of harmful or dangerous chemicals in the entire production chain.
(3) Internal activities refer to the firms' inside initiatives to align with
CE. As an example of such initiatives, the CEO of Case 1 identified
the installation of solar panels and charging stations for electrical
vehicles. These activities allow the firm to decrease the envi­
ronmental impact on the planet.
4.2.2. Person
Person refers to all activities that the firm has undertaken to secure
social sustainability. This factor entails diversity, safety, and empow­
erment of all stakeholders.
(1) Diversity involves including people from different social and
ethnic backgrounds genders, or sexual orientations. This should
apply to all individuals related to the business in some way, such
as employees or board members. For years, inequality and
discrimination were seen as an opportunity for market segmen­
tation. However, due to the identification of its pernicious im­
pacts, marketing research, education, and practice altered their
approach regarding it (Park et al., 2023). Diversity-embracing
activities are practiced in Cases 2, 3, and 4.
(2) Safety refers to securing the work environment of all involved
individuals. This can be done in multiple ways. For example, Case
1 pursues a better work environment for the employees of their
clients by choosing specific materials to reduce noise in the
workplace and injury to their staff. Case 2 clearly chooses fair
business partners, to secure the safety and security of employees
in the second tier of suppliers.
(3) Empowerment is giving power to individuals. The awareness of
empowerment's importance nowadays led to the emergence of a
literature stream on diversity, equality, and inclusion (DEI) as
bases of individuals' empowerment, regardless of their back­
grounds and origins (e.g., Ferraro et al., 2023). In our case
analysis, we found that Case 2 has children's welfare at the heart
of its business.
R. Mostaghel et al. Technological Forecasting & Social Change 195 (2023) 122780

Fig. 2. Identified themes and dimensions.

4.2.3. Profit
Profit refers to all stakeholders' economic gains, obtained from
transaction, operating, and capital costs reduction.
(1) Transaction costs refer to expenses associated with conducting
economic transactions. These costs decrease with the establish­
ment of long-term relationships. One of CBM's strategies is
slowing the resource loops (Bocken et al., 2016). This means
focusing on eliminating waste, maintaining products/materials in
the value chain for a longer period, and recovering end-of-life
products to further use (Bocken et al., 2016). It is achievable by
producing high-quality products, as done by Rolex and Mielé;
maintaining the same production line, to repair products and
extend their lifetime, as decided by Vitsoe or even discouraging
customers to buy a product if they already have one, as does
Patagonia.
4.3. Consequences of aligning with the circular economy
(2) Operating costs are ongoing expenses related to the day-to-day
business operations. In this sense, Case 1 stated that its
operating costs decreased by installing solar panels. This shows
that producing clean energy not only lowers the business opera­
tions' impact on climate but also lowers operating costs. One
additional example was the impact of Case 1 resource loops
strategy, with recycling allowing a reduction of about 10 % of
production costs.
(3) Capital costs are expenditures that relate to the acquisition or
improvement of assets such as licenses, facilities, or equipment.
These types of costs can be reduced by CBM. For instance, Case 1
strives to deliver the most efficient and economical solutions to its
customers. The firm invests in long-term relationships rather than
focusing short time profits, by renting recyclable products instead
of selling them. This way clients lower their capital costs, as
renting represents operating costs.
The transformation of a business into a circular business model

Fig. 3. Antecedents and consequences of transforming into circular business models with marketing in the circular economy.

6
R. Mostaghel et al.
represents multiple consequences, not only in sustainability impact, but
also in brand equity, and firm performance (see Fig. 3).
4.3.1. Sustainability impact
Sustainability outcomes relate to fulfilling current generations' needs
without compromising the future. To do this, it is key to balance eco­
nomic growth, environmental care, and social well-being (e.g., Vadak­
kepatt et al., 2021). Circular business models strive to close the resource
loops, slowing resource loops or narrowing resource flow (Bocken et al.,
2016); thus, with a focus on the planet as one of the elements in the
marketing mix, they will contribute to environmental sustainability.
Further, the “person” reflects social sustainability, and “profit” relates to
the win-win economic aspects of all stakeholders. Consequently, all
activities have some kind of impact on sustainability.
4.3.2. Brand equity
Brand equity refers to the value premium that customers are willing
to pay for a specific brand. Brands with higher brand equity have greater
positive differential responses in the marketplace (Aaker, 2009). The
implementation of marketing in a CE improves customers' perception of
the brand's quality and desirability. Along these lines, the positioning of
Cases 1 and 2 as green and sustainable producers differentiated them in
the market by addressing the customers' needs with recyclable products.
4.3.3. Firm performance
Finally, firm performance is a measure of how well the firm is per­
forming, which can be measured, for example, in terms of profit, growth,
market value, return, economic value added, or customer satisfaction
(Carroll, 2004). The CE-aligned marketing mix contributes to firm per­
formance (Zucchella and Previtali, 2019) by reducing energy con­
sumption (e.g., Case 1), decreasing production costs (e.g., Case 1), and
increasing market share (e.g., Case 2).
5. Discussion, theoretical and managerial implications
The present study used bibliometric analysis to identify the leading
authors and the most impactful studies in the area of marketing in the
circular economy. The acknowledgment of current practices and the­
ories served as a foundation for a new theoretical perspective. This new
perspective extends the existing marketing perspective, by incorpo­
rating the CE. The theoretical contributions are as follows.
First, the results of this study identified the current circular economy-
adapted marketing practices and theories. This provided an overall view
of the background of marketing in this context. Although Winterich
(2019) proposed a framework for conceptualizing and assessing sus­
tainability and there were advances in sustainable marketing (e.g.,
Vadakkepatt et al., 2021), limited research focused on marketing in the
circular economy.
Second, the literature review revealed some shortcomings in the
existing theories. In particular, current marketing work does not cover
all customer journey steps. In fact, the post-purchase step has largely
been disregarded by current marketing theories. Further, while the
marketing and managemet literatures introduced orientations or ap­
proaches to address social and business landscape changes (e.g., Oghazi
and Mostaghel, 2018; Papadas et al., 2019; Vadakkepatt et al., 2021),
the integration of strategic, tactical, and internal marketing levels still
falls short in using them to position firms in the market.
Third, the present research proposes a new marketing definition, one
that considers the circular economy requirements. Particularly, this
study suggests the inclusion of “person”, “planet”, and “profit”, along
with the other elements of the marketing mix (“people”, “process”,
“physical evidence”, “price”, “promotion”, “place”, and “product”).
From the cases analyzed, it is clear that firms are positioning themselves
based on these three new Ps; however, marketing theory has not evolved
at the same pace. Additionally, the study identifies social norms, regu­
lations, consumer pressure, and anticipated performance as antecedents
7
Technological Forecasting & Social Change 195 (2023) 122780
and sustainability impact, brand equity, and firm performance as con­
sequences of marketing in the CE.
In what concerns managerial implications, the study brings new light
to managers. First, it summarizes the requirements of the circular
economy in terms of marketing, which helps practitioners and execu­
tives to understand them and adapt their strategies accordingly. Second,
the study highlights the challenges of marketing in the circular economy
and alerts managers to develop new collaborations or adapt current ones
with diverse actors in the ecosystem. Finally, it calls attention to the
need of aligning internal activities and marketing aims, in that the entire
business model should align with the marketing goals in the circular
economy. Moreover, a key component in successful marketing in the
circular economy is a competent and dedicated staff, along with moti­
vated managers and leaders.
The study is not exempt from limitations. In fact, the limitations of
this study are similar to the ones of others conducting a literature review
(e.g., Mostaghel et al., 2022) and TIU case study approaches. First, a
possible limitation lies in the keywords employed in the search for ar­
ticles. Even though we ran two separate searchers in four business
administration databases to cover the most relevant and influential
studies, we may have excluded relevant articles that did not employ the
exact keywords we used. Second, due to the nature of our research, we
could not fully examine the identified constructs. Future research can
move forward by using empirical data to test these constructs. This study
is a first step toward a better understanding of marketing in the CE. The
ongoing debate and embracement of CE in several areas of the business
setting evidence its increasing importance, and theoretical and empir­
ical research are sorely needed.
Declaration of competing interest
I, the corresponding author of this manuscript, certify that the con­
tributors' and conflicts of interest statements included in this paper are
correct and have been approved by all co-authors.
Data availability
The data that has been used is confidential.
Acknowledgment
The authors are grateful for the anonymous reviewers' and editors'
dedication, time, and commitment to advancing scholarly discourse.
This paper is partially financed by National Funds of the FCT –
Portuguese Foundation for Science and Technology within the project
“UIDB/04928/2020”.
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Rana Mostaghel (Ph.D.) is a Senior Lecturer at the Stockholm Business School (SBS),
Stockholm University, and an Associate Professor at the Division of Marketing and Strat­
egy, School of Business Society and Engineering, Mälardalen University (MDU), in Swe­
den. Her research interest includes Marketing Strategy, Digitalization, and Circular
Economy. She has published in peer-reviewed international high-ranking journals
including the Journal of Business Research and Psychology and Marketing.
Pejvak Oghazi (Ph.D.) is a full Professor in Business Studies and head of two departments
at the School of Social Sciences, Sodertorn University, Stockholm, Sweden. Professor
Oghazi is also an associate researcher at the Hanken School of Economics in Helsinki,
Finland. He holds an MSc in Industrial Management and Engineering in addition to a Ph.D.
in Industrial Marketing. He has published in peer-reviewed internationbal top-ranked
journals including the Journal of Operations Management, Industrial Marketing Manage­
ment, Journal of Business Research and Psychology and Marketing.
R. Mostaghel et al. Technological Forecasting & Social Change 195 (2023) 122780

Ana Lisboa (Ph.D.) is an Associate Professor of Marketing in the Business and Economics Product Development of the Polytechnic Institute of Leiria. Her research interest includes
Department at the School of Technology and Management of the Polytechnic Institute of International Marketing, Innovation, and Entrepreneurship. She has published in peer-
Leiria, an integrated research member of the Centre of Applied Research in Management reviewed international high-ranking journals including the Journal of Business Research
and Economics, and an associate research member of the Centre for Rapid and Sustainable and Industrial Marketing Management.

9
JID: JPED
ARTICLE IN PRESS [mSP6P;November 29, 2023;22:48]
Jornal de Pediatria xxxx;000(xxx): 1 8

www.jped.com.br

REVIEW ARTICLE

Marketing and child feeding

tia Galea
Ka ~o Brandta,b,c,*, Giselia Alves Pontes da Silva a,b

a
Universidade Federal de Pernambuco (UFPE), Centro de Cie^ncias Me


dicas, Area ^mica de Pediatria, Recife, PE, Brazil
Acade
b
Universidade Federal de Pernambuco (UFPE), Centro de Cie^ncias Me
dicas, Programa de Po
s-Graduaç a
~o em Sau
de da Criança e do
Adolescente, Recife, PE, Brazil
c
Universidade Federal de Pernambuco (UFPE), Hospital das Clínicas, Serviço de Gastroenterologia Pedia
trica, Recife, PE, Brazil

Received 15 September 2023; accepted 18 September 2023

Available online xxx

KEYWORDS Abstract
Nutrition; Objective: To carry out a narrative review on the use of marketing strategies in child nutrition,
Childhood; as well as potential implications for health professionals and children.
Marketing; Data source: Searches were carried out on the PubMed, SciELO, and Google platforms, using the
Breastfeeding; terms “child nutrition” or “industrialized baby food” or “infant formula” or “breast milk” or
Infant formula “breastfeeding” and “marketing”, with original articles, review articles, institutional reports,
institutional position documents and websites considered relevant to the topic being analyzed.
Data synthesis: Children’s food marketing started with the industrialization of food and the
resulting actions aimed at increasing sales and meeting commercial interests. Since its inception
to the present, infant formulas have been the most widely used products, which has impacted
breastfeeding practices. International and national institutions, that care for children’s health,
are searching for strategies to limit the abusive marketing of industrialized children’s foods. Mar-
keting strategies interfere with medical knowledge and actions, potentially influencing the guid-
ance provided by pediatricians to families, and finally, compromising healthy eating practices at
a critical period in life, with possible long-term effects.
Conclusions: Health professionals, especially pediatricians, must provide the best care for chil-
dren and families, and need to maintain the search for quality scientific information, not influ-
enced by conflicts of interest. Updated and critical knowledge on the part of healthcare
professionals can curb marketing strategies that aim to influence their actions.
© 2023 Sociedade Brasileira de Pediatria. Published by Elsevier Editora Ltda. This is an open
access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/
4.0/).

Introduction
To establish the best feeding practices in the first years of
life, national1 and international2 recommendations are that
* Corresponding author. breastfeeding should be offered exclusively until the sixth
E-mail: katia.brandt@ufpe.br (K.G. Brandt). month of life, and then fresh, locally available foods be

https://doi.org/10.1016/j.jped.2023.09.013
0021-7557/© 2023 Sociedade Brasileira de Pediatria. Published by Elsevier Editora Ltda. This is an open access article under the CC BY-NC-ND
license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

Please cite this article in press as: K.G. Brandt and G.A. da Silva, Marketing and child feeding, Jornal de Pediatria (2023),
https://doi.org/10.1016/j.jped.2023.09.013
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K.G. Brandt and G.A. da Silva
introduced, while processed foods should not be offered.1,2
Evidence indicates that there is a change in traditional eat-
ing habits, through the total or partial replacement of fresh
foods with processed foods, which are promoted as a practi-
cal option, making family life easier.2 There is evidence that
the consumption of ultra-processed foods leads to the devel-
opment of an unhealthy nutritional profile and is associated
with the emergence of chronic non-communicable
diseases.2,3 To advertise these and other food products, mar-
keting techniques are used, aimed at family members and
health professionals, informing about health benefits, which
are sometimes inaccurate, such as, for instance, that indus-
trialized baby food promotes better health or better intel-
lectual performance of the child.2
In this narrative review, different aspects related to the mar-
keting associated with children’s nutrition will be addressed.
Child nutrition: marketing, conflicts of interest
and impact on medical education
The impact of marketing strategies on food consumption in
childhood can be exemplified by the global trend of increas-
ing consumption of industrialized baby formulas, to the det-
riment of adequate breastfeeding practices.4 The World
Health Organization (WHO) expressed concern regarding the
increase in the consumption of processed baby foods, point-
ing out the harmful potential of this consumption for the
health of human beings and warning of the great influence
of marketing on the occurrence of this phenomenon.4
The marketing of processed foods focuses on influencing
two main groups: the group of consumers, family members
or those responsible for feeding the children; and the group
of health professionals, prescribers of baby food, and
respected opinion leaders, whose endorsement is essential
for the sale of products.
Medical marketing is associated with the so-called “con-
flicts of interest”, a historically effective way of getting doc-
tors to endorse (consciously or unconsciously) industry
products (pharmaceuticals or food). Conflicts of interest arise
when an interest, recently acquired by receiving a benefit
(material or not), has the potential to unduly influence the
professional’s judgment or action.5 Research confirms that
receiving benefits, whether small or large, provided by medi-
cal marketing, generates conflicts of interest, and has the
potential to compromise the best professional performance. A
survey carried out by the WHO, published in 2022, with the
title “How the marketing of baby formulas influence our deci-
sions about infant feeding”, analyzed the marketing tactics
used by the infant formula industries in eight countries.
Among other findings, the research found evidence confirming
the ability of marketing to influence pediatricians’ knowledge
and attitudes regarding the use of infant formulas.6
Many of the strategies used by the marketing of industrial-
ized baby food, with the potential to influence medical knowl-
edge and practice, are similar to the strategies used by the
marketing of pharmaceutical industries and such strategies
include providing promotional activities associated with con-
tinuing medical education events.7-9 Continuing medical edu-
cation is essential for medical activity, and the marketing of
industrialized baby foods quickly became aware of this fact,
2
[mSP6P;November 29, 2023;22:48]
starting to make educational materials and events available,
aimed at disseminating promotional information about their
products. Although some doctors argue that participating in
educational activities sponsored by industries does not inter-
fere with their professional practice, good-quality scientific
evidence refutes this possibility. A systematic review that
evaluated the possible impact of the interaction of physicians
with the activities offered by industries, found that the partic-
ipation of professionals in sponsored lectures/symposiums
influenced the participants’ behavior, leading them to pre-
scribe more products from the sponsoring industries, even
without there being sufficient evidence to support their supe-
riority. The majority of participating physicians were unable
to identify the presence of inaccurate information about prod-
ucts propagated by the industries.9
Regulation of the marketing of industrialized
baby food in the world and in Brazil
The impact of industrialized baby food marketing has demon-
strated its ability to modify natural eating practices since the
beginning of its existence. One of the first infant foods to be
produced industrially, infant formula, appeared in the 19th
century, due to the need for a product that was safe to feed
babies whose mothers were unable to breastfeed. After
advances in industrial technologies that allowed cow’s milk to
evaporate and condense (making it safer for transportation
and with longer shelf-life), the first milk formulas were devel-
oped. Soon, several companies launched products on the mar-
kets and started marketing campaigns. The campaigns
promoted the products as safe substitutes for breastfeeding
and highlighted the benefits for children and mothers.10 Under
the influence of marketing messages, in the mid-20th century,
the use of formula became the norm, and breastfeeding rates
declined to previously unseen low rates. As a consequence of
the interruption of breastfeeding and the inappropriate use of
formulas, there was an alarming increase in infant mortality,
especially in low-income countries.11
Denouncing this scenario, the book “The Baby Killer” was
released in 1974, written by journalist Mike Muller, in partner-
ship with the philanthropic entity War and Want.12 The book
reports on abusive marketing practices used in low-income
countries and their consequences. “The baby killer” is consid-
ered a historic milestone in the fight to protect natural nutri-
tion (breastfeeding) against marketing interests that
compromise children’s health. In 1995, the first Brazilian edi-
tion of the book was published, translated by Professor Fer-
nando Figueira, president of the Institute of Children’s
Medicine of Pernambuco (IMIP, Instituto de Medicina Infantil de
Pernambuco-Brazil) entitled “O matador de bebe ^s”, and in
August 2023, the third edition was launched, demonstrating
the importance of this problem that is still experienced today.12
Due to pressure from society and considering the evidence
of the damage caused by the marketing of industrialized for-
mulas, the World Health Organization (WHO) launched, in
1981, the International Code of Marketing for Breastmilk Sub-
stitutes, the first document to regulate the advertising and
promotion of sales of food products for children.11 National
legislation, based on the Code, was created in several coun-
tries worldwide. In Brazil, the Brazilian Code of Marketing of
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Infant and Toddlers Food and Childcare-related Products, the
NBCAL, was created, sanctioned as a Law in 2006, and regu-
lated by the executive government as a Decree in 2018. The
NBCAL corresponds to a set of regulations on commercial pro-
motion and labeling of foods and products intended for new-
borns and children up to three years of age.13 After the
regulations, marketing practices that directly targeted moth-
ers were stopped or reduced in many countries, and an
improvement in breastfeeding rates was observed.11 Although
scientific evidence points to the harm caused by consuming
industrialized formulas and the lack of breastfeeding, more
babies are fed with formulas today than at any other time.14
In February 2023, the prestigious scientific magazine ‘The
Lancet’ launched “The 2023 Lancet Series on Breastfeeding”,
a series of three documents on how the importance of breast-
feeding is undervalued by governments and public health,
and how the vulnerability of women and children is exploited
by the marketing strategies employed by the milk formula
industries.14 In one of the articles in the series, entitled,
“Marketing of commercial milk formula: a system to capture
parents, communities, science, and policy”, Prof. Nigel Roll-
ins et al. highlight that a strategy used by formula marketing
is to simplify the challenges experienced by parents, trans-
forming them into a series of problems and needs that can be
solved by purchasing specific products. It also highlights the
existence of strategies aimed specifically at health professio-
nals and scientific institutions, through actions such as finan-
cial support, development of scientific research linked to the
industry and medicalization of feeding practices aimed at
infants and young children.15 Regarding the series published
in The Lancet magazine, members of the IMIP board published
a Letter to Readers, recording that Professor Fernando Fig-
ueira was a pioneer, and they close by highlighting that “Fig-
ueira’s effort to protect breastfeeding, revealing the harmful
commercial practices of companies producing breast milk
substitutes, must be remembered in the face of an unequal
fight against the marketing of milk formula industries”.16
In Brazil, it is the responsibility of the National Health
Surveillance Agency (ANVISA, Age ^ncia Nacional de Vigila
^ncia
Sanita
ria) and state and municipal surveillance organs to
monitor compliance with the NBCAL; however, for this sur-
veillance to be carried out successfully, it is necessary that
civil society and professionals directly involved with health
nutrition and child health, act as partners. In view of the
need for groups that could support compliance with interna-
tional standards for the protection of breastfeeding against
abusive marketing, in 1979, IBFAN (International Baby Food
Action Network) started worldwide, and in 1983, IBFAN Bra-
zil, founded by sanitary doctor Marina Rea.13 Among the
activities developed by IBFAN Brazil, the most important is
NBCAL Monitoring, carried out annually, to verify whether
self-regulation is being complied with by industries, com-
merce and health professionals.17
What marketing does not tell you: potential
negative impacts of using processed foods early
in life
Very different from the claims frequently used by marketing
as a promotional strategy for products (Table 118-26),
3
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processed baby foods are usually not healthy food
options.4,15 Taking into account the new classification devel-
oped by researcher Carlos Monteiro to categorize foods
according to the type of processing involved in their produc-
tion, many industrialized baby foods are considered ultra-
processed27 and, therefore, associated with potential nega-
tive impacts on human health in the short and long term.3,28
The effects of ultra-processed food consumption can be
observed in all age groups but tend to be more of a matter
of concern when consumption occurs at more vulnerable
stages, such as at the beginning of life.29 Industrialized baby
foods are not subject to the same standards that regulate
the commercial promotion of medicines; manufacturing
companies are not required to declare the potential adverse
effects attributed to the use of the products, and they do
not provide adequate information to health professionals.17
The fact that there is no transparency and simplified dissem-
ination of this information, lead doctors to have little knowl-
edge about the potential risks involved in the consumption
of these products, which can compromise the quality of the
medical procedure and the safety of children.30 Promotional
information, attributing greater or better functionality to
the consumption of processed baby foods, is one of the strat-
egies most frequently used by marketing (Table 1). A recent
study that analyzed the reliability of health claims propa-
gated by infant formula industries in 15 countries, proved
the inconsistency of several claims, having found that the
same beneficial effect was attributed to different types of
ingredients, and conversely, different benefits were attrib-
uted to the same ingredient. Most claims were not supported
by scientific references and when there was such evidence,
it was not good quality scientific evidence.30
In addition to unproven benefits, there are potential
adverse effects associated with industrialized baby food.
Although infant formula is the recommended option for
feeding children whose mothers cannot or do not wish to
breastfeed and is considered nutritionally adequate to guar-
antee the growth of babies, its industrial production
requires that multiple components (nutritional and non-
nutritional), coming from different production chains, be
submitted to industrial processing (mechanical, chemical
and physical). Some of the potential adverse effects attrib-
uted to the consumption of ultra-processed baby foods are
related to the industrial processing involved in the
manufacturing.31 The consequences for human health of the
consumption of food products manufactured through multi-
ple and intense industrial processes is a problem that has
been better investigated and understood in recent years,28
therefore, it was not adequately addressed when the guide-
lines and standards for production, marketing and monitor-
ing of baby foods were developed. Currently, all over the
world, ways are still being studied to ensure greater safety
in the production of industrialized baby food.
A few decades ago, it was understood that, for an indus-
trialized food to be considered safe for children, it only
needed to meet the child’s nutritional needs. Thus, in the
Codex Alimentarius published in 1981 and still in force today,
the quantitative and qualitative parameters of nutritional
and non-nutritional components were defined (a task that
currently seems to be much more challenging than imagined
in the past), for the composition of infant formulas (first
products intended for artificial feeding in the beginning of
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K.G. Brandt and G.A. da Silva
Table 1 Health claims propagated by the marketing of infant formulas and contestations from studies and scientific institutions.
Components and health claims
Component: Total composition of the formula
Claim: Equal or similar to HM
Component: GOS and FOS prebiotics
Claim: Prebiotic effect similar to HM
Component: GOS and FOS prebiotics
Claim: Reduce the occurrence of allergies and infections
Component: Synthetic oligosaccharides: 20 -FL and LNnT
Claim: HM oligosaccharides
Component: Synthetic oligosaccharides: 20 -FL and LNnT
Claim: Microbiota similar to that of breastfed infants
Component: DHA
Claim: Contributes to cognitive and visual development
Component: Additional nucleotides
Claim: Better immunological response
Component: Egg phospholipids linked to LCPUFAs
Claim: Lipids similar to those of HM
Component: Triacylglycerols + palmitic acid in the sn-2
position
Claim: Better fat absorption, easier digestion, softer stools
and reduced constipation
Component: Partially hydrolyzed proteins
Claim: Prevention of allergy
Components: Partially hydrolyzed proteins and low lactose
content
Claim: Improvement of infantile colic symptoms
Component: Jataí gum and corn starch thickeners
Claim: Reduce regurgitation
Component: Extensively hydrolyzed protein or free amino
acid use
Claim: Best treatment for cow’s milk protein allergy
Component: Formula for preterm infant.
Claim: Guarantee of safe and adequate weight gain
EFSA, European Food Safety Authority; DGKJ, German Society for Child and Adolescent Medicine; 20 -FL, 20 -fucosilactose; LNnT, lacto-N-
neotetraose; HM, human milk.
life), adopting as a reference the hitherto known composi-
tion of human milk. The Codex also determined that for a
new product to prove “nutritional safety and adequacy”, it
would need to demonstrate, through scientific evidence,
that it was capable of guaranteeing adequate “growth and
development in childhood”.32 For that, the manufacturing
4
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Contestations from scientific studies and institutions
EFSA: It is not possible to produce formula with the same or
similar composition to HM (18).
EFSA: Mixture of oligosaccharides mimicking those found in
HM is not viable. GOS/FOS are not comparable to HM oligo-
saccharides. FOS is not found in HM, GOS in minimal amounts
(18).
EFSA: There is no evidence of any beneficial effect. Studies
carried out with major methodological limitations (18)
DGKJ: Use of terms “human milk oligosaccharides” and
abbreviations such as “HMO” in the promotion of infant for-
mula represents an unacceptable idealization (26).
DGKJ: There is no study that has proven this similarity. It is
not known whether the addition of individual oligosacchar-
ides may be beneficial or pose risks. (26).
EFSA: It seems prudent to add DHA, although benefits beyond
childhood cannot be demonstrated (18).
Cochrane: There is no adequate evidence of a beneficial
effect (19).
EFSA: There is no need to add nucleotides (18).
EFSA: There is no proof of similarity. It is not necessary to
add phospholipids to formulas (18).
EFSA: There is no convincing evidence (18)
ELFE cohort: No cause and effect relationship has been
established; on the contrary, it has been associated with a
greater risk of wheezing and food allergies. (20).
Cochrane: There is no evidence that any dietary treatment is
effective for infantile colic (21).
Cochrane: The use may be considered in non-breastfed
infants, with excessive regurgitation, unresponsive to behav-
ioral measures, # frequency of regurgitation in 2 episodes/-
day (22).
EFSA: Potential " exposure to toxic contaminants, clinical
studies with methodological limitations (23)
Ex vivo study: promoted significant changes in the micro-
biota, with the potential to promote intestinal inflammation
(24).
First Steps: The best treatment consists in maintaining HM,
removing milk from the mother’s and the child’s diet. Use of
formula only when necessary for nutrition. Several products
with similar effectiveness (25).
First Steps: Premature and low birth weight infants have a
risk associated with the use of any formula. Only breast milk
reduces the risk of an unfavorable outcome (25).
company would need to prove, through the evaluation of
some anthropometric parameters, that a group of children
exclusively submitted to consumption of the formula, had
an anthropometric evolution similar to that of a control
group, over a short period of time (about 15 weeks), and
that its consumption was not associated with a greater
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frequency of clinically identifiable adverse effects.32 The
criteria defined for the safety assessment of new infant for-
mulas were simple to achieve, which allowed several com-
panies to launch dozens of infant formulas around the
world. The safety criteria became more limited as knowl-
edge advanced about the particularities of early life, and
about the existence of specific components in human milk,
which were not known in the past.
To understand the risk associated with a suboptimal diet
at the beginning of life, it is necessary to consider the spe-
cific demands of the human body during this period (Figure 1).
In the first months of life, the human infant (more fragile and
immature than other mammals) will depend on the food
offered to them, which must be capable of providing all the
components (nutritional and functional) essential for the
occurrence of the various transformations that will lead
them to reach the capabilities of a healthy adult organism.33
As organs and systems are undergoing accelerated develop-
ment, and as the need for food per kilogram of body weight
is greater than at any other time, this is the period during
which humans are most vulnerable to problems associated
with nutrition. It is noteworthy that during this period, food
must support better development of noble structures and
functions, such as brain development, adequate growth of
body structures and compartments, the development and
regulation of the immune system, and the healthy develop-
ment of the endocrinological and metabolic systems.29
Considering the gastrointestinal tract at the beginning of
life, the environment where food will be introduced, it is
necessary to consider that several structures and functions
will also be undergoing a state of postnatal transformation,
when nutrition ceases to be passive and safe (as occurred in
the intrauterine environment), becoming active and chal-
lenging. Food particles (and non-food particles) can enter
the human body through the intestinal mucosa and have a
systemic effect. At birth, the intestinal mucosa will be
formed by an incipient microbiota (where newly arrived
microorganisms can establish themselves, creating commu-
nities that proliferate, or be excluded by competition), a
thin (or non-existent) layer of mucus, and a layer of epithe-
lial cells, with greater permeability than in adult life.34
Below the epithelial layer, in the lamina propria, a large
number of immune cells will be in the development and dif-
ferentiation phase.34 Evidence suggests that the immature
mucosa at the beginning of life is appropriate for the neces-
sary stimulation of the immune system that adapts to the
external environment, allowing greater transfer of environ-
mental antigens, which whether coupled (in the case of
human milk) or not (in the absence of human milk) to mater-
nal antibodies, will influence the activation and maturation
of the lamina propria immune system.29
Analyzing human milk, a natural food perfected through-
out human evolution, increasing scientific evidence reveals
its complexity and the specificity of the components
intended to help the immature human organism, increasing
knowledge of the gap between it and industrially manufac-
tured foods.26,33 In relation to nutritional components, syn-
thesis by the human mammary gland cells of nutrients that
are specific to humans, with structural and functional char-
acteristics that cannot be found in milk from other mamma-
lian species, stands out.26 In relation to functional
components (Figure 1), discoveries are growing regarding
5
[mSP6P;November 29, 2023;22:48]
the components directly linked to the evolutionary superior-
ity of human beings, capable of modulating the expression
of genes, and the development of noble structures and func-
tions such as the central nervous system, immunity and
microbiota.26,33
Aiming to get closer to human milk functions, in recent
years, infant formula industries have started to add so-
called bioactive compounds.35 In human milk, the com-
pounds are produced by the mammary gland itself, having
been shaped throughout human evolution; for industrial use,
a few similar compounds are extracted from animal and/or
vegetable ingredients, or synthesized by chemical pro-
cesses. Although some compounds (such as prebiotics and
lipids) have been approved for optional inclusion in infant
formulas and are generally considered safe, they are not
mandatory components, as there is yet no scientific proof
that they result in health benefits. Despite the lack of scien-
tific evidence, the marketing of infant formulas often uses
these optional components to make claims of different ben-
efits, clearly violating the Code, making comparisons
between the synthetic components in formulas and the ben-
efits of natural components in human milk.30
The incorporation of components aimed at manipulating
the intestinal microbiota at the beginning of life (for instance,
through the use of synthetic prebiotics) has been one of the
strategies most often used by companies to propagate advan-
ces in the composition of formulas, using the discourse that
this addition would make the products more similar to breast
milk.30,36 The contrast between the limited potentially micro-
biota-modulating components used by industries, and the
diversity of those found in breast milk, is great (Figure 1).
Maternal breastfeeding transfers several live microorganisms
(many unknown) and hundreds of prebiotics (more than 200
types of oligosaccharides), which reflect the interference of
evolutionary forces and the exposures experienced by the
maternal organism throughout her life.37 This wealth of fac-
tors, to date, cannot be reproduced artificially.38,35
Analyzing the potential efficacy and safety of synthetic
prebiotics used in infant formulas, a systematic review pub-
lished in 2018 concluded that, although the research did not
raise concerns about safety, there was yet no robust evidence
to recommend the preferential use of formulas supple-
mented with prebiotics.38 Regarding the specific use of syn-
thetic oligosaccharides similar to those in human milk,
experts have expressed some concern about how the baby’s
microbial community will be affected by the consumption of
just a few oligosaccharides, rather than the complex mixture
found in breast milk.33 In a statement, the Nutrition Commit-
tee of the German Society for Child and Adolescent Medicine
highlights that existing data on the supplementation of infant
formulas with synthetic oligosaccharides are too limited to
make recommendations for their use.37 The Committee con-
cludes that the use of terms such as “human milk oligosac-
charides” and abbreviations such as “HMO” in the promotion
of infant and transition formulas is unacceptable, as they do
not represent what is present in the product, suggesting a
non-existent similarity with human milk, which could weaken
confidence in the superiority of breastfeeding, and calls on
infant formula manufacturers to end this practice.37 It calls
on regulatory agencies to prevent potential violations of
existing legal restrictions on the marketing of infant formula,
and on pediatricians to inform families that the synthetic
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K.G. Brandt and G.A. da Silva

FACTORS RELATED TO FACTORS RELATED TO THE FACTORS RELATED TO THE

HUMAN MILK
Nutritional components:
Macro and micronutrients actively produced
by the human mammary gland or
transferred from the maternal
bloodstream
Bioactive components:
Polyreactive or antigen-specific
immunoglobulins (serum IgA, IgM and IgG)
Pluripotent stem cells
Myeloid and lymphoid cells
Antimicrobial and immunoregulatory
peptides and proteins: lactoferrin,
cathelicidins, defensins, lysozyme
Defense and anti-inflammatory cytokines:
IL-10, TGF-b1, TGF-b2, IL-6 and IFN-g
Soluble CD14 and TLR2 receptors
Probiotic microorganisms of maternal
origin
Human milk oligosaccharides > 200
types
Human milk-derived epidermal growth
factor
Steroid hormones
Autologous proteins
Food peptides from the maternal
diet
Human milk phospholipids
Micro RNA and exosomes
Positive epigenetic influence
INDUSTRIALIZED FORMULA
Mandatory nutritional components
Macro and micronutrients extracted from
different sources (animal and vegetable)
or chemically synthesized
Mandatory bioactive component
Optional bioactive components
Synthetic phospholipids
Synthetic oligosaccharides similar to
those in human milk: 2 types
GOS and FOS synthetic prebiotics
Undesirable factors
Molecules resulting from the use of high
temperatures: AGEs and immunogenic
molecules
Variable digestibility of
macronutrients
Presence of toxic contaminants
Presence of stabilizers and
emulsifiers
Quantitative and qualitative variability of
nutrients
Inadequate monitoring of components
and contaminants
Bioactive components without proven
efficacy and safety
Negative epigenetic influence
PARTICULARITIES OF HUMAN BEINGS
IN THE BEGINNING OF LIFE
Functional and structural immaturity
Development of the body and noble
organs
Permeable blood-brain barrier
Permeable intestinal epithelial barrier
Immature intestinal epithelial cells and
Paneth cells
Immature Peyer's patches and M cells
Developing intestinal mucosal and
systemic immunity
Propensity for hyperinflammatory
immune response
Intestinal microbiota undergoing implantation
Antigen absorption
Essential nutrient absorption
Immune and metabolic regulation

Figure 1 Factors related to the different types of foods (human milk or industrialized formula) offered and the particularities of
human beings in the beginning of life.23,33,34

oligosaccharides contained in the products are not compara-
ble to those found in human milk.37
Demonstrating how much the existing knowledge about
the use of bioactive compounds in industrialized baby foods
is still incipient, in April 2023, the American agencies NIH
(National Institutes of Health) and FDA (Food and Drug
Administration) published a summary of the workshop where
a panel of experts carried out an initial analysis of the safety
of using bioactive components in infant formulas.35 Bioac-
tive ingredients were defined as “ingredients of non-human
origin that can imitate components typically present in
human milk, not traditionally considered essential nutrients,
but which are believed to have physiological activity, associ-
ated with clinical relevance”. The document highlights the
need to develop research with appropriate methodology,
which can provide reliable results on efficacy and safety,
short and long-term effects, and the occurrence of serious
or irreversible adverse effects.35 The panel recommends
that, when selecting variables to measure outcomes, such as
neurodevelopment, bioindicators should be evaluated,
which detect the response of the specific component in the
biological system, such as the brain. To improve the accu-
racy of information, such as the time of use to obtain the
effects, it recommended that the results should be repeat-
edly evaluated, throughout and at the end of the interven-
tion in childhood, as well as after childhood.35
It is known that one of the problems (not resolved with
currently existing technological resources) regarding the
quality of nutritional components is the fact that they are
heterologous to humans, being obtained from different sour-
ces (animals, vegetables, chemical processes), unlike what
occurs in breast milk, which has species-specific components,
actively produced by the human mammary gland cells.
Regarding quantities, the Codex establishes minimum and
maximum limits for macro and micronutrients, and it is the
responsibility of the manufacturing companies to ensure that
products are maintained within these parameters during all
stages of product manufacturing and distribution (from the
finished product in the industry, through shelf life, until the
product is reconstituted for consumption). Although the
quality and quantity of nutritional components in products
are often claimed (which are usually just complying with
existing recommendations), studies indicate the existence of
discrepancies between the values reported by the manufac-
turer and those found in the performed analysis.39
Another problem, which is very little reported, is the
existence of potentially harmful substances (in smaller or
larger quantities), such as contaminants and chemical resi-
dues, introduced (intentionally or unintentionally) through-
out the production chain.40 Even in relation to the infant
formula production process, which has regulations to mini-
mize the risk of contamination, studies indicate that there
are flaws so potentially harmful levels have been identified
in studies carried out in different countries.41,42 A fact that
can generate undesirable results in the composition of infant
formulas is the need to undergo several stages of industrial

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processing, which aim to guarantee aspects related to the
safe consumption of the product over time (such as reducing
microbiological and chemical contamination), but also
related to commercial interests (improving appearance,
facilitating transportation and increasing shelf life).43 It is
known that such processing, especially the use of high tem-
peratures, can modify the structure of nutrients (interfering
with their bioavailability) and result in the formation
(through the Maillard reaction) of potentially toxic contami-
nants, such as advanced glycation end products (AGEs), asso-
ciated with long-term consequences, such as diabetes,
kidney failure, neurodegenerative and eye diseases.31 Con-
trary to expectations, AGEs are present in infant formulas at
even higher levels than in other dairy products.41
International agencies that regulate food production are
aware of the need to restrict and monitor the levels of
chemical contaminants in foods, especially those consumed
at the beginning of life, recognizing that there are still flaws
in this surveillance and that the capacity to monitor the
safety of foods produced in each country may vary depend-
ing on the available resources.40 In 2021, due to alarming
news published in the media about the presence of toxic lev-
els of heavy metals in many baby foods, the American Con-
gress launched “The Baby Food Safety Act”, proposing to
turn into a Law that control the presence of these metals in
food for babies and young children. In 2022, the FDA
launched the “Closer to Zero” program aiming, through
research, regulation, and consultancy, to reduce the pres-
ence of contaminants to close to zero, especially in baby
foods; however, to date, little or no involvement has been
recorded on the part of the producing industries.44
Final considerations
The human body in the maturation and development phase
needs to receive adequate care, so that the growth and
development process can occur satisfactorily, with nutrition
playing a fundamental role in this process. To achieve this,
an entire support structure needs to be present and offer
the child optimal conditions to become a healthy adult. The
family and the health sector (the pediatrician in particular)
play an important role in this initial support network.
Pediatricians need to have good humanistic and scientific
training so that they can make the best choices in relation to
the children (and families) for whom they care. The initial
training is important, but the speed at which new informa-
tion appears in the field of medicine requires constant
updating. Therefore, one needs to pay attention to the sour-
ces where they seek information and have a critical spirit to
incorporate quality information as knowledge.
Medical marketing needs to be ethical, but it is often dis-
torted and becomes advertising. In relation to baby food, it
has been observed in recent years that the marketing of baby
food industries has started to occupy a space similar to that
already occupied by pharmaceutical industries, including the
use of similar tactics. Sometimes a relationship is established
between industry representatives and the physician that dis-
closes a conflict of interest. To prevent this from happening,
limits must be observed. How to recognize and incorporate
these limits? The way forward is to have good medical and
scientific training and the ability to criticize.
7
[mSP6P;November 29, 2023;22:48]
Exclusive breastfeeding in the first six months of life, and
continued until two years or more is one of the strongest con-
sensuses in pediatrics. A healthy complementary diet, with
fresh foods, is the way to continue nurturing the good trans-
formations that started with breastfeeding. There are excep-
tional situations, where an industrialized food (such as infant
formula) may be necessary. In these situations, the pediatri-
cian must be prepared to provide the best guidance, based on
the best possible sources of information. The pediatrician is
the subject of the action. If this rule is followed, the impact
of marketing on infant nutrition will be minimized.
Conflicts of interest
The authors declare no conflicts of interest.
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 Industrial Marketing Management 115 (2023) 266–280

Contents lists available at ScienceDirect

Industrial Marketing Management

journal homepage: www.elsevier.com/locate/indmarman

Managerial mindset effects on international marketing strategy

adaptation decisions
Christina Papadopoulou a, *, Aristeidis Theotokis a, Magnus Hultman b
a
University of Leeds, United Kingdom
b
Goodman School of Business, Brock University, Canada

A R T I C L E I N F O A B S T R A C T

Keywords: This research investigates how managerial implicit theories—people’s implicit beliefs about the malleability of
International marketing strategy adaptation human characteristics—affect international marketing strategy adaptation decisions among B2B exporting
B2B decision-making process managers. Building on mindset theory and the international marketing literature, we hypothesize that managers
Fixed mindset
with a growth mindset will opt for higher levels of marketing strategy adaptation while fixed-mindset managers,
Growth mindset
Implicit theory
who believe in the immutability of human traits, will likely standardize across markets. Across two experimental
Ambiguity tolerance studies that manipulate mindset, we test these hypotheses and their underlying mechanism and boundary
Psychic distance conditions. The results of Study 1 show that mindset affects lifestyle adaptation intentions for individuals in
Experimental vignette methodology general, thus establishing the baseline relationship. Study 2 finds that business-to-business international mar­
keting managers exposed to a growth (fixed) mindset are indeed more likely to adapt (standardize) their in­
ternational marketing strategy toward foreign markets. We further show that mindset affects ambiguity
tolerance, which in turn affects adaptation decisions, and that the effect of mindset is dampened (strengthened)
under low (high) psychic distance conditions. This research enriches the international marketing literature by
showing a managerially relevant antecedent of international marketing strategy adaptation decisions and ex­
tends implicit theory by showing a behavioral outcome of mindset.

1. Introduction Despite international marketing strategy standardization versus

International marketers are constantly faced with challenges in
cross-border activities, and these challenges intensified during the
COVID-19 pandemic, which brought major disruptions to almost every
firm and market across the world (Griffith & Yalcinkaya, 2022).
Although digitalization has considerably facilitated international activ­
ity (Katsikeas, Leonidou, & Zeriti, 2019), traditional challenges such as
the diversity beyond national borders remain evergreen (Grinstein,
Hewett, & Riefler, 2022). Business-to-business (B2B) firms seeking op­
portunities for international expansion and profit growth oftentimes
need to make strategic decisions about the degree of adaptation of their
international marketing mix (Lee & Griffith, 2019) for the heteroge­
neous markets they are aiming to enter (Powers & Loyka, 2007). These
industrial markets, unlike consumer markets, are characterized by a
small number of buyers that have different needs and purchase big
product volume (Håkansson & Östberg, 1975). Therefore, international
B2B marketing adaptation decisions are critical to craft and optimize
marketing strategies and maximize performance outcomes.
adaptation being one of the central discussions in international mar­
keting (Griffith, 2021), research has continually called for more up-to-
date and sophisticated studies (Mandler, Sezen, Chen, & Özsomer,
2021), but surprisingly few studies have actually focused specifically on
B2B organizations (e.g., Navarro-García, Peris-Oritz, & Barrera-Barrera,
2016; Viio & Grönroos, 2016). Marketing strategy standardization refers
to consistency in the application of the same marketing processes and
programs across national and international markets (Jain, 1989; Levitt,
1983) and is enabled by the continuous global movement of people,
technological evolution, and homogenization of consumer needs (Grif­
fith, 2010). Conversely, marketing strategy adaptation is related to
consideration of environmental factors in a foreign market to design and
apply tailored marketing strategies (Theodosiou & Leonidou, 2003).
The role of managerial judgment and decision-making ability is
crucial in international marketing research and no longer relies solely on
purely normative or objective assessments (Hultman, Katsikeas, &
Robson, 2011). Given that international marketing decisions ultimately
stem from managerial judgment, managerial decision processes

* Corresponding author at: University of Leeds, United Kingdom.

E-mail addresses: c.papadopoulou@leeds.ac.uk (C. Papadopoulou), a.theotokis@leeds.ac.uk (A. Theotokis), mhultman@brocku.ca (M. Hultman).

https://doi.org/10.1016/j.indmarman.2023.09.014
Received 12 August 2022; Received in revised form 24 July 2023; Accepted 25 September 2023
Available online 14 October 2023
0019-8501/© 2023 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
C. Papadopoulou et al.
undoubtedly hold a key position, with the important role of the manager
as a key decision-maker consistently highlighted in the literature
(Aharoni, Tihanyi, & Connelly, 2011; Cavusgil & Godiwalla, 1982).
Macro-level factors are a useful starting point to understand and predict
strategic decisions, but explaining when, how, and why individual-level
factors shape such decisions in an international marketing domain is
also of particular importance (Diamantopoulos & Kakkos, 2007; Foss &
Pedersen, 2019; Kumar, Borah, Sharma, & Akella, 2021).
In this research, we examine the effect of an individual-level mana­
gerial factor—namely, mindset—on international marketing strategy
adaptation decisions among B2B firms. A widely accepted notion is that
decisions are powered by decision-makers’ mindset. Therefore, drawing
on mindset theory, we aim to experimentally investigate whether, how,
and under what conditions mindset affects B2B managers’ decisions
about international marketing strategy adaptation.
Mindset, rooted in implicit theories, refers to a priori beliefs that
people hold about human qualities (Dweck & Leggett, 1988). The
research stream on mindset has traditionally focused on and compared
two implicit theories or mindsets: entity theory or a fixed mindset and
incremental theory or a growth mindset. Under a fixed mindset, people
believe that human characteristics are fixed, whereas under a growth
mindset, people view human characteristics as malleable (Plaks, 2017).
Mindset is a compelling tool that has helped researchers understand
and evaluate a broad spectrum of behavioral and psychological re­
sponses (Jain & Weiten, 2020). During the past 30 years, research on
mindset across different disciplines has centered on judgment, behavior,
and information processing (Murphy & Dweck, 2016). A few studies
have also investigated the wider influence of mindset in innovation (e.g.,
Ringberg, Reihlen, & Rydén, 2019), branding (e.g., Carnevale, Yucel-
Aybat, & Kachersky, 2018; Mandal, Sahay, Terron, & Mahto, 2021),
and internationalization decisions (e.g., Jiang, Ananthram, & Li, 2018;
Lazaris & Freeman, 2018), while the entrepreneurial mindset in an in­
ternational setting has been under-research (e.g., Andersson & Evan­
gelista, 2006; Felício, Caldeirinha, Rodrigues, & Kyvik, 2013;
Harveston, Kedia, & Davis, 2000). Work in consumer psychology has
mainly examined mindset in the areas of advertising (e.g., Cinelli &
Yang, 2016), charity appeals (e.g., Hsieh & Yucel-Aybat, 2018), and
luxury advertising (e.g., Kwon, Seo, & Ko, 2016). Research has also
investigated the role of mindset in personality (e.g., Burgoyne, Ham­
brick, Moser, & Burt, 2018), product-harm crisis (e.g., Yin, Yu, & Poon,
2016), and financial decision-making (e.g., Rai & Lin, 2019).
Despite the importance of fixed and growth mindsets as drivers of
human behavior and motivation and their ability to address real-world
managerial problems, research on mindsets in the marketing manage­
ment field is still at an early stage (John & Park, 2016; Rucker & He,
2016). Research has thus begun calling (e.g., Murphy & Dweck, 2016)
for managerial mindset studies, as they can provide rich insights into the
design of marketing strategies and provide guidance when entering new
product categories and markets. Moreover, given the tradition in the
literature on international marketing strategy and B2B marketing to
overly rely on cross-sectional research, with all the shortcomings such
approaches entail, establishing actual cause-and-effect relationships is
also a pressing need in this domain (Viglia, Zaefarian, & Ulqinaku,
2021).
To address the aforementioned gaps, we draw on mindset theory to
experimentally investigate the effect of managerial mindsets in B2B
international marketing settings. More specifically, we assess whether
growth-mindset managers are more prone to adapt their marketing
strategy to foreign market ventures and fixed-mindset managers are
more apt to standardize their international marketing strategy. To test
these assumptions, including the mediating mechanism and boundary
conditions, we conduct two experimental studies in which we manipu­
late mindset. Study 1 reveals a significant effect of mindset on general
lifestyle adaptation intentions for individuals who are about to move to a
new country, thereby establishing the baseline theoretical relationship.
In Study 2, we take a B2B marketing manager perspective and find that
267
Industrial Marketing Management 115 (2023) 266–280
international B2B marketing managers in the growth-mindset condition
develop higher marketing strategy adaptation intentions when pre­
sented with a particular export venture scenario than those assigned to
the fixed-mindset condition. Moreover, we answer specific research calls
(Molner, Prabhu, & Yadav, 2019) and uncover ambiguity tolerance as
the underlying mechanism of the effects to show how mindset operates
under different levels of psychic distance. Table 1 presents the aim of our
research, as well how each study addresses part of the overarching goal.
This research extends the B2B and international marketing literature
streams in three ways. First, implicit theory offers valuable insights into
the effects of fixed and growth mindsets on adaptation decisions in in­
ternational marketing. As Table 2 shows, recent empirical research
examining marketing strategy adaptation outcomes has primarily
focused on environmental and internal characteristics rather than the
individual decision-maker. In our study, we move away from the
traditional external micro- and macro-business environment perspec­
tives by zooming in on the B2B manager’s decision-maker role.
Second, our experimental evidence sheds light on the reasons behind
managerial decision-making in a realistic business environment by
introducing a psychological mechanism to a B2B international market­
ing context: ambiguity tolerance. Table 2 shows a distinct lack of
mediating mechanisms under investigation, despite international
adaptation strategies being a prolific research stream over the last half-
decade. To our knowledge, our study is the first attempt to examine a
mechanism that mediates the effect of mindset on marketing adaptation
intentions in B2B settings.
Third, we further strengthen our findings by examining interesting
boundary conditions drawn from the psychic distance literature. This
literature is replete with conflicting results (Ambos & Håkanson, 2014)
and been criticized in terms of its operationalization (Obadia, 2013). In
addition, most studies exploring this construct are survey-based (see
Table 2) and thus prone to various issues otherwise counterbalanced by
experimental data (Viglia et al., 2021). We address these issues by
manipulating psychic distance and by employing an experimental
research design that better unravels the underlying cause-and-effect
relationship.
As Table 2 further reveals, only one empirical study in the last 20
years has focused specifically on B2B companies (Navarro-García et al.,
2016); the overwhelming majority of research has focused on either
consumer companies, taking a hybrid approach (e.g., Gregory, Karavdic,
& Zou, 2007), or declined to disclose the nature of their empirical data
(e.g., Assadinia, Boso, Hultman, & Robson, 2019; Magnusson, Westjohn,
Semenov, Randrianasolo, & Zdravkovic, 2013; Samiee & Chirapanda,
2019; Sousa & Bradley, 2008). Given that B2B marketing is increasingly
relying on international marketing practices to deal with current global
challenges and opportunities (Helm & Gritsch, 2014), focusing specially
on international B2B firms’ challenges is important to determine why
some international marketing practices work and others fail in B2B
settings (Leonidou & Hultman, 2019). Therefore, in response to calls for
B2B research to continuously seek answers to and better explanations of
important international B2B phenomena (Katsikeas, 2006) and conduct
more sophisticated B2B marketing research (Lilien, 2016), we further
offer an important contextual construction with our specific B2B focus in
Table 1
Summary of studies.
Study 1 Study 2
Overarching To investigate whether, how, and under what conditions mindset
aim affects managers’ decisions regarding international marketing
strategy adaptation.
Aim To investigate the effect of To examine the conditions
mindset on adaptation under which mindset affects
decisions among the general managers’ decisions regarding
population and establish the the level of marketing strategy
overall mechanism adaptation
Method Experiment with lay people Experiment with B2B managers
 Table 2

C. Papadopoulou et al.
Past key empirical on antecedents of marketing strategy adaptation in the last 20 years.
Explanatory mechanisms

Study Context Unit of Methodological Antecedents investigated Mediators Moderators Strategy variable Major findings
analysis approach investigated investigated investigated

O’Cass & Julian, Australian Export Survey Firm-specific characteristics, – – Marketing strategy Both firm and environmental characteristics have a
2003 exporters venture environmental characteristics adaptation significant impact on marketing mix strategy
adaptation.
Calantone, US and S. Korean Export Survey Marketing organization and – – Product adaptation Business unit experience positively (negative) affects
Cavusgil, manufacturers venture practice, business unit product adaptation for US (Korea). Environmental
Schmidt, & experience, environmental similarity increases (decreases) product adaptation
Shin, 2004 similarity for Korea (US).
Lages & Portuguese SME Export Survey Prior performance, firm’s – – Marketing strategy Export performance affects the degree of adaptation
Montgomery, exporters venture exporting commitment, export adaptation of product, pricing and distribution.
2004 market competition, export
market development
Calantone, Kim, US, Korean and Firm Survey Firm, industry and market – – Product adaptation Firm (export dependence), industry (industry
Schmidt, & Japanese factors strategy adaptation) and market (market similarity) factors
Cavusgil, 2006 exporters affect product adaptation strategy across all three
countries.
Katsikeas, Samiee, Global UK Product (line) Survey Macro- and micro-environmental – – Marketing strategy A number of macro and microenvironmental factors
& Theodosiou, –based factors standardization are significantly related to marketing strategy
2006 manufacturers standardization.
Gregory et al., Australian B2B Export Survey Internal and external – E-commerce Marketing strategy Product online transferability and e-commerce assets
2007 and B2C venture determinants, e-commerce drivers standardization increase promotion adaptation. E-commerce drivers
exporters drivers moderate the relationship between product
uniqueness and promotion adaptation and between
e-commerce export experience and product
adaptation.
Sousa & Bradley, Portuguese Firm Survey Environmental characteristics, Price adaptation Managerial experience and foreign market
268

– –
2008 exporters number of markets, experience characteristics influence price adaptation.
Hultman, Robson, Swedish Export Survey Macro- and micro-environmental Product adaptation A variety of macro, microenvironmental, and
& Katsikeas, exporters venture factors, internal factors internal, factors drive product adaptation.
2009
Li, 2010 Chinese Firm Survey Organic structural design: Export – – Rigid product Export coordination and process control mechanisms
exporters coordination, export process adaptation decisions reduce rigid product adaptation decisions.
control
Magnusson et al., U.S. exporters Individual Survey Environmental differences – Motivational Marketing mix Motivational cultural intelligence positively
2013 decision- cultural adaptations moderates the relationship between environmental
maker intelligence differences and marketing-mix adaptations.
Navarro-García Spanish B2Ba Firm Survey Perceived psychic distance – Foreign market Marketing mix Greater psychic distance leads to a higher level of
et al., 2016 SME exporters intelligence adaptation strategic adaptations.
Rao-Nicholson & Indian and Firm Mixed methods Brand identity, institutional – – Global marketing Institutional factors have the strongest positive effect

Industrial Marketing Management 115 (2023) 266–280

Khan, 2017 Chinese firms factors, cultural factors strategy adaptation on the global marketing strategy standardization
and standardization among emerging-market firms.
Assadinia et al., UK and Chinese Firm Quasi-longitudinal Export learning process – – Marketing strategy Export learning process is positively linked to
2019 exporters survey adaptation marketing strategy adaptation in both UK and China.
Samiee & Thai exporters Product- Survey Macro- and microenvironmental – – Marketing strategy All the macro and microenvironmental
Chirapanda, market influences adaptation characteristics (except for regulatory environment
2019 venture and marketing intermediaries) have a positive effect
on marketing strategy adaptation.
Khan, 2020 Pakistani Firm Survey Marketing agility – Market Marketing strategy Marketing agility increases marketing program
exporters complexity adaptation adaptation. The interaction effect of market
complexity and marketing agility on marketing
program adaptation is negative and significant.
This study Greek B2B a Individual Experimental Growth vs. fixed mindset Ambiguity Psychic distance Marketing strategy Growth mindset generates adaptation intentions
exporters decision- vignette (manipulated) tolerance (manipulated) adaptation through ambiguity tolerance. The effect is
maker methodology intentions strengthened under high psychic distance.

Note: B2C = business-to-consumer.

a
Focuses on B2B firms in particular.
C. Papadopoulou et al.
conjunction with our study design (Viglia et al., 2021).
In the next section, we outline existing literature on implicit theory
and proceed with our conceptual development. We then introduce our
methodology and experimental research design, after which we discuss
our analysis and results. Next, we present the theoretical contributions
and managerial implications. We conclude with limitations and sug­
gestions for future research.
2. Theoretical background and hypotheses development
2.1. Defining mindset
Mindset refers to “a psychological orientation that affects the selec­
tion, encoding, and retrieval of information; as a result, mindsets drive
evaluations, actions, and responses” (Rucker & Galinsky, 2016, p. 161).
Prior research shows how mindset shapes motivation (Dweck, 1999) and
its effect on different dimensions of human behavior (Jain & Weiten,
2020). Research in the consumer behavior field has also extensively
examined the impact of mindset on effort beliefs (e.g., Lam & Zhou,
2020; Yeager et al., 2014; Zeng & Mourali, 2021).
Many important points arise when assessing the intersection be­
tween mindset and consumer psychology, in the broader spectrum of
psychological literature. For example, the underlying goals that derive
from simple to more complex consumer behaviors, such as purchasing a
cookbook to making lifetime decisions, can vary significantly depending
on an individual’s mindset (Priester & Petty, 2016); specific types of
information may become more prominent, motivating, or significant
than others (Rucker, 2012). These effects have far-reaching conse­
quences, influencing consumer preferences, information processing, and
behavioral choices (Rucker, 2012). For example, the display of inau­
thenticity in the form of fake smiles align more with an interdependent
self-construal, which in turn can influence judgment (Pham, Lechner, &
Mathmann, 2022).
Overall, mindsets such as the interdependent self-construal (Ma,
Yang, & Mourali, 2014) and fixed and growth mindset are known for
their robust, “hard” nature and are considered stable and dispositional
factors that govern human behavior and directly affect judgment and
evaluation (Rucker & Galinsky, 2016). Conversely, “soft” mindsets, such
as smiles, may be largely dependent on boundary conditions, resulting in
less generalizable produced effects (Lechner & Mathmann, 2021).
Beyond the field of consumer psychology, mindset can offer important
insights into the area of international B2B marketing. The study of
managerial mindsets can advance knowledge in various decision-
making processes, such as adaptation, market entry, product develop­
ment, brand extension, and marketing-mix decisions (Murphy & Dweck,
2016).
2.2. Views of human nature
2.2.1. Implicit theories
Implicit theory refers to “the implicit conception about the nature of
ability” (Dweck & Leggett, 1988, p. 262). In other words, implicit theory
captures an individual’s belief that personal abilities and intelligence
can or cannot change. The belief of change versus stability in personal
traits is a fundamental assumption that defines an individual’s world­
view and gives importance and substance to events (Kelly, 1955). The
implicit theory model comprises two distinct theories: incremental
theory and entity theory (Dweck & Leggett, 1988).
In general, people who align with incremental theory accept that in­
telligence is a dynamic, malleable trait that can be developed over time.
A series of studies (e.g., Bandura & Dweck, 1985; Dweck & Bempechat,
1983; Leggett, 1985) have confirmed that individuals who match an
incremental profile pursue learning goals and ultimately develop
challenge-seeking behaviors to develop and increase their abilities and
intelligence (Dweck & Leggett, 1988). Thus, when faced with
demanding situations or failure, incremental theorists strive to improve
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Industrial Marketing Management 115 (2023) 266–280
their performance by developing adaptive strategies and exerting effort
(Dweck, Chiu, & Hong, 1995).
By contrast, people who endorse entity theory hold the belief that
intelligence is a static, fixed, and non-malleable trait that remains stable
throughout life. Moreover, as a driver of goal orientation, entity theory
leads individuals to adopt performance goals to avoid challenging sit­
uations and secure favorable judgment of their innate abilities (Dweck &
Leggett, 1988). In addition, entity theorists are not willing to exert effort
in the face of failure and attribute negative performance to their lack of
abilities (Dweck et al., 1995).
2.2.2. Fixed and growth mindset
The entity theory model, which is aligned with the conceptualization
of mindset, centers on beliefs that people hold about the malleability of
human characteristics (Dweck, 1999) and reflects “an underline psy­
chological process that sets up different cognitive, affective, and
behavioral response patterns” (Dweck & Leggett, 1988, p. 256). The
terms growth and fixed mindset, which are commonly used to charac­
terize incremental and entity theorists, respectively, emerged after de­
cades of research on implicit theory (e.g., Dweck, 2006).
Importantly, mindsets can be chronic, directly changed, or situa­
tionally activated (Dweck, 1999; Murphy & Dweck, 2016; Rucker & He,
2016). For example, an individual may hold chronic beliefs about the
malleability of personal traits and thus has a growth mindset. A growth
mindset may also be temporarily induced if, for instance, researchers
experimentally manipulate it (Murphy & Dweck, 2016).
In general, people with growth mindsets, which indicate personal
growth and development, believe that effort is desirable; by contrast,
people with fixed mindsets focus more on the outcome of a given action
and believe that high effort is not a necessary prerequisite for success, as
abilities are inherent (Blackwell, Trzesniewski, & Dweck, 2007). Mrazek
et al. (2018), for example, found that a growth mindset reduces effort
avoidance and encourages individuals to engage in more challenging
tasks. In addition, research has investigated behavioral outcomes of
mindsets, such as behavioral intentions, preference, and choice, in
various contexts (e.g., Mukhopadhyay & Yeung, 2010; Rai & Lin, 2019;
Septianto, Seo, & Paramita, 2022). Overall, people with a growth
mindset tend to make decisions based on their desire for growth and
challenge, whereas fixed-mindset people seek credence and security in
their decisions (Roy & Naidoo, 2021).
2.3. Mindset and strategy adaptation
Research has studied adaptability in various real-life and business
contexts, such as response to failure (Hong, Chiu, Dweck, Lin, & Wan,
1999), brand extensions (Yorkston, Nunes, & Matta, 2010), entrepre­
neurial success (Neneh, 2012), and computer science education (Mur­
phy & Thomas, 2008). We suggest that fixed and growth mindsets are
linked to adaptation decisions in general, as mindset activates adaptive
or maladaptive behaviors (Dweck & Leggett, 1988) and B2B marketing
strategy adaptation in particular, as it promotes challenging and riskier
behaviors. Individuals with a growth (vs. fixed) mindset are character­
ized as more adaptive, as they respond, for instance, to failure in more
adaptive ways (Hong et al., 1999). Building on this literature, we suggest
that growth-mindset individuals are more willing to adapt their life
strategies when necessary; by contrast, fixed-mindset people are apt to
be less willing to change their habits.
By extension, we further expect that a fixed or growth mindset also
has a significant effect on B2B marketing strategy adaptation decisions.
Assessing how managers’ mindsets control decisions such as entering
new foreign markets is important. Research has generally associated
marketing adaptation strategies with increased costs and risk (Narver,
Jacobson, & Slater, 1999). Taking into consideration that growth-
mindset individuals have preferences for more challenging tasks
(Dweck & Leggett, 1988), they are likely to employ adaptation strategies
to a greater extent than fixed-mindset individuals. Adaptation (vs.
C. Papadopoulou et al.
standardization) strategies require more resources, such as tailored
product designs, new manufacturing processes, and multiple creative
promotional communications, as well as adjustments in price, supply
chain, and distribution strategies (Lee & Griffith, 2019). Logically, such
modifications demand a great deal of additional investment while also
occupying countless resources.
Marketing adaptation strategies have a high level of complexity,
especially in dynamic cross-border markets (Kumar, Sunder, & Ram­
aseshan, 2011). This complexity is further enhanced in B2B markets
given the more complex nature of B2B demand in conjunction with
greater customer heterogeneity and fragmentation (e.g., Coviello &
Brodie, 2001). B2B managers, who hold a central role in marketing
strategy making, are often rationally bounded in their ability to predict
all possible challenges (Hadjikhani & LaPlaca, 2013; Slater & Narver,
1995) associated with adaptation strategies; therefore, the level of dif­
ficulty and the likelihood of failure increase (Lee & Griffith, 2019).
Primarily due to their anticipated level of failure, adaptation strategies
tend to be risky (Cavusgil & Zou, 1994). On the one hand, individuals
with a growth mindset are more willing to engage in riskier behaviors
because even in cases of failure, they acknowledge that an unsuccessful
attempt can provide valuable feedback to perform better in the future
(Elliott & Dweck, 1988). On the other hand, fixed-mindset individuals
are risk averse and also unable to respond effectively to difficult tasks. As
such, we expect fixed-mindset managers to prefer standardization stra­
tegies. Thus:
H1. A managerial mindset affects international marketing strategy
adaptation intentions. Managers with a growth (fixed) mindset are more
likely to adapt (standardize) their marketing strategy across different
markets.
2.4. Mediating role of ambiguity tolerance
Ambiguity tolerance refers to an individual’s cognitive sensitivity to
ambiguous stimuli (McLain, Kefallonitis, & Armani, 2015) and captures
“the tendency to perceive ambiguous situations as desirable” (Budner,
1962, p. 29). Any individual who is tolerant of ambiguity can effectively
cope with risk and uncertainty (Ellsberg, 1961), as well as inadequate,
overcomplicated, or contradictory information (Budner, 1962).
In volatile, uncertain, complex, and ambiguous (VUCA) environ­
ments (Cavusgil et al., 2021), including many B2B markets (Coviello &
Brodie, 2001), international marketing managers are constantly faced
with the lack of available and precise information (Gabrielsson &
Gabrielsson, 2013). Within these business landscapes, individual
decision-makers who have higher levels of ambiguity tolerance tend to
be more comfortable with organizational change (Judge, Thoresen,
Pucik, & Welbourne, 1999) and environmental uncertainty (Galkina &
Chetty, 2015); consequently, they are often successful when making
complex adaptation decisions (Griffith & Hoppner, 2013).
Research has not examined the precise role of ambiguity tolerance in
the adaptation process to a great extent (Andries & Debackere, 2006),
and this may be due to the failure of marketing strategy literature to
account for managerial characteristics in adaptation decision-making
processes (see Table 2). Nevertheless, a few studies have empirically
tested and found that tolerance for ambiguity is an important driver of
marketing strategy adaptation (Pitt & Kannemeyer, 2000), cross-
cultural adaptation (Ruben & Kealey, 1979), and managerial agility
(Nemkova, 2017).
Specifically, as Pitt and Kannemeyer (2000) show, managers who are
tolerant of ambiguous situations tend to prefer a more adapted mar­
keting strategy when it comes to key marketing-mix strategic elements,
such as product, service, and distribution adaptation. In addition, Oba­
dia (2013) found that managers adapt export pricing to a higher degree
when they are confronted with ambiguous information in foreign mar­
kets. He attributes this finding to sense-making that can be triggered by
ambiguity; when managers must make sense of ambiguous information,
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Industrial Marketing Management 115 (2023) 266–280
their actions become more adaptable, and thus export pricing decisions
are more dynamic (Obadia, 2013).
We argue that these research findings on marketing-mix adaptation
are more pronounced when managers are more tolerant of ambiguity.
We agree with Griffith and Hoppner (2013) view that managerial am­
biguity tolerance is a critical asset in strategic adaptation decisions for
two reasons. First, B2B managers who are tolerant of ambiguity make
well-rounded strategic decisions because they are more comfortable
with uncertainty and risk, and second, these managers are better
equipped to make successful marketing strategy changes as they tend to
spend more time scanning the environment. Against this backdrop, we
expect that ambiguity tolerance will affect strategy adaptation de­
cisions, as these are generally characterized by complexity, heightened
uncertainty, and risk (Kumar et al., 2011).
Furthermore, ambiguity tolerance, often conceptualized as a stable
individual personality trait, can be malleable and vary by context
(Endres, Camp, & Milner, 2015; Muehling, Vijayalakshmi, & Laczniak,
2018; Sagioglou & Forstmann, 2013). Previous studies have shown that
within-person variability of ambiguity tolerance across different content
domains can change over time (Durrheim, 1998; Durrheim & Foster,
1997) or vary with experience (Helson & Wink, 1992; Howard & Bray,
1988).
From a cognitive perspective, and as a mechanism of processing,
interpreting, and reacting to information, ambiguity tolerance drives
decision outcomes and may be activated by a psychological orientation
that drives evaluation—namely, mindset. Although research has inves­
tigated the critical role of ambiguity in complex decision outcomes (e.g.,
Tversky & Kahneman, 1981), few studies have examined ambiguity
tolerance as a mechanism of B2B managerial decision-making processes.
We thus propose that growth-mindset individuals who cope better in
uncertain and complex situations (Jain & Weiten, 2020) will naturally
develop higher tolerance for ambiguity and, in turn, be more likely to
favor higher levels of adaptation in their strategic decisions. Considering
this discussion, we suggest the following:
H2. Ambiguity tolerance mediates the effect of a managerial mindset
on international marketing strategy adaptation intentions.
2.5. Moderating role of psychic distance
Perception is a process by which individuals arrange and analyze
environmental stimuli to make sense of their world (Robbins, Judge,
Millett, & Boyle, 2013). In a managerial context, perceptions represent
“one’s construction of reality, as perception serves to distort or filter the
environment, amplifying some elements and attenuating others” (Nebus
& Chai, 2014, p. 13).
Individual-level perceptions of distance refer to the subjective dis­
tance between two entities and are characterized by a dynamic nature
(Baack, Dow, Parente, & Bacon, 2015). Perceptions of distance are
therefore not stable and vary significantly among individuals. In other
words, B2B managers faced with the same problem such as the extent of
adaptation of the marketing mix to a foreign market will likely make
different decisions even when provided with the same amount of envi­
ronmental information.
The managerial perception of environmental differences or similar­
ities between a home and a host country is traditionally defined as
psychic distance (Evans & Mavondo, 2002). Psychic distance has
attracted a great deal of research interest in the field of international
marketing in the past decades, mainly because of the established influ­
ence of perceptual factors on strategic decisions and international
marketing activities (Cavusgil & Godiwalla, 1982; Leonidou, Katsikeas,
& Piercy, 1998).
Specifically, with high levels of psychic distance, perceived uncer­
tainty about a foreign market grows because of a lack of familiarity with
the foreign environment (O’Grady & Lane, 1996). In such cases, man­
agers who do not have adequate knowledge of the host market might
C. Papadopoulou et al.
also be concerned about their ability to adapt, as a flawed adaptation
strategy could result in an unsuccessful and costly effort abroad (Grif­
fith, Lee, Seob Yeo, and Calantone, 2014; Johnson, Lenartowicz, &
Apud, 2006). Therefore, in high psychic distance conditions, the level of
effort to adapt is also high. For manages with a growth mindset, high
effort is desirable and valued as they have a chance to unfold their full
potential and ultimately improve (Murphy & Dweck, 2016). Conversely,
manages with a fixed mindset are traditionally risk averse and not
willing to put in effort, as success, according to these individuals, is
merely the result of inherent capabilities (Murphy & Dweck, 2016).
Consequently, we expect that in a high psychic distance situation, in
which adaptation challenges and implementation risks are heightened
(Johnson et al., 2006), growth-mindset managers will expend deter­
mined effort to employ adaptation strategies. By contrast, in the face of
heightened risk and challenge, fixed-mindset managers will exhibit a
more secure coping strategy, which is the norm when these individuals
are faced with increased difficulties (Jain & Weiten, 2020). Thus:
H3. Psychic distance weakens the effect of mindset on adaptation
intentions.
Fig. 1 depicts our conceptual framework.
Fig. 1. Conceptual framework.
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Industrial Marketing Management 115 (2023) 266–280
3. Overarching framework
3.1. Study 1: the effect of mindset on lifestyle adaptation decisions
3.1.1. Research design and sample
The aim of Study 1 is to investigate the main effect of mindset on
adaptation (H1) by manipulating mindset and measuring lifestyle
adaptation intentions among the general population. According to our
theorization, we expect individuals exposed to a growth (fixed) mindset
manipulation to show higher (lower) intentions to adapt their everyday
lifestyle to the foreign country of their destination. Thus, we use a single
factor (mindset: growth vs. fixed) between-subjects experimental
design. We asked participants to imagine a hypothetical scenario of
moving for work or studies to another country and to answer several
lifestyle adaptation questions. We adapted our scenario from Price,
Coulter, Strizhakova, and Schultz (2017, Study 2b), who investigated
mindset in the frame of transformative change (fresh start). The fresh-
start metaphor is not only widely accepted in contemporary cultures
but also commonly used in marketing communication practices (Price
et al., 2017). Therefore, being semantically related to lifestyle adapta­
tion, it adds authenticity and realism to our study. We recruited 319
adults via Amazon Mechanical Turk. Participants reflected the de­
mographic distributions of the general population and were randomly
assigned to one of the two conditions (fixed vs. growth mindset).
C. Papadopoulou et al.
3.1.2. Mindset manipulation and manipulation checks
To manipulate mindset, we asked participants to read a Psychology
Today–type article (adapted from Chiu, Hong, & Dweck, 1997) that
presented scientific views of either fixed or growth mindsets. The article,
based on prior research studies, portrayed implicit theory in a rigorous
way, without referring to the dependent variables of the study.
Although, in general, individuals are inclined toward one of these
mindset types, they can adopt a particular mindset when presented with
relevant manipulated information (Murphy & Dweck, 2016).
The growth-mindset article described that people’s personality and
mindset constantly evolve and are highly malleable. Moreover, human
traits are considerably dynamic and can even change someone’s char­
acter. The fixed-mindset article outlined a fixed and solid human nature
over a lifetime, stressing the static personality and mindset one develops
during adulthood. Valid and trustworthy research outputs underpinned
each of these viewpoints. Appendix A presents the manipulation stimuli.
After they read the relevant passage, we asked participants to sum­
marize in a few words the essence of the text they had just read. As a
manipulation check, we used the measure of implicit theory (Chiu et al.,
1997), which included three statements: (1) “The kind of person
someone is, is something very basic about them and it can’t be changed
very much”; (2) “People can do things differently, but the important
parts of who they are can’t really be changed”; and (3) “Everyone is a
certain kind of person, and there is not much that can be done to really
change that.” Participants then indicated the extent of their agreement
on a 5-point Likert scale (1 = “strongly disagree,” 5 = “strongly agree”).
The manipulation was successful; participants who read the fixed-
mindset scenario scored higher on the relevant scale (Mfixed = 3.06,
SD = 1.11) than those in the growth-mindset scenario condition
(Mgrowth = 2.60, SD = 1.14; F(1, 317) = 12.96, p < .01). Scores >3 on the
implicit theory scale indicate agreement with a fixed mindset; scores <3
imply compliance with a growth mindset (Huang, Dong, & Mukho­
padhyay, 2014).
3.1.3. Measures
The main outcome variable is lifestyle adaptation intentions. We
adapted Wells and Tigert (1977) scale, on which participants indicated
the likelihood of adapting their lifestyle across different dimension
(recreational, purchasing, and leisure time activities; culinary, media,
and fashion interests; and cultural, political, and social opinions) if they
were to relocate to another country on a 5-point scale (1 = “extremely
unlikely,” 5 = “extremely likely”). We also measured life satisfaction (1
= “extremely dissatisfied,” 5 = “extremely satisfied”) and happiness
(adapted from Hills & Argyle, 2001) (1 = “strongly disagree,” 5 =
“strongly agree”) on a 5-point scale.
3.1.4. Analysis and results
We ran analysis of covariance (ANCOVA) on mindset and lifestyle
adaptation intentions with life satisfaction and happiness as covariates.
The results show a main effect of mindset on adaptation intentions (F(1,
318) = 5.54, p = .019), giving preliminary support to H1. Participants in
the growth-mindset condition reported higher adaptation intentions (M
= 3.51) than those in the fixed-mindset condition (M = 3.33). Fig. 2
illustrates these results.
3.2. Study 2: effect of mindset on international B2B marketing strategy
adaptation decisions
After confirming a significant effect of mindset on adaptation in­
tentions among individuals in general, our goal in Study 2 was to
establish the same effect in a B2B managerial context in addition to
formally testing the hypotheses. Thus, Study 2 examines the conditions
under which fixed and growth mindsets affect managers’ decisions
about the level of marketing strategy adaptation. Moreover, we examine
the mediating mechanism that explains the mindset–adaptation in­
tentions relationship. To test our hypotheses, we conducted an
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Industrial Marketing Management 115 (2023) 266–280
experiment with B2B managers based on an experimental vignette
methodology (EVM), in which we used rigorous and realistic scenarios
written in everyday language (Aguinis & Bradley, 2014). EVM enhances
internal and external validity given its increased realism and therefore is
a suitable methodology for researchers to effectively manipulate inde­
pendent variables and investigate their effect on behavioral outcomes
(Aguinis & Bradley, 2014).
3.2.1. Research design and sample
We used a 2 (mindset: fixed vs. growth) × 2 (psychic distance: low vs.
high) between-subjects experimental design. After running a pretest to
ensure managers’ ease with the content and language of the instrument,
we randomly assigned them to one of the four experimental conditions.
The sample included Greek chief executives and international marketing
managers in the B2B sector who were responsible for their firms’ mar­
keting decisions. Greece heavily depends on exports; >40% of Greece’s
gross domestic product was export revenue in 2021.1 In addition, we
employed a multi-industry sample. According to the Hellenic Statistical
Authority,2 for the fiscal year 2020, no dominant export industry rep­
resented Greece’s exporting activity; instead, exports were led by
manufacturing products, which represented 40% of total exports, fol­
lowed by fuels (30%) and agricultural products (20%). The remaining
10% of Greece’s total exports comprised raw materials and unclassified
products.
We primarily obtained the sampling frame for Study 2 from Athens
Chamber of Commerce and Industry, which has a rich Greek export
directory. After excluding service firms and business-to-consumer-only
companies, we had a list of 512 international B2B companies. We also
used a second database, Greek Exporters Association, and, through the
same process, generated a second list of 318 international B2B com­
panies. We contacted each of the 830 companies by telephone and dis­
cussed the aim and significance of the study. Of the companies, 303
refused to participate or could not be reached. The primary reason for
not contributing to the study was data protection, followed by insuffi­
cient or merely occasional international activity. For the 527 companies
that agreed to proceed, we sent emails with an attached link for the
online survey, which we designed in Qualtrics. After two follow-up re­
minders, we collected 264 responses, seven of which were dropped
because of missing data (partial responses) and five because of scores
lower than 4 on the 7-point scale about confidence in answering
correctly. Therefore, the final responses were 252, yielding an effective
response rate of 47.6%. Table 3 lists the profile details of respondents.
3.2.2. Mindset and psychic distance manipulation and manipulation checks
We manipulated mindset by prompting managers to read the same
scientific articles as in Study 1. The articles presented views of either a
fixed or growth mindset, to activate one of the two mindset types.
Consequently, respondents had to briefly summarize the essence of the
article they had just read.
For an effective manipulation check, we measured mindset similarly
to Study 1, with a 3-item scale adopted from Chiu et al. (1997). The
results supported the experimental manipulation, with respondents in
the fixed-mindset condition reporting a higher level on the implicit
theory scale (Mfixed = 4.20, SD = 0.65) than those in the growth-mindset
condition (Mgrowth = 2.01, SD = 0.95; F(1, 251) = 715.13, p < .001).
Scoring high on this scale means compliance with a fixed mindset,
whereas lower scores imply the adoption of a growth mindset.
We manipulated psychic distance by assigning each respondent to a
certain geographic area that represented high or low psychic distance.
We selected this geographic area by examining relevant research
studies. Drawing on the main factors that determine the psychic distance
1
https://www.oecd-ilibrary.org/trade/trade-in-goods-and-services/ind
icator/english_0fe445d9-en.
2
https://www.statistics.gr/en/exp-export-expect
C. Papadopoulou et al. Industrial Marketing Management 115 (2023) 266–280

Fig. 2. Study 1 effects of mindset on lifestyle adaptation intentions.

distance condition (Eastern Europe) scored low on the relevant scale

Table 3
(MLowPD = 2.20, SD = 0.54), indicating a great extent of similarity
Study 2 profile details of respondents.
perceptions between the home and host countries. Respondents in the
Study 2 high psychic distance condition (South East Asia) were inclined to
Firm size perceive dissimilarity between the two countries and therefore scored
Fewer than 10 employees 5.2% higher on the scale (MHighPD = 4.25, SD =0.37; F(1, 251) = 262.44, p <
10–50 employees 83.7%
.001)]. Thus, the manipulations of fixed and growth mindsets and psy­
51–250 employees 10.7%
251–1000 employees 0.4% chic distance had the intended effect.
Manager’s international experience
<5 years 25% 3.2.3. Measures
5–10 years 44% We measured marketing strategy adaptation intentions with a 4-
11–15 years 16.7%
item, 7-point scale (1 = “fully standardized strategy,” 7 = “fully
16–20 years 10.3%
>20 years 4% adapted strategy”), on which each item corresponded to an element of
Company’s international experience (duration) the marketing mix (price, promotion, product, and distribution). We
<5 years 3.6% used Budner (1962) tolerance for ambiguity scale to measure ambiguity
5–15 years 43.6%
tolerance on a 7-point scale (1 = “strongly disagree,” 7 = “strongly
16–25 years 35.3%
26–35 years 12.3%
agree”). Appendix C provides a detailed list of the measures.
>35 years 5.2%
Number of international markets (scope) 3.2.4. Analysis and results
Fewer than 5 46.8% To test our hypotheses, we ran a 2 (mindset: fixed vs. growth) × 2
6–10 47.2%
(psychic distance: low vs. high) between-subject ANCOVA. Firm size
11–15 4.4%
16–25 1.2% (number of employees), manager’s international experience, company’s
>25 0.4% international experience (duration and scope), manager’s experience
Manager’s experience with the company with the company, perceived market attractiveness, and perceived risk
<5 years 5.6%
served as covariates, and adaptation intentions was the dependent
5–10 years 37.7%
11–15 years 19.8%
variable.
16–20 years 19.8% The results revealed that mindset has a significant main effect on
>20 years 17.1% adaptation intentions (F(1, 251) = 13.56, p < .001), in support of H1.
That is, respondents exposed to the fixed-mindset scenario reported
lower adaptation intentions (Mfixed = 3.62) than those exposed to the
scale (Theodosiou & Katsikeas, 2001), we concluded that South East
growth-mindset scenario (Mgrowth = 3.91). Fig. 3 illustrates the effects.
Asia and Eastern Europe were valid representatives of high and low
Furthermore, to assess the effects of mindset on the adaptation in­
psychic distance, respectively, from Greece. A manipulation check with
tentions of different marketing-mix elements, we conducted a multi­
30 managers from Greece showed that they perceive South East Asia and
variate analysis of covariance (MANCOVA). The set of covariate
Eastern Europe as psychically close and distant, respectively, as inten­
variables remained the same. The results show a main effect of mindset
ded. Appendices A and B present the vignettes used in Study 2.
on price adaptation intentions (Mfixed = 3.68, SD = 1.86; Mgrowth = 4.48,
We also assessed psychic distance as a manipulation check by asking
SD = 1.67; F(1, 251) = 8.92, p < .05), promotion adaptation intentions
managers to indicate the perceived distance to a country in the foreign
(Mfixed = 3.49, SD = 1.88; Mgrowth = 4.59, SD = 1.67; F(1, 251) = 17.17,
region in question and to answer the extent to which the region was
p < .001), and distribution adaptation intentions (Mfixed = 3.45, SD =
similar to or different from Greece in terms of aspects such as the level of
2.08; Mgrowth = 4.29, SD = 1.94; F(1, 251) = 8.16, p < .05). The effect of
economic and industrial development and cultural values. We adapted
mindset on product adaptation intentions was not significant (F(1, 251)
the 5-point scale (1 = “very similar,” 5 = “very different”) from Katsi­
= 0.20, p > .05). Table 4 summarizes these results.
keas, Skarmeas, and Bello (2009) and Evans and Mavondo (2002). The
To test the moderating role of psychic distance, as hypothesized in
manipulation check results revealed that managers in the low psychic
H3, we conducted a regression-based analysis using PROCESS (model 1,

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C. Papadopoulou et al. Industrial Marketing Management 115 (2023) 266–280

Fig. 3. Study 2 effects of mindset on marketing strategy adaptation intentions.

Specifically, mindset has a significant effect on adaptation intentions

Table 4
when psychic distance is low (effect = 0.44; 95% CI [0.12, 0.76]), and
Study 2 MANCOVA results.
this effect disappears when psychic distance is high (effect = 0.04; 95%
Direct effects p-value F Mgrowth Mfixed CI [− 0.29, 0.36]). In other words, in the low psychic distance condition,
statistic
growth-mindset managers demonstrate higher adaptation intentions
Mindset (growth vs. fixed) ➔ strategy <0.001 13.56 3.91 3.62 than fixed-mindset managers; conversely, when psychic distance is high,
Adaptation intentions
managers with both growth and fixed mindsets opt for similarly high
Mindset (growth vs. fixed) ➔ price <0.05 8.92 4.48 3.68
adaptation intentions levels of adaptation. Fig. 4 depicts these effects.
Mindset (growth vs. fixed) ➔ <0.001 17.17 4.59 3.49
promotion adaptation intentions 3.2.5. Mediation analysis
Mindset (growth vs. fixed) ➔ product >0.05 0.20 3.17 3.06 H2 predicts that ambiguity tolerance mediates the effect of mindset
adaptation intentions
on adaptation intentions. We conducted a mediation analysis with 5000
Mindset (growth vs. fixed) ➔ <0.05 8.16 4.29 3.45
distribution adaptation intentions resamples for the estimation of CIs (PROCESS Model 4; Hayes, 2018). As
expected, ambiguity tolerance mediates the mindset–adaptation in­
Note: Statistically significant effects are in bold.
tentions relationship with an indirect effect of 0.17 (95% CI: [0.01,
0.38]); thus, H2 is supported as the results reveal that mindset has a
Hayes, 2018). The model used 5000 resamples for the calculation of positive indirect effect on adaptation intentions through ambiguity
confidence intervals (CIs) and used bias-corrected accelerated bootstrap tolerance (see Fig. 5). Table 5 provides a summary of Study 2’s results.
(Hayes, 2018). In line with our expectations, we find a significant
interaction effect of mindset and psychic distance on adaptation in­
tentions (β = − 0.44; 95% CI [− 0.86, − 0.01]), in support of H3.

Fig. 4. Study 2 moderation effect of psychic distance.

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Fig. 5. Study 2 mediating effect of ambiguity tolerance.
Table 5
Study 2 moderating and indirect effects.
Hypothesized effect β 95% CI
Mindset (growth vs. fixed) £ psychic distance (high vs. − 0.44 − 0.86;
low) ➔ adaptation intentions − 0.01
Mindset (growth vs. fixed) £ low psychic distance ➔ 0.44 0.12; 0.76
adaptation intentions
Mindset (growth vs. fixed) £ high psychic distance ➔ 0.04 − 0.29;
adaptation intentions 0.36
Mindset (growth vs. fixed) ➔ ambiguity tolerance ➔ 0.17 0.01; 0.38
adaptation intentions
Note: Statistically significant effects are in bold.
4. Discussion
4.1. Theoretical contributions
Overall, the study results reveal that mindset has a direct effect on
managerial international B2B decisions, through this effect is moderated
by different levels of perceived distance and mediated by ambiguity
tolerance. More specifically, when B2B managers adopt a growth
mindset, they tend to make adaptation decisions; by contrast, their
fixed-mindset counterparts are more favorable toward standardization
decisions. Although previous research has strongly linked the concept of
adaptability to mindset (Dweck & Leggett, 1988), we examine the level
of adaptation in different contexts to draw more reliable conclusions. We
find that in both layman and B2B managerial settings, mindset and
adaptation are positively related.
Study 1 provides insights into the effect of mindset on general
adaptation intentions. We discovered that mindset is a significant
determinant of lifestyle adaptation. In particular, when we asked in­
dividuals to imagine that they had to relocate to a new country for either
work or studies, those in the growth-mindset condition reported higher
adaptation intentions. Effective manipulation of mindset led individuals
to indicate different levels of adaptation in terms of their activities, in­
terests, and opinions in the foreign country. This is an important finding
and confirms the flexibility, adaptivity, and dynamism characterizing a
growth mindset (Dweck & Leggett, 1988).
Having established the powerful effect of mindset on general adap­
tation decisions, we proceeded with a replication of this effect in in­
ternational B2B settings. Study 2 sheds further light on the conditions
under which mindset affects the level of adaptation in cross-border
strategies. We provide causal empirical support to explain the moder­
ating role of psychic distance and the mediating effect of ambiguity
tolerance.
In particular, we found that mindset is a strong driver of marketing
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Industrial Marketing Management 115 (2023) 266–280
strategy adaptation intentions among B2B managers. The results indi­
cated that managers with a growth mindset tend to undertake higher
levels of adaptation given their more flexible and challenge-seeking
nature (Trope & Liberman, 2010). We thus establish that mindset
holds a potentially central position in marketing strategy adaptation
decision outcomes. Adaptability is strongly associated with growth-
mindset individuals, who, in general, frequently respond to challenges
in adaptive ways (Hong et al., 1999). The finding that B2B managers’
mindset indeed plays a significant role in international strategic de­
cisions may also explain some of the mixed results in the international
marketing standardization/adaptation literature proposing that B2B
companies would, by nature, be more inclined toward standardization
because “purchasing decisions are based on ‘rational’ rather than
‘emotional’ criteria’” (Theodosiou & Leonidou, 2003, p. 155).
Our results lend further support to the view that managers are
boundedly rational and that neglecting their cognitive orientation and
perceptions could engender flawed results (Aharoni et al., 2011; Kacz­
marek & Ruigrok, 2013). For example, it could be argued that such
findings would contradict classic B2B marketing reasoning derived from
exchange theory and economic decision-making based on rational
choices and high access to information (Hadjikhani & LaPlaca, 2013).
While most international B2B decision-makers are certainly rational
human beings, their ability to interpret and construe environmental
stimuli is restricted by the abundance and complexity of available in­
formation (Ahi, Baronchelli, Kuivalainen, & Piantoni, 2017), especially
in the international context. Nevertheless, in a business context, math­
ematical precision in decision-making processes is rather unrealistic,
given the extreme time pressure and environmental complexity (Tarka,
2017). Thus, B2B managers are often compelled to form subjective
reasoning mechanisms (Perlow, Okhuysen, & Repenning, 2002), which
characterize bounded rationality. These findings indeed correspond
with recent theoretical developments in the B2B marketing field that
have acknowledged bounded rationality and drawn on behavioral the­
ory in addition to traditional exchange theory (Hadjikhani & LaPlaca,
2013).
We also contribute to the B2B marketing strategy literature by
investigating the mediating mechanism of ambiguity tolerance in
adaptation decisions. Prior research has consistently highlighted the
critical role of ambiguity and its effect on various strategic outcomes (e.
g., Jean & Kim, 2021; Lee, Wang, Ma, & Anderson, 2022; McNally,
Durmusoglu, Calantone, & Harmancioglu, 2009). Our study contributes
to this body of literature by focusing on the individual decision-making
process in B2B settings. Specifically, we uncover a new antecedent of
ambiguity tolerance—namely, mindset—and show its effect on adap­
tation intentions. We establish that ambiguity tolerance can indeed
explain why growth-mindset B2B managers prefer international adap­
tation strategies. Such a finding brings further attention to the research
C. Papadopoulou et al.
stream examining phenomena predicted by ambiguity tolerance and
answers calls for additional research on the phenomena predicted by
ambiguity tolerance (Wangrow, Schepker, & Barker III, 2015).
Moreover, we uncover an important boundary condition and show
how international strategy adaptation decisions may vary with different
levels of psychic distance. By manipulating psychic distance, we address
criticism on the construct’s operationalization (Obadia, 2013) and also
show that growth-mindset managers prefer adaptation strategies to a
higher degree, while this preference is more pronounced under high
levels of psychic distance. When the perceived distance between a home
and host market is high, uncertainty and risk grow (O’Grady & Lane,
1996). Thus, growth-mindset individuals who cope rather well with
uncertainty are more likely to have higher strategy adaptation
intentions.
4.2. Managerial implications
Our findings have important managerial implications in the B2B and
international marketing domains. Although scholars are agnostic about
which type of thinking is more effective, they generally agree that
growth mindsets are superior. Nevertheless, within business contexts,
such views are not always supportive of this; indeed, the managerial
mindset must be well calibrated to reality (Wheeler & Omair, 2016). A
suggestion, therefore, is that while B2B managers are not biased by the
seeming superiority of growth mindset, they should carefully evaluate
specific situations before building strategies based on them. Mindset is a
powerful tool with extensive applicability to a wide range of marketing-
related decisions. Comprehending the way mindset shapes strategy
adaptation decisions should help B2B marketing managers target their
desirable audience and also guide firms when entering new markets or
setting international marketing strategies.
Moreover, our findings are particularly relevant for B2B firms that
value the flexibility that adaptation marketing strategy offers. Specif­
ically, we found that promotion, price, and distribution strategy adap­
tations are more likely when key decision-makers have a growth mindset
and are tolerant of ambiguity. This mechanism can be a valuable tool for
C-level managers whose main strategic priority is agility and resilience
as a means to deal with disruptions (Zahoor, Golgeci, Haapanen, Ali, &
Arslan, 2022). Business buyers expect sellers to understand their needs;
therefore, agility is critical in offering tailored and on-demand products
and services (Akter, Hani, Dwivedi, & Sharma, 2022). We suggest that
regular internal assessments of managers’ mindsets need to take place;
in doing so, firms will be able to first detect and then leverage the ca­
pabilities that growth-mindset managers have to offer in dynamic
business environments. For this reason, our findings also contradict
some studies on international B2B marketing (e.g., Akaah, 1991; Cav­
usgil, Zou, & Naidu, 1993) suggesting that international strategy stan­
dardization by default is preferable because of the allegedly more
rational purchasing approaches of B2B purchasing organizations (The­
odosiou & Leonidou, 2003).
Nevertheless, C-level managers should consider our findings with
caution. We showed that the promotion element is more prone to
adaptation than distribution and price. Considering that extreme pro­
motion adaptation may also have negative performance effects (Hult­
man et al., 2011), we suggest that equal attention is paid to not only
individual decision-makers but also external forces (e.g., legislation,
bureaucracy, cultural nuances) that determine the level of marketing
strategy adaptation in B2B export settings. Prior research (e.g., Sousa,
Lengler, & Martínez-López, 2014) has also highlighted the inverted U-
shaped relationship between price adaptation and export performance.
Our findings suggest that growth-mindset B2B managers, who handle
environmental uncertainty well, should be particularly careful not to
over-adapt their pricing strategy, to avoid potential detrimental effects
such as imbalanced resource allocation (Cadogan, Kuivalainen, &
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Industrial Marketing Management 115 (2023) 266–280
Sundqvist, 2009). Moreover, distribution adaptation is one of the most
adapted marketing-mix elements mainly because of distributive insti­
tution rigidity (see Dimitrova & Rosenbloom, 2010), that is, fixed dis­
tribution structures across countries that often dictate mandatory
adaptation. Given our findings, we encourage B2B practitioners to
consider current channel structures and assign distribution adaptation
tasks to growth-mindset managers (and teams) with good international
experience. Overall, however, encouraging the development of agility
and adaptability through a growth mindset should be the result of
careful assessment of mindset and individual ambiguity tolerance.
Against this backdrop, our findings also advance a criterion for B2B
training and recruitment processes. Human resources departments, in
collaboration with marketing and sales departments, should develop,
apply, and maintain training tools on the mindset that complies with
their companies’ objectives. In this way, mindsets that align with the
business scope can be cultivated and appropriate candidates identified.
4.3. Limitations and future research avenues
This study also has inherent limitations, including the reliance on
EVM rather than actual field data on managerial international strategic
adaptation decisions based on mindsets. Although we deemed EVM a
suitable methodology for the research question at hand given its
inherent advantages (see Aguinis & Bradley, 2014), we advise future
researchers to examine ways to replicate the findings in a field setting.
Moreover, as is the case in all international marketing research, the
findings may be limited to the context in which they were investigated.
Further research endeavors are therefore necessary to investigate
whether similar results would appear in cases in which the international
marketing managers have a different cultural background. For example,
would a manager with a completely different cultural background be as
responsive to the impact of mindset, ambiguity tolerance, and psychic
distance as Western perspective managers included in the current
investigation?
In addition, product was the only marketing mix element unaffected
by mindset. This finding can be justified by the nature of the strategy;
indeed, adapting B2B products would demand new production design
and, at the same time, would delay or even impede the rapid diffusion of
products in markets (Theodosiou & Leonidou, 2003). To further inves­
tigate the findings, future research could assess both mutual and uni­
lateral dyadic adaptation in B2B markets at the product level.
Moreover, the current research centered on the effect of mindset on
intended behavioral outcomes and provided insights into the managerial
decision-making process within the marketing field. Nevertheless, given
the importance of performance, future studies should further develop
our model by evaluating mindset as an antecedent and venture perfor­
mance as its outcome.
In particular, export performance—namely, the three-dimensional
market, financial, and customer performance (Hultman et al., 2009)—
is a relevant outcome of marketing strategy adaptation decisions com­
mon in the field of exporting (Cavusgil & Zou, 1994). In this way, new
research findings can shed light on the evergreen but fragmented effect
of marketing strategy adaptation on firm performance (Mandler et al.,
2021), which has recently been characterized as a double-edged sword
(Wang, Gao, Jia, & Wang, 2022). Finally, given the importance and
robustness of mindset, we suggest that future research examine whether
other mindsets (e.g., power mindset; Galinsky, Rucker, & Magee, 2015)
may also drive managerial decisions and also evaluate any potential
mindset hierarchies.
Data availability
The data that has been used is confidential.
C. Papadopoulou et al. Industrial Marketing Management 115 (2023) 266–280

Appendix A. Mindset manipulation

A.1. The growth-mindset article read

According to scientists, people’s attitudes, beliefs and opinions are considerably dynamic. Thus, your personality and your mindset are not static,
as they constantly evolve before adulthood and are highly malleable throughout adulthood. Moreover, research has shown that in general people
change a lot during their life, as human nature is volatile and each one of us owns a dynamic set of developing traits. In his talk at the American
Psychological Association’s annual convention […] Dr. Medin […] reported numerous large longitudinal studies showing that people can mature and
change their character. He also reported research findings showing that people’s personality characteristics can change, even in their late sixties.

A.2. The fixed-mindset article read

According to scientists, people’s attitudes, beliefs and opinions are considerably static. Thus, your personality and your mindset are not dynamic,
as they shape before adulthood and remain solid and robust throughout adulthood. Moreover, research has shown that in general people do not change
much during their life, as human nature is stable and each one of us owns a limited set of fairly fixed traits. In his talk at the American Psychological
Association’s annual convention […] Dr. Medin […] reported numerous large longitudinal studies showing that people can mature and change their
character. He also reported research findings showing that people age and develop, but they do so on the foundation of enduring dispositions.

Appendix B. Psychic distance manipulation

B.1. High psychic distance condition

Now imagine that your company plans to enter a new South East Asian country where you have never performed any activity in the past. Please
answer the following questions with the aforementioned scenario in mind.

B.2. Low psychic distance condition

Now imagine that your company plans to enter a new East European country where you have never performed any activity in the past. Please
answer the following questions with the aforementioned scenario in mind.

Appendix C. Constructs used in Study 1 and Study 2

Construct (Cronbach’s α) Source

Mindset Study 1(α = 0.95), Study 2 (α = 0.88) Chiu et al. (1997)

Please indicate the extent to which you agree or disagree with the following statements, regarding your style of coping with negative
events. (1 = “strongly disagree,” 5 = “strongly agree”)

- The kind of person someone is, is something very basic about them and it can’t be changed very much.
- People can do things differently, but the important parts of who they are, can’t really be changed.
- Everyone is a certain kind of person and there is not much that can be done to really change that.
Psychic distance (α = 0.88) Evans and Mavondo (2002); Katsikeas
Please indicate the extent to which the aforementioned scenario country is similar to or different from the country your company is et al. (2009)
located in, with regard to the following aspects. (1 = “very similar,” 5 = “very different”)

- Level of economic and industrial development

- Political and legal system
- Level of literacy and education
- Cultural values. Beliefs, attitudes and traditions
- Language
Ambiguity tolerance (α = 0.75) Budner (1962)

- Please respond to the following statements by indicating the extent to which you agree or disagree with them. (1 = “strongly disagree,” 7
= “strongly” agree)
- An expert who doesn’t come with a definite answer, probably does not know much.
- A good job is one where what to be done is always clear.
- What we are used to is always preferable to what is unfamiliar.
- Many of our most important decisions are based upon insufficient information.
- People who insist upon a yes or no answer, just do not know how complicated things are.
Adaptation Intentions (α = 0.75)
Please indicate to what extent you would select a standardized or adapted strategy for the marketing mix elements, relative to your home
market
(1 = “fully standardized strategy,” 7 = “fully adapted strategy”)

- Price strategy
- Promotion strategy
- Product strategy
(continued on next page)

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(continued )
Construct (Cronbach’s α) Source

- Distribution strategy
Lifestyle adaptations intentions (α = 0.84). Wells and Tigert (1977)
How likely are you to adapt the following aspects of your lifestyle (activities, interests and opinions) on the lifestyle of the country you
will go? (1 = “extremely unlikely,” 5 = “extremely likely”)

- Recreational activities (e.g., dining out)

- Purchasing activities (e.g., local stores vs. shopping centers)
- Leisure time activities (e.g., indoor vs. outdoor activities)
- Culinary interests (e.g., cuisine)
- Fashion interests (e.g., fashion trends and style)
- Media preference (e.g., TV, internet etc.)
- Cultural opinions (e.g., tradition and values perceptions)
- Political opinions
- Social issues opinions (e.g., Public health and education systems)
Life satisfaction
How satisfied are you with your life as a whole (1 = “extremely dissatisfied,” 5 = “extremely satisfied”)
Happiness (α = 0.80) Hills and Argyle (2001)
Please read the statements carefully and give the answer that is true for you in general or most of the time. (1 = “strongly disagree,” 5 =
“strongly agree”)

- I feel that life is very rewarding.

- I don’t feel particularly pleased with the way I am.
- I am well satisfied about everything in my life.
- I can find time for everything I want to.
Risk propensity Adapted from Tversky and Kahneman
Imagine that you face the following pair of decisions. First examine both decisions and then indicate which option you prefer. (1981)

- 80% chance £400 or £320 for sure

- £300 for sure or 20% £150
- 90% £200 or £180 for sure
- £160 for sure or 10% £1600
- 50% £500 or £250 for sure

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Contents lists available at ScienceDirect

Industrial Marketing Management

journal homepage: www.elsevier.com/locate/indmarman

From greenwashing to green B2B marketing: A systematic literature review

Anastas Vangeli a, Agnieszka Małecka b, Maciej Mitręga b, Gregor Pfajfar a, *
a
University of Ljubljana, School of Economics and Business, Kardeljeva pl. 17, 1000 Ljubljana, Slovenia
b
University of Economics in Katowice, Ul. 1 Maja 50, 40-287 Katowice, Poland

A R T I C L E I N F O A B S T R A C T

Keywords: This paper addresses the emergence of greenwashing and examines its implications for the development of green
Greenwashing marketing strategies. It starts from the premise that companies face vigilant environmental activism when
B2B marketing strategies developing B2B marketing strategies, focusing on identifying discrepancies between intended marketing mes­
Green B2B marketing
sages and actual practices, as well as an increasingly tightening regulatory environment. The core of the paper is
Sustainability
Corporate social responsibility
a systematic review of interdisciplinary research on greenwashing in the B2B context with a focus on B2B
Systematic literature review marketing implications. In particular, this study contributes to a modern understanding of greenwashing by
providing a new framework for the typology, drivers, and consequences of greenwashing. It also contrasts
theories that help explain the greenwashing phenomenon through an interdisciplinary perspective. Finally, this
study points out the gaps in existing research on this phenomenon and offers rich future research directions.

1. Introduction claims. As firms internationalize, their environmental disclosure in­

The term “greenwashing” has been popularized so much that one can
use standard dictionaries to define it. The first wave of notable work on
the topic dates to the last decades of the 20th century and the early
2000s (Greer & Bruno, 1997; Laufer, 2003; Lubbers, 2002). Moreover,
the anti-greenwashing discourse has been also informed by the
advancement of environmental protection, one of the most momentous
developments for business regulation in the post-WW2 era (Adler,
2021). It has critically examined the shift in the perception and
discourse of businesses to rhetorically embrace and communicate prin­
ciples of sustainability and care for the planet and people, which has
been often juxtaposed contradicted by against the lingering negative
environmental impacts of their operations. Initially, MNEs had been
antagonistic towards environmentalist ideals; their shift in attitudes has
been a result of the combined pressures by movements and regulators,
and the disruptive actions from within the corporate field led by
exceptionally visionary managers (Abdin, 2015).
Greenwashing originates in the gap between symbolic (Martín-de
Castro, Amores-Salvadó, Navas-López, & Balarezo-Nuñez, 2017),
appearance-oriented version of environmental commitments on one
hand, and substantive corporate approaches to environmental impact on
the other (Truong, Mazloomi, & Berrone, 2021). In essence, it reflects
the inability of companies to substantiate their publicly made green
creases, but does not necessarily lead to increase in their substantive
environmental impact (Ellimäki, Gómez-Bolaños, Hurtado-Torres, &
Aragón-Correa, 2021). It is in this gap between symbolic rhetoric on one
side, and lack of substantive practice and impact of the other, that the
suspicions and dissatisfaction among stakeholders is born, which then
leads to greenwashing accusations (Martín-de Castro, 2021). Notably,
greenwashing is not the only type of “washing” phenomenon that poses
a challenge for companies; our analysis also captures and compares
other washing phenomena.
Greenwashing can be the outcome of different malpractices, such as
selective disclosures; empty, irrelevant or unsubstantiated claims;
referring to dubious certifications; backing up or lobbying for environ­
mentally unfriendly regulation or collaborating with companies that
have negative environmental impact (Nemes et al., 2022). Paradoxi­
cally, firms with poorer environmental track record, or those who carry
a stigma of not being committed to the environment, face less backlash
compared to those who are perceived as environmental leaders but at
some point are accused for greenwashing (Kassinis, Kay, Papagiannakis,
& Vlachos, 2022). It is by now established that markets disfavor
greenwashing (Du, 2015; Testa, Miroshnychenko, Barontini, & Frey,
2018), however, the damage done by greenwashing exceeds the impact
on financial performance and needs to be seen as protruding into
different facets of the operation of the firm and its positioning in the

* Corresponding author.
E-mail addresses: anastas.vangeli@ef.uni-lj.si (A. Vangeli), agnieszka.malecka@ue.katowice.pl (A. Małecka), maciej.mitrega@ue.katowice.pl (M. Mitręga),
gregor.pfajfar@ef.uni-lj.si (G. Pfajfar).

https://doi.org/10.1016/j.indmarman.2023.10.002
Received 14 January 2023; Received in revised form 2 September 2023; Accepted 6 October 2023
Available online 14 October 2023
0019-8501/© 2023 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
A. Vangeli et al.
social world. Increasingly vigilant publics boycott and “cancel” com­
panies perceived to be faking their green posture (Szabo & Webster,
2021); and researchers and observers tried to make sense of the actual
criteria that make the distinction between what is actually a green
company and what is a pretender (Saha & Darnton, 2005); while, reg­
ulators have tried to institutionalize this logic through various regula­
tions (Carreño, 2023). This multi-agential, multi-relational dynamics, is
best captured by embracing a multi-layered, nested B2B marketing
environment framework as proposed by Möller, Nenonen, and Stor­
backa (2020), with actors at the micro layer core, surrounded by a focal
ecosystem at the lower meso layer, the business field at the upper meso
layer, and finally, the socio-economic-technological (SET) system at the
macro layer, which are inter-related, mutually influencing and condi­
tioning each other. We treat greenwashing, and the rise of the anti-
greenwashing discourse, as relevant on all four levels, radically trans­
forming the totality of the environment in which businesses operate.
Such definition then informs our literature review selection.
Greenwashing encompasses not just companies' unsubstantiated
green claims, but also stakeholders' perceptions and accusations, which
can significantly impact the companies themselves, industries, and
marketing practices, regardless of actual corporate actions (Seele &
Gatti, 2017). When facing rising global environmental awareness,
companies cannot expect presumption of innocence: a company
engaging in green marketing can be held liable for greenwashing until
proven that it can substantiate its claims. Being accused for green­
washing, in this sense can be seen a boomerang effect of apparent good
intentions (Berrone, Fosfuri, & Gelabert, 2017). Sometimes, green­
washing perceptions can be a result even of non-environmental factors,
i.e. quality and experience of communication (Szabo & Webster, 2021).
Moreover, once a company is found guilty of greenwashing, it becomes
targeted disproportionately as culprit for environmental degradation or
climate change, in a way that exceeds the actual responsibility and
negative impact of its (mal)practices (Zou, Zeng, Zeng, & Shi, 2015).
Repairing trust after a greenwashing scandal is an uphill and long-
lasting task for companies, which requires a particular marketing
strategy adjustment (Guo, Zhang, Wang, Li, & Tao, 2018; Wang, Walker,
& Barabanov, 2020).
Taking into account the complexity of the issue, this paper zooms in
on the rise of the “greenwashing” paradigm and examines the conse­
quences for the development of green marketing strategies. It starts from
the premise that when developing B2B marketing strategies aimed at
people, planet and profit, companies face an increasingly complex
terrain that they have to navigate, e.g. they have to consider the rise of
vigilant environmental activism which is focused on finding discrep­
ancies between projected marketing messaging and actual practices; as
well as the increasingly tightening regulatory framework.
The paper grapples with a noisy field of greenwashing research,
analysing different bodies of work that have often developed in parallel
to each other, while at the same time left significant gaps which the
paper also identifies. It adopts an interdisciplinary perspective, which is
used as a foundation in the development in novel framework for un­
derstanding greenwashing in a B2B context. In this way, we overcome
parallelism and provide a new framework for analysing greenwashing
and formulating recommended actions for businesses and regulators.
The paper undertakes the following innovations to this end: 1) synthe­
sizing the antecedents, outcomes, and moderators of greenwashing and
distinguishing between various drivers of greenwashing, including sta­
ble external market drivers, dynamic external market drivers, and in­
ternal drivers; 2) emphasizing the under-researched role of supply chain
drivers in B2B marketing; 3) proposing a new classification of green­
washing outcomes, considering multiple levels of analysis and the eco­
nomic, environmental, or social impacts of greenwashing; 4) focusing on
the role of moderators that can influence the impact of greenwashing; 5)
exploring the possibility for moving beyond a judgmental view, e.g. by
exploring how greenwashing can be a step towards pursuing an
authentically green agenda later on.
282
Industrial Marketing Management 115 (2023) 281–299
At the core of the greenwashing predicament is the question of trust
(Guo, Tao, Li, & Wang, 2017), e.g. how can actors outside the company
know whether the green marketing rhetoric is grounded on green
practices or not. Intuitively, companies faced with such situation would
try to simply “convince” other actors in their commitment to the green
agenda that they promote in their marketing rhetoric, however this may
not be an efficient strategy; the paper suggests that first companies need
to understand the phenomenon better in order to adapt to the new
reality.
The centerpiece of the paper is a systematic review of the inter-
disciplinary research on greenwashing, which is aimed to contribute
towards taking stock of the subject area of greenwashing within and
beyond marketing and environmental management, providing insight
into the breadth, depth and limits of the knowledge produced on the
topic. In particular, this study contributes to a modern understanding of
greenwashing by providing a new framework for the typology, drivers,
and consequences of greenwashing. We believe that B2B marketing
would benefit from a systematic literature review on greenwashing for
several reasons. First, as B2B customers become more environmentally
conscious, implementing green marketing management is not only a
competitive advantage but a must for survival (Guo et al., 2018). In the
face of climate change and resource depletion, research on sustainability
in B2B marketing is crucial, although it is currently sparse and some
fundamental questions remain unanswered (Sharma, 2020). A system­
atic literature review on greenwashing can answer some of these ques­
tions by pointing to frameworks and sub-fields of sustainability research
that need more focus in the future. These include questioning assump­
tions about a B2B firm's purpose and place in society, and assuming that
only certain sustainability challenges are important to B2B markets
(Voola, Bandyopadhyay, Voola, Ray, & Carlson, 2022). Second, by
better understanding the causes of greenwashing (e.g., competitive
pressures, financial incentives) and the negative consequences (e.g.,
reputational damage, loss of trust), B2B firms can avoid such pitfalls and
build genuine sustainable relationships with their stakeholders, be they
buyers (Huang, Surface, & Zhang, 2022), suppliers (Cabanelas, Cortez,
& Charterina, 2023), or social impacts on society at large (Pfajfar,
Shoham, Małecka, & Zalaznik, 2022). Consequently, scholars could
better understand the nature of trust and commitment as two important
facets of B2B relationships (Morgan & Hunt, 1994) and further advance
relationship marketing theory. Finally, B2B firms that engage in inter­
national markets need to pay attention to compliance with regulations
that many countries have enacted to prevent false or misleading envi­
ronmental claims or, on the contrary, be rewarded for complying with
the United Nations Sustainable Development Goals (Sun & Zhang, 2019;
Voola et al., 2022). In addition, B2B companies may want to avoid
greenwashing not only because of legal requirements but also because of
ethical considerations (Delmas & Burbano, 2011). Research in all these
areas is fragmented and requires consensus, which a systematic litera­
ture review can provide.
The greenwashing discussion touches upon several aspects of mar­
keting and environmental management. Greenwashing could be framed
in light of ethical marketing theories that emphasize the ethical imper­
atives that companies need to abide to when engaging in marketing
activities. More broadly, companies have ‘green’ responsibilities to their
wide arrays of stakeholders, who increasingly have expectations about
substantive environmental action and substantiated green marketing
practices. One could argue that greenwashing is the litmus test of CSR as
well (Guo, Wang, Hwang, Jin, & Zhou, 2022). Greenwashing, should it
be proven, nullifies other CSR efforts. In the context of B2B international
marketing, as it is argued below, greenwashing is central to the trust
relationship within ‘bilateral’ B2B relationships, but also within broader
constellations, ecosystems and environments. Central element to B2B
theory is the interaction between companies; however, this interaction
only takes place once and inter-company relationship is established that
are driven not only by pure economic logic, but also inherently have a
pronounced behavioral component (Hadjikhani & LaPlaca, 2013).
A. Vangeli et al.
Sustainability positioning plays an important role in shaping B2B pref­
erences (Casidy & Yan, 2022). At the core of this is the relationship
between business actors, in which central are the elements of commit­
ment and trust (Morgan & Hunt, 1994), which is not limited to business
actors dyads, but rather to a broader set of actors in a given fields. In the
era of socially conscientious marketing, of which green marketing sub­
sets, businesses often act as activists demanding change and normative
commitment from their partners (Kapitan, Kemper, Vredenburg, & Spry,
2022). Likewise, companies that are in different relations with other
companies – be it as partners, competitors, suppliers – are exposed to the
risks of spillover effects of greenwashing accusations (Zhe, Yao, & Hu,
2020).
Business are already part of constellations, i.e. through supply
chains. Often, these are centered on focal actors (i.e. a major MNE in­
fluences the behavior of its suppliers). In this sense, the responsibility for
greenwashing is shared among all the links in the chain, with a partic­
ular share of it falling on the back of the focal MNE, which acts as a
leader (Blome, Foerstl, & Schleper, 2017). They are also part of broader
business fields, i.e. ecosystems at the industry level, where they set
certain standards and norms of conduct. Greenwashing thus can shake
up whole industries. Finally, these different business fields intersect and
conjoin in socio-economic-technological systems on the macro layer. An
illustrative example is the Volkswagen emissions scandal (so-called
‘Dieselgate’), widely considered to be a textbook case of greenwashing,
aside from having an immense impact on the company's reputation and
performance, and has had substantial spillover effects on its competitors
and suppliers, and the European and global auto-industry as a whole
(Barth, Eckert, Gatzert, & Scholz, 2022). It even had an effect on the
secondary market of used cars (Strittmatter & Lechner, 2020). Criticism
of H&M's greenwashing has been inseparable from a broader critical
discourse of the ‘fast fashion’ industry (Kaner, 2021). Oil companies and
airlines, similarly, when accused of greenwashing, bring bad reputation
to their whole industries and business networks. Related to this, is that it
had paradigmatic effect on how different stakeholders as well as ob­
servers and researchers talk about greenwashing in its aftermath (Siano,
Vollero, Conte, & Amabile, 2017).
Based on the above arguments, this study addresses the following
research questions:
RQ1: What is the extant literature's understanding of the antecedents
and consequences of greenwashing and what are the implications for
B2B marketers?
RQ2: What forms and frameworks can be used to study greenwashing
in B2B markets?
RQ3: What areas of greenwashing need further research and what
are the related research questions?
2. Methodology
2.1. Systematic literature review as a method to study greenwashing
The constantly expanding research on the topic of greenwashing
lacks a rigorous analysis of the extant literature on the subject. A sys­
tematic review can give a comprehensive picture of the current state of
the art on greenwashing, connect the seemingly disparate bodies of
work, identify gaps in the literature, and inform future research by
locating, evaluating, and synthesizing the relevant literature in a sys­
tematic manner (Paul & Criado, 2020). The results of such an under­
taking can be utilized to advance scholarly research and debates, but
also to inform and guide public policy, and help further educate and
raise awareness among different stakeholders (Paul, Lim, O'Cass, Hao, &
Bresciani, 2021).
Greenwashing has attracted the attention of academics, businesses,
and policymakers in recent years, so it is not surprising that previous
attempts have been made to map this area and find fruitful future
research directions. One approach is bibliometric analysis (e.g., Pendse,
Nerlekar, & Darda, 2023; Santos, Coelho, & Marques, 2023a), which is
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Industrial Marketing Management 115 (2023) 281–299
limited to mapping greenwashing and provides a more descriptive
analysis of previous greenwashing research (e.g., authorship and
collaboration practices, preferred journals for publication, commonly
used keywords, etc.). A more comprehensive approach that provides a
solid conceptual foundation for future greenwashing research is a sys­
tematic literature review. Several systematic literature reviews on
greenwashing have appeared in recent years, all of which had a specific
focus and therefore had certain shortcomings. These systematic litera­
ture reviews focused on main definitions of greenwashing and its evo­
lution in a certain limited period of time (De Freitas Netto, Sobral,
Ribeiro, & Soares, 2020; Yang, Nguyen, Nguyen, Nguyen, & Cao, 2020),
characteristics and forms of greenwashing (De Freitas Netto et al., 2020;
Gatti, Seele, & Rademacher, 2019; Lyon & Montgomery, 2015; Yang
et al., 2020), the impact of greenwashing on stakeholders (Santos et al.,
2023a), greenwashing in relation to sustainability reporting and artifi­
cial intelligence (Moodaley & Telukdarie, 2023), understanding and
mitigating the causes of greenwashing by multinational companies in
host developing markets, particularly in Asia (Yang et al., 2020), prin­
ciples for detecting and reducing greenwashing (Gatti et al., 2019).
However, none of these reviews provide a comprehensive overview and
assessment of the antecedents of greenwashing, its consequences, and
moderators, while future research implications for marketing commu­
nications and/or B2B marketing in particular are very limited or non-
existent.
In conceptualizing this study we follow an emerging systematic re­
views stream within the international business and international mar­
keting literature (Christofi, Leonidou, & Vrontis, 2017; Christofi,
Pereira, Vrontis, Tarba, & Thrassou, 2021; Christofi, Vrontis, & Cado­
gan, 2021; Pereira, Hadjielias, Christofi, & Vrontis, 2023; Sinkovics &
Reuber, 2021; Vrontis et al., 2022; Vrontis & Christofi, 2021). System­
atic reviews help in understanding the breadth as well as the frontiers of
a given research area, and add nuance and context to it (Christofi,
Vrontis, & Cadogan, 2021). They provide “rigorous assessment of the
literature” based on clearly articulated research problems, and a sys­
tematic, meticulous selection and critical assessment of a set of pub­
lished studies on the topic (Christofi et al., 2017). It is aimed to
transcend the limitations of generic narrative reviews, by developing
transparent, scientific and ultimately applicable research procedures
and practices, from sampling, to reaching out to respondents and
reporting the results (Vrontis & Christofi, 2021). Such an approach is
replicable, and its outcomes characterized as more rigorous, valid and
generalizable (Christofi, Vrontis, & Cadogan, 2021). Key feature of this
is the transparency and replicability of the research process in its totality
(Vrontis & Christofi, 2021).
The review was designed to be an inclusive one, generating a sample
of articles that apply quantitative, qualitative or mixed methods, or
come in the form of conceptual or theoretical studies. In addition to
mapping and interconnecting the research area, the systematic review
serves as a foundation for us to outline a future research agenda, which
is a key element of the systemic review approach (Pereira et al., 2023).
While focused on international marketing and IB perspectives, the re­
view was open to a plurality of approaches as essentially greenwashing
calls for interdisciplinary perspective and move beyond IB's and mar­
keting's intellectual silo (Sinkovics & Reuber, 2021) in studying and
addressing it.
The review is intended to transcend several urgent issues that the
greenwashing debate is facing. For example, governments are interested
in finding out if their regulations are really successful in preventing
greenwashing. Companies are interested in finding out how technolog­
ical advances (e.g., AI, blockchain) can help prevent greenwashing
among their business partners in an international environment full of
dynamic change; in other words, how to combat greenwashing given the
rise of sustainability, the circular economy, and the regenerative econ­
omy. Finally, consumers are also interested in learning how to protect
themselves from greenwashing. In summary, the number of companies
greenwashing or thought to be greenwashing is increasing in the EU,
A. Vangeli et al.
which means that the topic is gaining scientific and societal relevance.
Furthermore, the research area is not very intersubjective, which is a
concern in that key concepts and measures often vary from person to
person.
2.2. Article selection
We use SCOPUS and Web-of-Science (WoS) databases to search for
relevant articles in the research area. As these two databases are the
largest databases of scientific articles uniting various publishers and are
widely used for systematic literature reviews in top-tier journals (e.g.
Christofi, Vrontis, & Cadogan, 2021), we assume our choice to be
justified. Similar to previous literature reviews on greenwashing phe­
nomenon (e.g., De Freitas Netto et al., 2020; Gatti et al., 2019; Lyon &
Montgomery, 2015; Yang et al., 2020) we did not want to limit our
search by narrowing it down with additional specific keywords that
would relate for instance to B2B marketing, but rather used keyword
“greenwashing” for our search.
The search among title, abstract and keywords revealed 731 articles
in Scopus and 547 articles in WoS. In the next step we limited the search
results only to peer-reviewed articles that provide for a trusted form of
scientific communication opposed to non-peer-reviewed works. In
addition we limited results only to articles that appeared in English
language. The result of this step revealed 529 articles in Scopus and 449
articles in WoS. As we were interested in greenwashing in marketing
context, we limited in the next step search results to business and
management disciplines. Specifically, we used two separate criterions in
WoS (business, management), while in Scopus we limited results to
“business, management and accounting”. This resulted in 264 articles in
Scopus and 152 articles in WoS, which together accounts for 416 arti­
cles. We downloaded both databases in excel and removed 136 dupli­
cates in the next phase, leading to 280 articles. The next stage involved
articles abstracts screening, where we were searching for possible
connection between greenwashing and marketing. This step focused on
excluding articles that had no relevance with the reviewed topic (i.e.,
greenwashing was mentioned only as a phenomenon in a sentence
related to some other topic, while no in-depth discussion or evaluation
was provided). At this stage we eliminated additional 76 articles. We
downloaded and read through the remaining 204 articles in full-text
format. In this phase, each researcher separately reviewed and criti­
cally evaluated the selected papers according to specific quality criteria
jointly established by the authors, which were cross-checked by two
academic researchers who are also experts in the field. The aim of the
quality assessment is to assess validity and justify the selection of articles
for review (Christofi et al., 2017). We excluded articles in which
greenwashing was only briefly mentioned in the abstract or introduction
and was not part of the main model/main body of the article, or in which
no implications for greenwashing were given in the discussion section of
the article. In addition, we did not limit our search results strictly to
empirical studies, as we believe we would thereby limit also our findings
– conceptual papers may significantly contribute to theory development,
thus we believe it is imperative to include them. After reconciliation of
results between researchers and mutual agreement based on quality
criteria, 60 articles remained for the review process. As formal search
techniques of entering keywords to electronic databases may overlook
important studies (Nielsen, Asmussen, & Weatherall, 2017), we applied
a snowballing technique that is being widely used in the systematic
literature reviews lately (e.g. Christofi, Pereira, et al., 2021; Christofi,
Vrontis, & Cadogan, 2021). By a thorough review of the references of
already included articles we identified additional 8 articles to be added
to our review sample. Hence, our final review sample consists of 68
articles (see Fig. 1 for the article selection procedure).
2.3. Coding
We applied a multistep qualitative coding following best-practice-
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Industrial Marketing Management 115 (2023) 281–299
recommendations (Gaur & Kumar, 2018) to be most suitable method
for the analysis. First, we documented basic facts about each article:
number of authors, location of the first author, authors' team composi­
tion, year of publication, publication outlet, type of the paper (empir­
ical, conceptual), core topic/context of the study, applied methodology,
theories used, industry and level of analysis. In addition, we coded also
number of citations to perform a citations analysis. We followed the
example of other systematic literature review (e.g. Christofi, Vrontis, &
Cadogan, 2021) and coded the location where the study was conducted
and later grouped countries in three categories following World Bank's
annual gross national income (GNI) per capita: developed (high in­
come), emerging (middle income) and developing (low income)
countries.
This is a framework-based systematic literature review that builds on
the established Antecedents, Decisions, and Outcomes (ADO) frame­
work (Paul & Benito, 2018). Specifically, we use an antecedents-
phenomenon-consequences logic (Christofi, Vrontis, & Cadogan, 2021;
Pisani, Kourula, Kolk, & Meijer, 2017), treating greenwashing as our
phenomenon. The antecedents category includes studies that address
the drivers, motives, or incentives for greenwashing, while the conse­
quences category includes studies that address key outcomes related to
greenwashing. We believe that the framework approach is appropriate
for examining the greenwashing field because it can help us achieve the
greatest possible breadth and depth in the review (Paul et al., 2021), and
it has been shown to be a more robust structure than other types of
systematic literature reviews (Paul & Criado, 2020). Indeed, compared
to all other types of domain-based reviews, framework-based reviews
are often more useful and impactful (Paul et al., 2021).
3. Findings
3.1. Articles main characteristics
The descriptive analysis revealed that the phenomenon got higher
attention1 among scholars in the recent years (see Fig. 2). Journal of
Business Ethics, Business Strategy and the Environment and Journal of
Cleaner Production are the three most influential journals in the area of
research (see Table 1 for citation analysis). First ten most cited articles
are shown in Table 2.
The sample of reviewed articles consists of 60 (88%) empirical
studies and 8 (12%) conceptual articles. Quantitative methods were the
most widely applied method in the empirical studies (87%). Survey is
with 38% ranked as the first most used method, followed by firm data
quantitative analysis (CSR reports, social media posts, web page
screening, etc.) (29%), experiments supported by survey (17%), in-
depth interviews (8%), focus groups (3%), case study (2%), stock mar­
ket data (2%) and online opinions about greenwashing ads (2%). There
were 5 studies that applied mixed method research. Most common
method to analyse the data was regression (41%), followed by structural
equation model – SEM (27%), t-tests (mostly anova) (9%), econometric
models (7%), cluster analysis (3%) and sensitivity analysis (3%).
There were only 16 studies (27% of all empirical studies) that
applied scales in their studies, while the rest of quantitative studies make
an attempt to calculate a score depicting level of greenwashing (e.g.,
difference between symbolic and substantive actions as calculated by
Walker & Wan, 2012). Most often used (e.g., Akturan, 2018; Santos,
Coelho, & Marques, 2023b) scale was developed by Chen and Chang
(2013) who claim to have developed it based on works of Laufer, 2003
and Horiuchi & Schuchard, 2009. Their scale served also as inspiration
1
Although the number of articles appearing in the Scopus and WoS databases
increased exponentially, roughly doubling during the period 2010–2020
(Bornmann, Haunschild, & Mutz, 2021; Thelwall & Sud, 2022), the increase in
articles about the greenwashing phenomenon was much higher during this
period.
A. Vangeli et al.
Fig. 1. Articles screening procedure.
for the second most used (e.g., Ahmad & Zhang, 2020; Testa, Iovino, &
Iraldo, 2020) scale developed by Leonidou and Skarmeas (2017). There
are studies in this review dataset that developed their own scales (e.g.,
Blome et al., 2017; Neureiter & Matthes, 2022; Rausch & Kopplin, 2021)
(see Appendix 1 for their scale items). Finally, there are studies that use
proxy scales for greenwashing. For instance, Bulut, Nazli, Aydin, and
Haque (2021) use Hamzaoui Essoussi and Linton (2010) 5-items scale on
usage of recycled products to denote greenwashing, while Kapitan et al.
(2022) develop their own scale of B2B sustainability positioning to
address also greenwashing with Casidy and Yan (2022) adopting ten out
of thirty items of this scale in their research. Overall, scales used by
researchers indicate that greenwashing is unidimensional construct,
while the literature review clearly points at several forms and types of
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Industrial Marketing Management 115 (2023) 281–299
greenwashing (e.g., Fernandes, Segev, & Leopold, 2020; Gatti, Pizzetti,
& Seele, 2021; Parguel, Benoit-Moreau, & Russell, 2015; Seele & Gatti,
2017). We call for future research to develop a scale that will encompass
the multidimensionality of the greenwashing construct as discussed
more in the next chapter.
Empirical studies mostly investigated consumers (23 studies or
38%), followed by firms (22 studies or 37% studied more firms and 2
studies or 3% studied one selected firm), students (6 or 10%), industrial
buyers (3 studies or 5%), B2B firm executives (2 studies or 3%), while
the rest studied either tourists (2%) or families (2%). When studies were
analysing secondary data, often the analysis took into account data that
span across several years (longitudinal data). We see this particularly
when studies were analysing firm sustainability reports, their social
A. Vangeli et al. Industrial Marketing Management 115 (2023) 281–299

Fig. 2. Number of publications over the years.

Table 1 Table 2
Citations analysis for journals in the review (arranged based on the average nr. First ten most cited articles.
of citations).
Nr. Authors Journal Nr. of Citations Year of
Journal Nr. of Total nr. of Average nr. of citations per year publishing
papers citations citations
California
Delmas &
California Management Review 1 1988 1988 1 Management 1988 166 2011
Burbano
Organization Science 2 892 446 Review
Journal of Business Ethics 16 4786 299 Journal of
International Journal of 1 284 284 2 Chen & Chang Business 922 92 2013
Contemporary Hospitality Ethics
Management Parguel, Benoit- Journal of
Journal of Sustainable Tourism 1 167 167 3 Moreau & Business 868 72 2011
Journal of Advertising 2 317 159 Larceneux Ethics
Journal of Business and Technical 1 157 157 Journal of
Communication 4 Walker & Wan Business 598 54 2012
Journal of Business Research 3 441 147 Ethics
Marketing Intelligence & Planning 1 144 144 Marquis, Toffel & Organization
5 557 80 2016
Management Science 1 120 120 Zhou Science
Journal of Cleaner Production 8 901 113 Nyilasy, Journal of
Decision Sciences 1 69 69 6 Gangadharbatla Business 542 60 2014
International Journal of Advertising 4 248 62 & Paladino Ethics
Business Strategy and the 15 886 59 Journal of
Siano, Vollero,
Environment 7 Business 402 67 2017
Conte & Amabile
Industrial Marketing Management 4 157 39 Research
Journal of Service Management 1 32 32 Organization
8 Kim & Lyon 335 42 2015
Journal of Consumer Marketing 1 31 31 Science
Young Consumers 1 21 21 Journal of
Leonidou &
Journal of Management and 1 2 2 9 Business 325 54 2017
Skarmeas
Organization Ethics
Journal of Management Studies 1 1 1 Business
Abacus 1 0 0 Strategy and
10 Seele & Gatti 311 52 2017
Asia-Pacific Journal of Business 1 0 0 the
Administration Environment

media communications, environmental advertising or firms accused of

greenwashing by third parties (e.g., Southern Weekend in China).
However, when collecting primary data none of the studies was longi­
tudinal. Furthermore, all studies except one (i.e., Pizzetti, Gatti, & Seele,
2021) that investigated greenwashing at the firm level, took as a unit of
analysis a firm isolated from other business stakeholders, which is
problematic, as the literature clearly identified the role of whole supply
chains in greenwashing due to large impact of suppliers on the focal
firm's ethical and ecological footprint (Blome et al., 2017). Thus, future
research should include at least dyadic B2B data, if not data across whole
supply chains.
Various industries are represented in our sample: energy (3),
personal care and cosmetics (2), food and beverage (2), apparel (1),
logistics (1), mining and metals (1), technology (1). The rest of the
empirical studies (82%) did not focus solely on one industry but re­
ported to include various sectors, with only two studies being specific to
include 19 sectors listed in the study (Hassan, Roberts, & Atkins, 2020)
and 20 most polluting sectors according to Toxic Release Inventory
(Berrone et al., 2017). This confirms that greenwashing is not a sector
specific phenomenon, but rather a global phenomenon reaching across
various industries. Interestingly, only 26 (38%) studies were conducted
by an international team, while the rest of 42 studies were conducted by
scholars of the same nationality. This is a problem because the

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A. Vangeli et al.
phenomenon is rooted in the international landscape, where collabo­
ration between scientists would also be required to capture the phe­
nomenon internationally.
3.2. Key definitional dimensions and theories
3.2.1. Main definitions of “greenwashing” and related terms
The term ‘greenwashing’ has been associated with a number of
meanings and connotations by various authors. Its origins date back to
1986, when New York environmental activist Jay Westervelt noted that
hotels typically placed stickers in rooms to encourage the reuse of towels
for environmental reasons, when in fact they did not care about the
environment at all and their hidden agenda was to reduce the cost of
washing towels and increase profits (Romero, 2008). Following West­
ervelt's example, all such seemingly environmentally friendly actions
aimed at increasing profits were ultimately labeled as greenwashing
practices (Ahmad & Zhang, 2020). The term greenwashing originated
from the phrase “environmental whitewash,” which means “to cover up,
camouflage, or mask” (Akturan, 2018), and in its original meaning
carries a negative connotation implying corporate deception (Ahmad &
Zhang, 2020), “insincere, dubious, inflated, or misleading environ­
mental claims” (Akturan, 2018). Although greenwashing has attracted
considerable attention from various stakeholders in the field as well as
academic researchers since its emergence, there is no universally
accepted definition of the term (Torelli, Balluchi, & Lazzini, 2020),
which we also confirm through this literature review.
One of the often cited sources is Oxford dictionary, which describes
greenwashing as ‘activities by a company or an organization that are
intended to make people think that it is concerned about the environ­
ment, even if its real business actually harms the environment’ (Wedari,
Jubb, & Moradi-Motlagh, 2021). Second most often cited source are
Delmas and Burbano (2011) who understand greenwashing as the
integration of two corporate behaviors: poor environmental perfor­
mance and positive communication about environmental performance.
Third most often cited source is TerraChoice, which views greenwashing
as the act of misleading consumers regarding the environmental prac­
tices of a company or the environmental benefits of a product or service.
Besides well-established but diverse definitions some researchers pro­
vide for their own definition: co-creation of an external accusation to­
wards an organization with regard to presenting a misleading green
message (Seele & Gatti, 2017). From the marketing perspective, green­
washing is a result of over positioning an inconsistent communication
(Smith & Font, 2014). Greenwashing is “often mistakenly defined as an
intention and not caused by bounded rationality like ‘honest mistakes,’ a
lack of information, or other behavior not related to harmful objectives”
(Seele & Gatti, 2017; Nygaard & Silkoset, 2022). Ultimately, the defi­
nition of greenwashing is broad, but a common theme is misleading
communication (Lee & Raschke, 2023) and its harmful nature to envi­
ronmental progress (Glavas, Grolleau, & Mzoughi, 2023).
Recently, researchers have drawn attention to terms that are similar
to greenwashing but differ in their scope and understanding. One such
term is “brownwashing” that refers to the practice of underreporting
environmental achievements (Huang, Francoeur, & Brammer, 2022).
“Bluewashing” was derived from the color of the United Nations flag and
formulated at the 2002 World Summit to refer to greenwashing in
relation to humanitarian issues such as human rights, disaster relief, and
poverty reduction (Seele & Gatti, 2017). Cause-oriented marketing
campaigns that are not backed up by substantial action (e.g. symbolic
raising breast cancer awareness) are called out as “pinkwashing”
(Schoier & de Luca, 2017). “Redwashing” is the malpractice of claiming
“exemplary corporate citizenship” while having a negative effect on
indigenous communities (Perakslis, 2020); adherent in name only with
“woke” social movements in which identity politics plays a central role
has been known as “wokewashing” (Warren, 2022); the creation of in­
equalities and other negative developments through new forms of digital
marketing are known as “technowashing” (Perakslis, 2020). Another
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Industrial Marketing Management 115 (2023) 281–299
such term is “machinewashing”, which is defined as a strategy used by
organizations to exhibit misleading behavior (communication and/or
action) related to ethical artificial intelligence (AI)/algorithmic systems
(Seele & Schultz, 2022). Finally, when in response to the Russian in­
vasion of Ukraine in 2022, dozens companies announced that out of
moral concerns, they will withdraw from Russia, but many of them
failed to do so, the term “moralwashing” also emerged (Carter, 2022).
3.2.2. Towards a new typology of greenwashing
One of the most comprehensive typologies of greenwashing behavior
was proposed by Lyon and Montgomery (2015), who distinguish be­
tween following eleven mechanisms of misleading behavior:
I. Organizational theory domain: (1) decoupling (disconnect between the
structures and the activities of an organization), (2) symbolic manage­
ment (disconnect between promises and actions), (3) means/end
decoupling (disconnect between the actions and the goals of an orga­
nization), II. Economics domain: (4) astroturf lobbying (covert funding of
a “front group” that can make an argument more credibly than the
funder), (5) cheap talk (verbal claim with nothing to back it up), (6)
costly state falsification (expending effort to distort the ability of others
to verify the state of the world), (7) selective disclosure (disclosing
positive information while withholding negative information), III.
Marketing domain: (8) halo effect (inability to evaluate individual attri­
butes apart from an overall impression), (9) pooling (taking the same
costly action as a more able individual in order to appear identical), (10)
implied superiority (suggests one product is better than other without
quite saying so), (11) incomplete comparisons (comparison for which
adequate referents are not provided).
Greenwashing can take many forms (Fernandes et al., 2020), and
several attempts have been made (e.g., Delmas & Burbano, 2011; Gatti
et al., 2021; Kapitan et al., 2022; Szabo & Webster, 2021) to establish a
clear typology of greenwashing forms. However, all of these typologies
consider greenwashing at the firm level in isolation from the actions of
other actors in the marketplace. However, when greenwashing is viewed
from a B2B marketing perspective, the role of suppliers and industrial
buyers can be critical to the study of greenwashing effects. When
considering the source of greenwashing, one can distinguish between
direct greenwashing (the company itself is responsible for the commu­
nication and misconduct and is therefore referred to as the internal
source of greenwashing), indirect greenwashing (the supplier is
involved in both communicating sustainability and causing environ­
mental damage and is therefore referred to as an external source of
greenwashing), and vicarious greenwashing (a company committed to
sustainability is accused of greenwashing because it buys from a supplier
that does not meet sustainability standards) (Pizzetti et al., 2021). The
answer to the question of how companies engage in operational green­
washing provides us with the following 5 types of greenwashing (Seele
& Schultz, 2022): (1) Claim greenwashing (i.e., misleading with words,
which may include (a) misleading claims (b) inaccurate claims (c)
vague/unprovable claims (d) meaningless claims (d) exaggerations); (2)
Execution greenwashing (i.e., misleading through imagery or graphics,
which refers to various forms of visual rhetoric and semiotics and in­
cludes false or misleading seals, certifications, and labels); (3) injunctive
greenwashing (i.e., corporate practices that refer to (a) complete omis­
sion of information, (b) selective disclosure, (c) incomplete compari­
sons, (d) concealment of information); (4) symbolic greenwashing/
decoupling (i.e. Misleading through symbolic actions refers to an
inconsistency or disconnect between promises about, for example, social
and environmental initiatives and actual actions), (5) covert lobbying (i.
e., involves overt or covert activities outside the marketplace aimed at
favorable laws and regulations). The combination of these two di­
mensions (i.e., types and sources of greenwashing) gives us a novel,
unique framework (see Fig. 3) for examining the multidimensional na­
ture of greenwashing. We observe rich extant research at the cross-
section of claim/direct greenwashing (e.g., Berrone et al., 2017; Du,
2015; Fernandes et al., 2020; Fernando, Suganthi, & Sivakumaran,
A. Vangeli et al. Industrial Marketing Management 115 (2023) 281–299

Fig. 3. Proposed new greenwashing typology with the identified gaps in the existing research.
LEGEND: ✓ = rich extant research, ? = some extant research, X = little to no extant research.
Source: based on Pizzetti et al. (2021), Seele and Schultz (2022).

2014; Kahraman & Kazançoğlu, 2019; Lee, Cruz, & Shankar, 2018; Lee
& Raschke, 2023; Nygaard & Silkoset, 2022; Nyilasy, Gangadharbatla, &
Paladino, 2014; Panwar, Paul, Nybakk, Hansen, & Thompson, 2014;
Rausch & Kopplin, 2021; Smith & Font, 2014) and executional/direct
greenwashing (e.g., Ahmad & Zhang, 2020; Akturan, 2018; Boncinelli,
Gerini, Piracci, Bellia, & Casini, 2023; De Jong, Harkink, & Barth, 2018;
Parguel et al., 2015), as well as some extant research in the area of
omission/direct greenwashing (e.g., Neureiter & Matthes, 2022; Zhang,
Li, Cao, & Huang, 2018), symbolic/direct greenwashing (e.g., Siano
et al., 2017) and claim/vicarious greenwashing (e.g., Pizzetti et al.,
2021). The figure points to several unexplored areas that could be the
subject of future research.
Furthermore, greenwashing can occur at multiple levels: corporate
level, strategic level, dark level, and product level. Greenwashing at the
corporate level affects the company's image and reputation, green­
washing at the strategic level affects the company's future strategies,
greenwashing at the dark level refers to hidden illegal activities such as
money laundering or corruption, and greenwashing at the product level
refers to specific characteristics of a product (Torelli et al., 2020).
Combining these levels with the sources of greenwashing provides a
framework (see Fig. 4) that further strengthens our understanding of the
greenwashing phenomenon and the gaps in existing research.
From our analysis above, it is obvious that vicarious and indirect
greenwashing have received almost no attention. Some possible reasons
for this include that they resemble much more nuanced and complex
forms of greenwashing that are harder to identify and study than more
direct and obvious forms. In fact, we still lack the conceptual apparatus
that can help us define and operationalize these terms. Likewise, the
practice of greenwashing via lobbying – which is complex and opaque,
has so far remained understudied. The same goes for “dark level”
greenwashing, where the obvious lack of access to information, but also
the legal and security risks, methodological challenges, and the overall
controversial makeup of the topic, are some of the reasons that have so
far prevented any in-depth inquiry.
3.2.3. Theories used in current greenwashing research
Greenwashing phenomenon was studied through numerous theo­
retical lenses with 4 theories prevailing in the extant research: institu­
tional theory (e.g., Berrone et al., 2017; Delmas & Burbano, 2011; Guo
et al., 2018); attribution theory (e.g., Leonidou & Skarmeas, 2017;

Fig. 4. Level of greenwashing appearance with the identified gaps in the existing research.
LEGEND: ✓ = rich extant research, ? = some extant research, X = little to no extant research.
Source: based on Torelli et al. (2020); Pizzetti et al. (2021).

288
A. Vangeli et al.
Pizzetti et al., 2021; Szabo & Webster, 2021), signaling theory (e.g., Li,
Li, Seppänen, & Koivumäki, 2022; Santos et al., 2023b; Smith & Font,
2014) and legitimacy theory (e.g., Seele & Gatti, 2017; Torelli et al.,
2020; Lee & Raschke, 2023). Greenwashing is not merely an ethical
issue but is perceived by customers and affects their behavior (Nyilasy
et al., 2014), thus as a phenomenon calls for cross-disciplinary research.
Taking into account the methodology and theoretical implications that
the researchers have applied and developed in their work, we have
divided the 68 papers into 4 disciplines: marketing (49%), environ­
mental management (32%), sociology (12%) and economics (7%). We
developed an innovative framework (see Fig. 5) that combines these
disciplines with the theories applied in the studies (note: only most
commonly used theories are listed, while the actual list of applied the­
ories that were used only once is longer).
Based on the Fig. 5 we can conclude that, for instance, attribution
theory is merely applied by marketing scholars and legitimacy theory
Fig. 5. The inter-connection of theoretical domains based on theories applied in greenwashing research and theoretical gaps.
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Industrial Marketing Management 115 (2023) 281–299
only by environmental management scholars, while institutional theory
and signaling theory are used across these two disciplines. Stakeholder
theory was applied to study greenwashing in economics (Testa, Boiral, &
Iraldo, 2018) and environmental management (Lee & Raschke, 2023),
while social exchange theory in sociology (Siano et al., 2017) and
marketing (Casidy & Yan, 2022). Exclusive to economics is evolutionary
game theory (Sun & Zhang, 2019; Wu, Zhang, & Xie, 2020) and exclu­
sive to sociology is social theory (Siano et al., 2017). In marketing we
observe also studies that applied theory of reasoned action (Rausch &
Kopplin, 2021), theory of planned behavior (Bulut et al., 2021; Testa
et al., 2020) and attitude-behavior-context theory (Zhang et al., 2018),
while in environmental management impression management theory is
also being used (Hassan et al., 2020). In addition, there are 4 studies
based on primary data from B2B marketing that apply the following
theories to examine greenwashing: cognitive dissonance theory (De
Jong et al., 2018), perceived risk theory (Chen & Chang, 2013), B2B
A. Vangeli et al.
sustainability positioning (Kapitan et al., 2022) and social exchange
theory (Casidy & Yan, 2022). Finally, this research identified theoretical
gaps in the study of greenwashing between marketing and economics,
environmental management and sociology, and a combination of three
to four disciplines. In addition, there are few studies that address the
social and governance aspects of greenwashing, so we call for future
research to fill this gap.
3.3. Synthesis of key findings
This chapter provides a synthesis of the antecedents, outcomes, and
moderators of existing greenwashing research.
3.3.1. Antecedents
First, we consider the antecedents or drivers of greenwashing. The
seminal work of Delmas and Burbano (2011) serves as one of the most
comprehensive classifications of drivers of greenwashing to date.
Legitimacy theory (DiMaggio & Powell, 1983) and signaling theory
(Connelly, Certo, Ireland, & Reutzel, 2011) are most commonly used by
researchers to explain drivers of greenwashing. On the one hand,
legitimacy theory asserts that companies engage in social responsibility
to gain corporate legitimacy (e.g., Walker & Wan, 2012). On the other
hand, signaling theory argues that companies that engage in sustain­
ability effectively signal the company's positive social and environ­
mental values to the company's stakeholders (Seele & Gatti, 2017). The
literature review in this study shows that there are more than just these
two theories that have been used to explain corporate greenwashing
behavior. Therefore, we present a novel framework of drivers of
greenwashing (see Fig. 6) that distinguishes between stable external
market drivers (environment, government, culture), dynamic external
market drivers (supply chain drivers, social media, and other stake­
holders), and internal drivers (firm, product, and individual psycho­
logical drivers). Stable external market drivers are those that are
Fig. 6. Drivers behind greenwashing.
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Industrial Marketing Management 115 (2023) 281–299
constant over time and do not change with each disruption: For
example, cultural values or norms need a dramatic shift in society to
change; sustainability ratings and regulations need consensus at the
institutional or governmental level, etc. Dynamic external drivers, on
the other hand, are characterized by constant change, activity, or
progress: For example, competitive pressures or buyer demand change
daily. B2B marketers are particularly interested in supply chain drivers,
which have not been sufficiently explored in the existing literature.
3.3.2. Outcomes
Greenwashing is mostly associated with negative outcomes (Blome
et al., 2017), including lower green purchase intentions (Bulut et al.,
2021), reduces organizational credibility (Fernandes et al., 2020),
corporate financial performance and reputation (Leonidou & Skarmeas,
2017), limits the adoption of sustainability practices in SMEs (De Steur,
Temmerman, Gellynck, & Canavari, 2020), and overall damages con­
sumer attitudes towards green purchasing (Parguel, Benoît-Moreau, &
Larceneux, 2011). Most of the greenwashing literature has focused
almost exclusively on consumer responses, overlooking the impact of
greenwashing on other stakeholders (Gatti et al., 2021). We propose a
new classification of greenwashing outcomes (see Table 4) that ad­
dresses these shortcomings and considers multiple levels of analysis
(product, employee, firm, customer, B2B relationship, and societal) as
well as whether greenwashing impacts are economic, environmental, or
social. The analysis points to several under-researched areas in relation
to the effects of greenwashing: the employee level in relation to all three
greenwashing effects and the B2B relationship level in relation to eco­
nomic and environmental greenwashing effects. Interestingly, despite
the abundant literature on consumer responses, there is a distinct lack of
research on economic impacts. These are all fruitful areas for future
research.
A. Vangeli et al. Industrial Marketing Management 115 (2023) 281–299

Table 4
Synthesis of greenwashing outcomes based on a proposed new classification.
Economic Environmental Social

Product • reduced product quality perceptions • green brand trust • perceived risk
• brand evaluation • value of green products • brand credibility
• brand hate • brand associations
• brand equity • brand avoidance
• timely or considered brand response
Employee • talent attraction and retention • blame attribution • employee engagement
Firm • corporate financial performance • corporate environmental performance • corporate legitimacy
• lost sales • corporate environmental reputation • marketing communication credibility
• cumulative abnormal returns on the stock • CSR efforts • discussion against the company online
market • CSR reporting • perceived integrity
• firm's market share • psychological resilience
• increase in overall CSR spending • strategies to regain customer's trust
• stock exchange rating
• market demand
Customer • willingness to pay more for • green purchase intention • customer satisfaction
environmentally friendly products • consumer attitudes towards green • information seeking
purchasing • consumer awareness
• green consumer confusion • green word-of-mouth
• consumer confidence
• scepticism
• perceived integrity of communications
• online consumer engagement
• intention to revisit, participate
• risk perception
• attitude towards the ads
B2B • competency trust • impact on natural environment • relational trust
relationship • buyer's financial performance • buyer's relational performance
• negative perceptions by stakeholders
• risk in terms of external stakeholders” backlash
Society • intention to invest • green backlash • members of society are confused and overwhelmed by claims and
• investor's confidence in environmentally • undermined trust in corporate corporate motives in making such claims
friendly firms environmental impacts • shame
• assurance in the accounting statements • reduced credibility of sustainable • moral insurance
• scrutiny by NGOs mechanisms and initiatives
• environmental legitimacy

3.3.3. Moderators
Few of the reviewed studies used moderators in their models. Find­
ings suggest that corporate environmental performance information
counterbalances positive effect of executional greenwashing on brand
attitudes (Parguel et al., 2015), but counterintuitively makes green
advertising leading to negative brand attitudes (Nyilasy et al., 2014).
Furthermore, environmental involvement (knowledge and concern)
positively moderates relationship between vague and false green­
washing claim and perceived greenwashing (Schmuck, Matthes, &
Naderer, 2018), while environmental sensitivity of industry moderates
relationship between 4 greenwashing levels (corporate, strategic, dark,
product) and stakeholders perceptions (Torelli et al., 2020). Green
concern negatively moderates relationship between greenwashing
perception and green purchasing intentions (Zhang et al., 2018), while
organizational stigma strengthens the negative impact of greenwashing
on market demand and reputation and status decrease negative impact
of greenwashing on expectation violation (moral insurance) and trust­
worthiness (Kassinis et al., 2022). Stringent environmental regulations
weaken the effect of greenwashing on financial performance, low media
favourability makes greenwashing effect on financial performance
positive and media visibility negatively moderates the influence of
greenwashing on financial performance (Li et al., 2022). Finally,
greenwashing was used as a moderator itself. Greenwashing concern
negatively moderates between perceived environmental knowledge/
attitude/subjective norm/environmental concern influence on purchase
intention (Rausch & Kopplin, 2021) and negatively moderates the
relationship between electronic service quality and green purchase
intention (Ahmad & Zhang, 2020). Finally, greenwashing perception
decreases the effects of environmental concern on green behavior (Bulut
et al., 2021) and positively moderates the relationship between corpo­
rate environmental performance and cumulative abnormal returns (Du,
2015).
Despite all these rich findings, the extant research does not provide
an answer what tools managers or policymakers could apply to mitigate
greenwashing (Delmas & Burbano, 2011; Parguel et al., 2015). One of
the ways suggested in the literature is for companies to engage in green
word-of-mouth (WOM), which facilitates positive communication
among various stakeholders, but customer response is largely dependent
on green consumer involvement, so not all interventions are equally
successful (Ahmad & Zhang, 2020). The business model life cycle
assessment tool can be used to validate the sustainability of a particular
business model for a particular company, helping to avoid greenwashing
and strengthen the credibility of its environmental claims (Goffetti,
Böckin, Baumann, Tillman, & Zobel, 2022). B2B firms can work with
consumer protection organizations such as Greenwashing Index, Ter­
raChoice, Greenpeace, and Futerra, which focus on green advertising
verification, and launch a campaign to raise awareness of environmental
communication guidelines, such as the Green Guides published by the U.
S. Federal Trade Commission (FTC) (Fernandes et al., 2020). The UK
Department for Environment, Food, & Rural Affairs (DEFRA) (2011), the
Canadian Standards Association (CSA) (2008), and the Australian
Competition and Consumer Commission (2011) have issued similar
regulatory standards and practice guides to help consumers interpret
green advertising claims (Seele & Schultz, 2022).
However, previous research has shown that regulating greenwashing
does not necessarily increase the positive environmental effects of green
products, especially when the additional CSR costs are too high or the
CSR issue is not that important (Lee et al., 2018). In fact, the literature
reviewed mainly focused on methods to detect and prevent green­
washing to limit its negative consequences. A recent study by Glavas
et al. (2023) proposed 4 strategies on how greenwashing can be used to
promote more sustainable practices by companies: “(1) greenwashing
raises awareness and normalizes environmental friendliness; (2) a
greenwashing gaffe is instrumentalized to hold companies accountable

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by triggering an irreversible “ratchet effect” (forcing consistency be­
tween discourse and actions without allowing regression). (3) green­
washing as aspirational green talk that can be an important resource to
inspire and drive change; and (4) the management of greenwashing by
regulators enables them to advance their sustainability agenda, espe­
cially due to spillover effects in enforcement. In other words, as long as
there are some informed customers in the market, greenwashing can be
an incentive for some companies to go green (Lee et al., 2018).
4. Discussion
4.1. Tackling the risks and developing truly green B2B marketing
strategies
Companies must “evolve beyond reactionary tactics” (Kapitan et al.,
2022) of responding to greenwashing accusations and a posteriori
adaptation to the expectations by stakeholders. In line with B2B mar­
keting theory (Mora Cortez & Johnston, 2017), we here engage in a
discussion of established practices and new challenges looking forward.
Some greenwashing outcomes are a result of conscious decision to
manipulate/mislead or in any way engage in B2B marketing which
makes claims that cannot be substantiated. However, sometimes such
claims can be made unintentionally – this is without awareness that a
misleading message is being sent. When determining intentionality a
good rule of thumb is the size of the marketing budget especially seen in
the context of the product/service marketed, the timing of the marketing
campaigns, and ideally, relative to the budget earmarked for actually
improving the environmental impact. The oil and gas industry presents a
case in point, where companies spend very high amounts on marketing
to alleviate criticisms by stakeholders and society on their green prac­
tices, often during periods of political campaign when such issues are
widely debated (InfluenceMap, 2021). In this sense, it is hard to argue
that some of the world's largest companies, with some of the world's
largest marketing budgets, commit greenwashing unintentionally. Evi­
dence from China also suggests that companies with poorer environ­
mental performance invest more in green publicity campaigns in the
media (Cao, Faff, He, & Li, 2022).
We suggest a dual framework that consists of: a) prevention-
detection-correction model typical for quality control operations; and
b) creating conditions that facilitate and incentivize substantive green
action and its proper communication. The prevention-detection-
correction model is an established framework in various domains,
such as food safety (Rouvière & Caswell, 2012) or anti-corruption. The
applicability of a framework that originates in these two fields – food
safety, and corruption, is not accidental. Food safety shares the same
biopolitical roots with environmental activism, whereas there are
proximities between anti-corruption and anti-greenwashing given that
they are both addressing transgressive behaviors and trust deficits.
Conventional approach to preventing intentional greenwashing may
seek solutions in blending voluntary business action with an institu­
tional and regulatory approach, i.e. by the formulation of industry-level
standards, blueprints and best practices that deter companies from
consciously engaging in deceptive marketing/communication (Wedari
et al., 2021). Legitimate third-party certifications can play an important
role in preventing greenwashing. These are certifications issued by in­
dependent international bodies that conduct close inspection of the
practices of companies, and often of the whole supply chain (Heras-
Saizarbitoria, Boiral, & Díaz de Junguitu, 2020). These certifications are
valid and have value across different national contexts and can be an
important resource for green global branding endeavors. All of these
measures, however, must be also strengthened by supporting relevant
laws and regulations and their implementation (Sun & Zhang, 2019).
Regarding all these measures, however, one needs to be aware that
measures to prevent transgressions, are not in themselves sufficient to
inspire or motivate substantive green action.
To prevent unintentional greenwashing practices, on the other hand,
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Industrial Marketing Management 115 (2023) 281–299
companies must build their capacities in the form of education and
training of employees across various departments and levels of the hi­
erarchy, on both the environmental component of the operations of the
company, its products and/or services, and their impact, and the way
they should be communicated to other businesses and consumers.
Learning how to use clear, specific and accurate language is an impor­
tant building block towards developing effective substantive green
marketing strategy, and preventing unintentional greenwashing. Like­
wise, contrary to the marketer's urge to oversell, in the case of green
marketing, not overstretching one's claims is a crucial step in preventing
unintentional greenwashing. Companies have the obligation to accu­
rately represent their environmental endeavors and the relative green­
ness of their products and services. In this sense, it is their actual
commitment to the environment that creates value – and not the green
marketing campaign per se – the green marketing campaign serves as
publication tool that accurately portrays but does not embellish reality.
Education and training in this sense need to be cross-departmental – as
marketing and communication professionals need to learn about envi­
ronmental impacts, while those work on environmental issues need to
learn how to communicate the insights into the company's work in a
better way. In the process, businesses can learn from the greenwashing
education of activists (Eng et al., 2021). A related practice is to ensure
continuous review of communications and marketing materials of the
company. In sum, only strong and robust internal communication can
serve as a foundation of strong external communication.
To detect greenwashing or rather to establish whether greenwashing
accusations are grounded or not, extensive in-depth research and in­
vestigations are required, that would be rooted in sound methodology
and clearly defined concepts and measurements. The work of Nemes
et al. (2022) has been pioneering in this regard, offering an integrated
framework for addressing greenwashing, which combines different
definitions and criteria for defining greenwashing, as discussed above.
At the same time, a particular emphasis needs to be put on unintentional
greenwashing; here efforts should be made in detecting the reasons for
making claims that cannot be substantiated (e.g. errors, miscommuni­
cation, using inappropriate terminology). Successful detection then can
give way to correction, while setting the foundations for successful
prevention measures in the future.
Correction measures, should there be a clear case of intentional
greenwashing, involve various financial and legal penalties, as well as
obligations to acknowledge the damage done, and make substantial
changes in the way the company communicates its environmental
impact. There are several options to be considered here, based on in­
sights from the food industry (Rouvière & Caswell, 2012). First, various
forms of repressive sanctions (from fines to prosecution to recalls to
closure) could be considered for most serious and repeated breaches of
green marketing ethics. Then they can be coupled with informative
sanctions. This should be coupled with across-the-board education and
training, and reflective discussions among employees and stakeholders.
Parallel to the corrective measures, however, companies need to look to
the future and engage in preventive behavior. Finally, there is the option
to “name and shame” greenwashers publicly. An important caveat to this
point, however, is the insight that punitive measures are not as efficient
deterrents against greenwashing as high costs of substantive green ac­
tions are (Lee et al., 2018).
At the core of this framework, however, lies a process of soul-
searching of companies, through which they need to formulate their
understanding of their actual and desired holistic environmental impact,
which is the prerequisite of effective and substantive green B2B mar­
keting. This requires a genuine stakeholder-oriented approach and
seeking the input of various relevant actors, as well as optimization of
intra-organizational practices so as to better fit the mission of the
company.
A. Vangeli et al.
4.2. Future research roadmap
While the research agenda in international business and marketing
has been inevitably transformed by the rise of anti-greenwashing vigi­
lantism, there are a number of potential research questions that need to
be considered in future research endeavors, especially to advance the
understanding of greenwashing in a B2B marketing context (see
Table 5). Acts of greenwashing themselves can be already interpreted in
light of a transforming logic of international business (Glavas et al.,
2023), however, this notion is not exploited sufficiently in the literature.
Moreover, the literature can be moved forward by centering the agenda
on the role of the ‘beholders,’ i.e. by reflexively engaging with the
myriad of themes, tropes and narratives among critics of greenwashing,
and the way they intersect and contradict each other (Kahraman &
Kazançoğlu, 2019). The differences among anti-greenwashing cam­
paigns should also be addressed (Gosselt, van Rompay, & Haske, 2019).
It is somewhat surprising that some theories are not on the list of
applied theories in the papers examined. For example, one would expect
marketers to talk about marketing myopia, a term coined by Theodore
Levitt in 1960 to describe a short-sighted and inward-looking approach
to marketing that focuses on the needs of the business rather than the
needs of the customer. Marketing myopia could explain greenwashing as
a form of marketing that focuses on short-term gains rather than long-
term sustainability. Similarly, the theory of strategic misrepresentation
in behavioral economics, introduced by organizational theorist Jeffrey
Pfeffer in his 1978 book Power in Organizations, could help explain
greenwashing because it states that players in a game theory may stra­
tegically misrepresent their preferences to gain an advantage over their
opponents, which can be done in a variety of ways, such as exaggerating
one's capabilities, understating one's interests, or even providing false
information. Moreover, there are studies that claim to apply green­
washing theory (Hassan et al., 2020; Kim & Lyon, 2015). However, we
believe that there is no single greenwashing theory, as there are a variety
of definitions and forms of greenwashing explained in Section 3.2.3.
Therefore, we suggest that scholars become much more specific when
making such general theoretical claims; for example, theorizing green­
washing as a form of corporate social responsibility, or as a form of
corporate environmentalism, or as a form of strategic communication,
etc.
Moreover, the intersections between anti-greenwashing discourse
and higher-order ideological constructs (Roulet & Touboul, 2015) as
well as other social justice causes remains a puzzle as well (Testa, Mir­
oshnychenko, et al., 2018), while at the same time, there is ample space
for studying analogous marketing developments such as ‘machine­
washing’ or the unsubstantiated claims of ethical use of disruptive
technologies (Seele & Schultz, 2022). Ideational diffusion perspectives
could help further our understanding of the advancement and vocali­
zation of the environmental knowledge among different stakeholders
(Majeed & Kim, 2022), including companies engaged in B2B marketing.
This, however, should include advancing the research on misperceptions
of greenwashing, i.e. wrongful accusations of greenwashing and the
motivations behind them. In fact, an unaddressed deep conceptual
problem that needs to be tackled is that stakeholders, when engaging in
vigilantism against greenwashing, and also when surveyed or inter­
viewed, talk from idealistic perspective, which often exceeds the limits
of and disregards what is doable in practice (Torelli et al., 2020).
The focus on beholders also means studying perceptions and in­
teractions and expanding the set of stakeholders studied (De Steur et al.,
2020). Marketing activities such as advertising, and their consequences,
are in themselves interesting examples, as aside from communicating
and leaving environmental impact themselves, while also affecting at­
titudes and behaviors of others beyond the marketing of the product/
service in question (Hartmann, Marcos, Castro, & Apaolaza, 2022). The
advancement in the research of perceptions and interactions in B2C
context (Bulut et al., 2021; Rahman, Park, & Chi, 2015), including the
role of non-environmental factors such as the role of websites
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Industrial Marketing Management 115 (2023) 281–299
interactivity in forming perceptions of greenwashing (Szabo & Webster,
2021), lay forward a challenging agenda for studies carried out in a B2B
context. Such research can provide empirical insight into the signifi­
cance of greenwashing perceptions on making the decision to make a
purchase or not (Rausch & Kopplin, 2021). Here, it is important to
consider that ultimately environmental considerations are just part of
the decision calculus, so it is important to examine them in relation to
other factors (Ahmad & Zhang, 2020; Testa et al., 2020). The different
idiosyncratic reasoning processes that characterize different actors and
relationships open another avenue for further research (Schmuck et al.,
2018).
A reflexive approach can also be useful in advancing the study on the
phenomenon on greenwashing in the context of B2B marketing itself. A
worthwhile line of inquiry is to determine which companies are more
likely to greenwash under what conditions remains a challenge (Lee &
Raschke, 2023; Wu et al., 2020). The different aspects of greenwashing –
such as intentionality need to be explored (Testa, Miroshnychenko,
et al., 2018). Understanding intra-organizational communication and
organizational decision-making on environmental issues and how they
are externally communicated (Delmas & Burbano, 2011). Finally, the
literature can be advanced by developing nuances in the understanding
of the severity of greenwashing and moving beyond binary categoriza­
tion (Uyar, Karaman, & Kilic, 2020). Greenwashing should also be
studied in cross-cultural perspective, and cross-temporal, longitudinal
one, as the phenomenon itself is quite dynamic (Guo et al., 2017).
Expanding the set of drivers and motivations to include different
personal, managerial, organizational and external market and
nonmarket features (De Steur et al., 2020; Hassan et al., 2020) as well as
organizational practices (Neureiter & Matthes, 2022). Related to this is
the need to better understand the role of institutional pressures, which,
if exceeding the capacities of the firm, can potentially induce green­
washing in a desperate attempt to meet the expectations of the stake­
holders (Testa, Boiral, & Iraldo, 2018). Better understanding of the
institutional, regulatory, and policy context is important as well (Sun &
Zhang, 2019). The media often play a complicit role in greenwashing,
which is an under-researched topic (Cao et al., 2022). On the other hand,
media and in particular social media can play a role in pushing an anti-
greenwashing agenda (Fernando et al., 2014). The impact of new
technologies, in particular blockchain, can offer insights in tackling
greenwashing as well (Nygaard & Silkoset, 2022). Green e-commerce
and digital marketing channels are promising venues for research as
they offer rich data points (Topal et al., 2020).
There is ample space to explore different focal objects when it comes
to greenwashing. Most of the literature is examining greenwashing at
the level of the firm, however, product- or service-focused approach
(Ioannou et al., 2022), or in a more reflexive fashion, practice-focused
approach could provide different insights and allow more flexible
comparisons of different green marketing endeavors pursued by a same
company, or specific, product- or service-focused interfirm comparison.
This would be particularly important when done in the context of B2B
interactions in the context of global value chain and dealing with
environmental issues and environmental vigilantism (Blome et al.,
2017). Deepening our understanding of the claiming and blaming dy­
namics within global value chains is a particularly worthwhile research
direction to be advanced (Pizzetti et al., 2021). Finally, the role of power
as part of pressure from competitors or industrial buyers in global value
chains has not yet been sufficiently explored, and the claim that smaller
actors in global value chains are more susceptible to greenwashing
(Chitaka, 2021) needs further examination.
Methodological innovations, e.g. using experiments and control
groups to improve research quality, can greatly help advance the
research agenda (Gatti et al., 2021; Heras-Saizarbitoria et al., 2020).
More work can be done on conceptualizing and measuring environ­
mental actions (e.g. direct vs indirect); expanding the data universe to
include voices from within companies – dissenting or defending (Wedari
et al., 2021); as well as voices of other actors (e.g. NGOs); and smaller
A. Vangeli et al.
Table 5
Research agenda: Domain, research gaps and research questions.
Challenge Research gap
The rise of anti-greenwashing
activism greatly affects the
research agenda in international
business and international
Understanding the marketing, but the literature still
psychology lacks sufficient work on the anti-
beholders of greenwashing vigilantism itself
greenwashing as a phenomenon
The intersections between anti-
Understanding anti- greenwashing discourse and
greenwashing higher-order ideological
vigilantism as an constructs, as well as other social
ideational justice causes, remain a puzzle in
phenomenon the literature
Understanding the
biases and In the literature, there is an
misperceptions awareness that the anti-
inherent in the anti- greenwashing discourse can be
greenwashing biased, but this has not been
discourse prominently addressed so far
While the literature focuses quite
substantially on greenwashing at
the level of the firm or industry,
it often overlooks vicarious
Examining greenwashing, as well as partial
greenwashing at greenwashing (i.e. greenwashing
different levels of in some specific parts of the
analysis operations)
There is a need for a deeper
understanding of the conditions
under which companies are
more likely to greenwash, the
intentionality behind
greenwashing, and the severity
Developing reflexivity of greenwashing.
The literature needs to expand
the set of drivers and
Expanding the set of motivations that make
drivers and companies greenwash, or
motivations combat greenwashing
Research questions
RQ1.1. How can acts of
greenwashing interpreted in the
context of international
business transformation?
RQ1.2. How do the myriad of
themes, tropes, and narratives
among critics of greenwashing
intersect and contradict each
other?
RQ1.3. What are the differences
among anti-greenwashing
campaigns?
RQ1.4. How can we make sense
of individual greenwashing
backlash events at the B2B
level?
RQ2.1. How does anti-
greenwashing discourse
intersect with higher-order
ideological constructs and other
social justice causes?
RQ2.2. How can ideational
diffusion perspectives help
further our understanding of the
advancement and vocalization
of environmental knowledge
among different stakeholders?
RQ2.3. How is the
greenwashing vigilantism
related to vigilantism against
unsubstantiated claims in other
domains (i.e. other types of
-washing)?
RQ2.4. How can the expanding
and complex semantics that
surround greenwashing debates
in theory and practice be
captured?
RQ3.1. How can we better
understand the misperceptions
of greenwashing and the
motivations behind them?
RQ3.2. How does the idealistic
perspective from which the
stakeholders speak match
against the capabilities of the
companies, as well as their
limitations?
RQ4.1. What insights can a
product- or service-focused
approach provide into
greenwashing?
RQ4.2. How does greenwashing
manifest in the context of B2B
relationships and global value
chains?
RQ4.3. What are the claiming
and blaming dynamics within
global value chains in relation
to greenwashing?
RQ5.1. Which companies are
more likely to greenwash under
what conditions?
RQ5.2. How do institutional
pressures induce greenwashing?
RQ5.3. How can the voices from
within companies and other
actors be included in the
research?
RQ6.1. How does the
institutional, regulatory, and
policy context impact
greenwashing?
294
Industrial Marketing Management 115 (2023) 281–299
Sources Domains Theoretical lenses
Glavas et al., 2023
Kahraman &
Kazançoğlu, 2019
Gosselt et al., 2019
Consumer Behavior, Stakeholder Theory,
International Business Social Identity Theory,
Chun & Giebelhausen, Ethics, Non-market Socio-cognitive Theory,
2012 Strategy Institutional Theory
Roulet & Touboul,
2015; Testa,
Miroshnychenko,
et al., 2018
Majeed & Kim, 2022
Seele & Schultz, 2022 International Marketing Critical Discourse
Communication, Analysis, Social Identity
Corporate Social Theory, Socio-cognitive
Responsibility, Social theory, Persuasion
Marketing, Non-market Theory, Attribution
Siano et al., 2017 Strategy Theory
Torelli et al., 2020
Social Identity Theory,
Consumer Behavior, Socio-Cognitive Theory,
Cross-Cultural Social Contention,
Differences, Non-market Politicization,
Torelli et al., 2020 Strategy Attribution Theory
Ioannou, Kassinis, &
Papagiannakis, 2022
Blome et al., 2017
Strategic Management,
Supply Chain Resource-based view,
Management, Corporate Institutional Theory,
Pizzetti et al., 2021 Social Responsibility Stakeholder Theory
Lee & Raschke, 2023;
Wu et al., 2020
Testa, Boiral, &
Iraldo, 2018 International Business
Environments, Strategic
Management,
Organizational Behavior Organizational Identity
Wedari et al., 2021 and Communication Theory, Practice Theory
Corporate Social Stakeholder Theory,
Responsibility, Ethical Decision-Making
International Business Theory, Institutional
Sun & Zhang, 2019 Ethics, Decision Making Theory
(continued on next page)
A. Vangeli et al. Industrial Marketing Management 115 (2023) 281–299

Table 5 (continued )
Challenge Research gap Research questions Sources Domains Theoretical lenses

RQ6.2. How do different

In a rapidly evolving digital
landscape, communication,
perceptions and behavior are put
to the test; as this is the central
nexus behind the emergence of
greenwashing vigilantism, the
role of mediating technologies
needs to be carefully examined –
Understanding the role something that has been seldom
of mediators done before
There is an ever growing list of
measures taken to combat or
prevent greenwashing, but we
Assessing the know very little of how, or rather
effectiveness of to what extent are they
measures successful
While the current trends in the
literature is to take
greenwashing as fait accompli,
there is ample space for
discussing future trajectories of
companies that can go in the
direction of repairing the
reputation, but also, actually
Thinking beyond substantiating the claims
greenwashing originally made
The literature can greatly benefit
from innovative research designs
that expand the scope of
Research design research, the geographical area,
innovations and adopt novel methodologies
personal, managerial,
organizational and external
market and nonmarket features De Steur et al., 2020;
drive greenwashing? Hassan et al., 2020
RQ7.1. What role does media
play in greenwashing? Cao et al., 2022
RQ7.2. How does online
presence influence perceptions Szabo & Webster,
of greenwashing? 2021
RQ7.3. How do green e-
commerce and digital
marketing channels impact Topal, Nart, Akar, & International Marketing
greenwashing? Erkollar, 2020 Communication,
RQ7.4. How can new Digitalization,
technologies like blockchain Nygaard & Silkoset, Organizational Behavior Mediation Theory,
help in tackling greenwashing? 2022 and Communication Network Theory
RQ8.1. What are the
consequences of anti-
greenwashing vigilantism and
regulation? Kassinis et al., 2022
RQ8.2. How effective are
different measures to prevent, International Business
detect or correct greenwashing? Lee et al., 2018 Policy, Business Ethics, Stakeholder Theory,
RQ8.3. How do sustainability Corporate Social Institutional Theory,
ratings impact the Responsibility, Non- Organizational Behavior
greenwashing predicament? Parguel et al., 2011 market Strategy Theory
RQ9.1. How does one recover Guo et al., 2018;
from greenwashing scandals? Wang et al., 2020
RQ9.2. How does greenwashing
promote green principles in Sustainable Marketing,
rhetoric and motivate Sustainable Business
stakeholders to advance their Model, Strategic Resource-based View,
own green agendas? Glavas et al., 2023 Management Institutional Theory
RQ10.1. How can experiments Gatti et al., 2021,
and control groups improve Heras-Saizarbitoria
research quality? et al., 2020
RQ10.2. How does
greenwashing and the backlash
against it evolve over time? Wedari et al., 2021
RQ10.3. How does
greenwashing and the backlash
against it vary across different
countries and markets (in
particular emerging markets)? Wang et al., 2020 Mixed Methods
RQ10.4. How can industry-level Methodological Research, Experimental
analysis and cross-industry Advancements in Research Methods,
comparison reveal patterns of International Business and Grounded Theory,
similarity and difference? Nyilasy et al., 2014 Marketing Reflexivity

firms in addition to large MNEs that are a fixture in greenwashing
research (Berrone et al., 2017; Panwar et al., 2014). Moreover, the
debate can benefit from capturing the expanding and complex semantics
that surround greenwashing debates in theory and practice (Siano et al.,
2017). Industry-level analysis and cross-industry comparison can reveal
patterns of similarity and difference (Nyilasy et al., 2014). Geographical
expansion to include a greater variety of countries, including emerging
markets in addition to China (which has been extensively discussed in
the literature) and cross-country comparison can only enrich our un­
derstanding of greenwashing and the backlash against it (Wang et al.,
2020). Temporal expansion and longitudinal and across-time compari­
son as this is a very dynamic topic are also worthwhile additions to the
research agenda (Wedari et al., 2021).
The effectiveness of the different measures to prevent, detect or
correct greenwashing should be examined (Lee et al., 2018). Stigma and
sources of stigmatization, punitive measures, and other consequences of
anti-greenwashing vigilantism and regulation should be studied in
comparative perspective (Kassinis et al., 2022). A particular focus needs
to put on understanding individual greenwashing backlash events at the
B2B level, e.g. moments in time when vigilantism gets triggered by
perceived corporate malpractice (Chun & Giebelhausen, 2012).
Business-driven practices such as sustainability rating are also promising
topic for research with regards to coming up with solutions to the
greenwashing predicament (Parguel et al., 2011). Finally, greenwashing
should not be considered as a terminal act. Patterns of trust repair need
to be better understood, i.e. how does one recover from greenwashing
scandals (Guo et al., 2018; Wang et al., 2020).
Finally, greenwashing may not necessarily be a completely negative
development, as after all -as discussed above – it can potentially promote
green principles in rhetoric, while motivating other stakeholders to
advance their own green agendas, and prompting regulators to catch up
(Glavas et al., 2023). This last point is important, as external pressures

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are central to making progress on green issues – as the voluntary
environment-related disclosures are typically very low among com­
panies (Wedari et al., 2021). This then poses the challenge of
researching these effects in practice.
5. Concluding remarks
This systematic literature review is not without limitations. First,
despite a structured approach to literature searching and many efforts to
include all relevant studies, the final list of articles may not be complete
because some relevant studies may have been neglected. However, a
thorough review of the references and additional expert consultations
addressed this limitation to some extent. Second, the list of keywords
was limited to greenwashing, while this study could be further expanded
by including similar words with a broader meaning (e.g., false market­
ing communication, false sustainability communication) in the search
criteria. Because sustainability and marketing communication are well-
researched areas, the search would result in thousands of identified ar­
ticles, most of which are not the focus of this study, so we did not take
this approach. Third, we limited our study to academic databases,
whereas the inclusion of corporate works (e.g., white papers, annual
reports) and policy makers (e.g., greenwashing regulations and stan­
dards) could shed a very different light on the greenwashing phenom­
enon. Because we focused on analysing and synthesizing previous
research, we did not provide research propositions that would link the
elements, which would be a logical next step. Despite these limitations,
our review offers several future research directions and provides prac­
titioners, policymakers, and scholars with an up-to-date overview of the
greenwashing phenomenon.
Data availability
Data will be made available on request.
Acknowledgement
The authors acknowledge the financial support from the Slovenian
Research Agency (research core funding No. P5-0177).

Appendix 1 Greenwashing scales

Table A1
Most commonly used scales in empirical studies on greenwashing.

Chen and Chang (2013)

[five-point Likert scale from 1 (strongly disagree) to 5 (strongly agree); context of the study: Taiwanese buyers with purchase
experience of information and electronic products]
This product misleads with words in its environmental features.
This product misleads with visuals or graphics in its environmental features.
This product possesses a green claim that is vague or seemingly un-provable.
This product overstates or exaggerates how its green functionality actually is.
This product leaves out or masks important information, making the green claim sound better than it is.
Leonidou and Skarmeas (2017)
[seven-point Likert scale from 1 (strongly disagree) to 7 (strongly agree); context of the study: United States customers being
familiar with corporate environmental actions]
Most companies mislead with words about the environmental features of their products.
Most companies mislead with visuals or graphics about the environmental features of their products.
Most companies provide vague or seemingly un-provable environmental claims for their products.
Most companies overstate or exaggerate the environmental features of their products.
Most companies leave out or hide important information about the real environmental features of their products.
Neureiter and Matthes (2022)
[seven-point Likert scale from 1 (strongly disagree) to 7 (strongly agree); context of the study: German customers evaluating
environmental airline advertising]
The advertised measures of the ad portray the airlines as being more useful to the environment than they are.
The advertised measures sound more useful for the environment than they actually are.
The advertised measures of the ad are misleading.
Blome et al. (2017)
[seven-point Likert scale from 1 (strongly disagree) to 7 (strongly agree); context of the study: German multinational companies
with codes of conduct for sustainability]
The code of conduct serves only as ‘window dressing’ in our organization.
The code of conduct serves only to maintain the organization's public image.
Nygaard and Silkoset (2022)
[five-point Likert scale from 1 (strongly disagree) to 5 (strongly agree); context of the study: consumers' perception of misleading
information regarding the true quality of ecological vegetables]
I am unsure if ecological vegetables are ordinary vegetables sold as ecological.
It is extremely difficult to know for sure if ecological vegetables are what they claim to be.
It is difficult for me to know whether ecological vegetables are in fact ecological.
It is difficult for me to evaluate whether ecological vegetables are in fact ecological.
Torelli et al. (2020)
[seven-point Likert scale from 1 (completely false) to 7 (completely true); context of the study: undergraduate students'
perception of environmental communication]
The company attempted to enhance its reputation by presenting itself as environmentally aware.
The company has hidden intentions and interests.
The company wants to appear more environmentally aware than it actually is.
Rausch and Kopplin (2021)
[five-point Likert scale from 1 (strongly disagree) to 5 (strongly agree); context of the study: consumers evaluating greenwashing
concern in clothing industry]
I am concerned that sustainable clothes are not produced of environmentally friendly materials.
I am concerned that sustainable clothes are not manufactured under sustainable conditions.
I am concerned that the organization is only pretending green image.

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Contents lists available at ScienceDirect

Industrial Marketing Management

journal homepage: www.elsevier.com/locate/indmarman

Collaboration with machines in B2B marketing: Overcoming managers’

aversion to AI-CRM with explainability
Piotr Gaczek a, Grzegorz Leszczyński a, *, Amira Mouakher b
a
Poznań University of Economics and Business, Institute of Marketing, Poland
b
Espace-Dev, UPVD, Perpignan, France

A R T I C L E I N F O A B S T R A C T

Keywords: This paper links negative emotions to AI and examines their influence on aversion to collaborating with AI in
Decision-making customer relationship management. It aims to understand working with AI-CRM and considers AI-based rec­
Human-AI partnership ommendations in marketing decision-making. This article is empirically supported by three experimental studies
Customer relationships management (CRM)
involving over seven hundred B2B customer relationship management-committed managers. It demonstrates that
eXplainable artificial intelligence (XAI)
eXplainable Artificial Intelligence (XAI) is a tool that can help mitigate the dark sides of collaboration with AI
and increase the propensity to incorporate its suggestions in customer relationship management decision-
making.

1. Introduction
In recent years, Artificial Intelligence (AI) has been considered one of
the major forces reshaping companies’ marketing research, strategies,
and activities (Huang & Rust, 2021) as well as a recognized academic
research discipline in marketing (Mustak, Salminen, Plé, & Wirtz, 2021).
The positive influence of AI on B2B marketing performance has been
reported in data-driven decisions about customers (Troisi, Maione,
Grimaldi, & Loia, 2020), increasing value for customers (Libai et al.,
2020), enhancing customers’ loyalty (Chatterjee, Nguyen, Ghosh,
Bhattacharjee, & Chaudhuri, 2020), knowledge creation in organiza­
tions (Bag, Pretorius, Gupta, & Dwivedi, 2021), improved creative ca­
pabilities (Mikalef, Krogstie, Pappas, & Pavlou, 2020), and increased
efficiency, reliability, and routinization of organizations’ marketing
processes (Wamba-Taguimdje, Fosso Wamba, Kala Kamdjoug, &
Tchatchouang Wanko, 2020). Hossain, Agnihotri, Rushan, Rahman, and
Sumi (2022) show that AI-based B2B marketing analytics capability
helps sense, seize, and reconfigure the market to gain a sustained
competitive advantage. In response to the growing adoption of AI in
customer relationship management, recent studies have highlighted AI’s
potential for providing recommendations for customer relationship
management (de Jong, de Ruyter, Keeling, Polyakova, & Ringberg,
2021). AI adds new functions, capabilities, and opportunities to CRM,
enabling improved customer insight extraction and efficient customer
interaction management (Chatterjee, Rana, Tamilmani, & Sharma,
2021). Libai et al. (2020) expect that AI-CRM will significantly impact
how companies establish and develop relationships with business cus­
tomers. Building on recent studies on AI-CRM, we study the previously
unexplored question of how marketing managers work with it.
Studies on implementing AI models in companies indicate that their
advanced data collection, processing, and learning capabilities can
facilitate data-driven decision-making (Jabbar, Akhtar, & Dani, 2020;
Wamba-Taguimdje et al., 2020). AI-based advice can positively influ­
ence managers’ decision-making by supporting or assisting them (Dwi­
vedi, Rana, Jeyaraj, Clement, & Williams, 2019) and increasing
decision-quality perception (Keding, 2021). In the case of repetitive
customer behaviors, AI identifies patterns in massive datasets on cus­
tomers and their interactions with companies (Saura, Ribeiro-Soriano, &
Palacios-Marques, 2021). Due to this fact, AI surpasses human capabil­
ities, as humans are susceptible to cognitive fallacies and have limited
data processing abilities, while machines can efficiently perform such
tasks (Edmonds et al., 2019). As decisions in the B2B marketing are often
characterized by complexity, uncertainty, and volatility, AI can promote
analytic capacity, which makes decisions better informed and more
rational (Paschen, Kietzmann, & Kietzmann, 2019; Duan, Edwards, &
Dwivedi, 2019). However, the AI models must interact with many or­
ganizations collaborating to make a product or provide a service in the
B2B context. To analyze them, AI requires explanations from humans,
who are more adept at understanding the heterogeneity of business
customers and specific interactions with them because of intuition,

* Corresponding author.
E-mail addresses: piotrgaczek@ue.poznan.pl (P. Gaczek), grzegorz.leszczynski@ue.poznan.pl (G. Leszczyński), amira.mouakher@univ-perp.fr (A. Mouakher).

https://doi.org/10.1016/j.indmarman.2023.09.007
Received 31 October 2022; Received in revised form 8 August 2023; Accepted 14 September 2023
Available online 4 October 2023
0019-8501/© 2023 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-
nc/4.0/).
P. Gaczek et al.
heuristics, and experience (Xiong, Fan, Ma, & Wang, 2022). This role
can be played by boundary spanners, like customer managers, sales­
people, or customer-service technicians (Perrone, Zaheer, & McEvily,
2003). They can convert qualitative aspects of the B2B market envi­
ronment (de Bruyn, Viswanathan, Beh, Brock, & von Wangenheim,
2020), customer dynamic preferences and behaviors (Saenz, Revilla, &
Simón, 2020), or intuitive decisions made in ambiguous situations into
quantitative parameters of AI (Trunk, Birkel, & Hartmann, 2020).
Therefore, human-AI information exchange and learning can improve
decision-making by combining the formal rationality of AI and the
substantive rationality of humans (Haesevoets, De Cremer, Dierckx, &
Van Hiel, 2021).
Following Jarrahi’s (2018) and Schneider and Leyer’s (Schneider &
Leyer, 2019) conceptual suggestions on a partnership between B2B
marketing managers, we argue that collaboration between managers
and AI is based on the process of sharing information that enhances
mutual learning. Drawing on the works of Haesevoets et al. (2021) and
Burton, Gruber, and Gustafsson (2020), we argue that collaboration
with AI requires accepting it as a decision-making team member for
customer relationship management. So, managers act toward AI as if it
were their coworkers. For example, they may inquire about the rationale
behind a decision or demonstrate wanting emotional hostility and
aversion (Miller, 2019).
Although experimental research on B2B managers working with AI
has not yet considered the “dark side” of such collaboration, consumer
studies show that humans reveal negative emotions, aversions, and
concerns toward AI (Dietvorst & Bharti, 2020). This negative attitude
toward AI is partially due to its method of delivering results and its
transparency. When individuals lack a clear understanding of how AI
generates decisions, it is commonly perceived as opaque, hampering its
recommendations’ interpretability and trustworthiness, especially
among non-specialist users (Mahmud, Islam, Ahmed, & Smolander,
2022). This will result in a reluctance to exchange information among
managers, limiting the capacity of AI-CRM to support decision-making.
This study focuses on the relationship between negative emotions, AI
and their impact on reluctance to engage in collaborative efforts with AI
in customer relationship management. Using the Technology Threat
Avoidance Theory (TTAT) (Liang & Xue, 2009) and the integrated AI
acceptance-avoidance model (IAAAM) (Cao, Duan, Edwards, & Dwi­
vedi, 2021), this study links the threat of algorithmic systems with
negative emotions and aversion to human-machine collaboration (Xiong
et al., 2022). Concerning Explanation Theory (Miller, 2019), we pre­
sume that the perceived threat of being unable to comprehend AI rec­
ommendations positively correlates with negative emotions and
avoidance of collaboration with AI. Consequently, this research aims to
investigate the concept of Explainable AI (XAI) and evaluate how
explainability can alleviate these obstacles in the collaborative efforts of
B2B marketing managers with AI through three experimental studies.
Our work contributes to the literature by focusing on AI as a driving
force for B2B decision-making. First, it proposes a framework for un­
derstanding marketing managers’ partnership with AI for data-driven
decisions. Second, it describes resistance to collaboration with AI from
the perspective of emotions related to AI in the context of professional
decision-making in B2B customer relationship management (Saura
et al., 2021). Such resistance can significantly limit the potential of AI
for decision-making in collaboration with managers. Understanding it
can help with B2B organizations’ challenges in implementing AI-based
solutions (Chatterjee et al., 2021). Finally, this paper shows how
explainability can limit aversion to AI, even for experienced marketing
staff. It indicates that XAI-CRM could address some challenges com­
panies face developing AI in B2B marketing (Saura et al., 2021).
2. Theoretical development
This section aims to illuminate the dynamic relationship between AI-
CRM and user experiences, concerns, and the quest for greater
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transparency and understanding in AI-driven CRM systems.
2.1. Responses to AI in an organizational context
Despite the advantages of AI in marketing decision-making, execu­
tives cannot assume that managers will appreciate AI and should expect
troubles in adopting such systems (Kolbjørnsrud, Amico, & Thomas,
2017) or refrain from using them (Berger, Adam, Rühr, & Benlian,
2021). Various theoretical models indicate factors limiting willingness
to cooperate with AI. Some of the most frequently cited are the theory of
planned behavior (TPB), the technology acceptance model (TAM), the
unified theory of acceptance and use of technology (UTAUT), and its
extended version (UTAUT2). However, the main limitation of the
traditional models is their focus on functional aspects of technology that
can only partially change attitudes toward AI (Cabiddu, Moi, Patriotta,
& Allen, 2022) or collaborative decision-making (Gursoy, Chi, Lu, &
Nunkoo, 2019). Furthermore, Bagozzi, Brady, and Huang (2022) point
out that traditional models do not consider emotional factors crucial to
attitudes and shaping approach/avoidance behaviors. Moreover, these
models are seldom applied to test managers’ intentions to use technol­
ogy and do not explain an aversion to it (Liang & Xue, 2009).
Technology threat avoidance theory (TTAT) suggests that IT users
undergo cognitive threat appraisal to assess the threat they face and
coping appraisal to decide how to avoid it (Liang & Xue, 2009). A
theoretical framework linking emotional factors, attitudes, and behav­
iors is the integrated AI acceptance-avoidance model (IAAAM). IAAAM
was developed to understand better the factors affecting managers’ at­
titudes and behavioral intentions toward using AI for collaborative
decision-making (Cao et al., 2021).
Three main assumptions distinguish IAAAM from other theoretical
models that explain how people respond to AI. First and foremost, by
integrating the UTATU and TTAT models, IAAAM is concerned with how
the threat associated with the new technology influences managers’
behavioral intentions and attitudes to use it. As a human-centered
paradigm, IAAAM describes the intention to use AI (Cao et al., 2021).
However, the meaning of using AI technology is related more to sharing
information, mutual learning with it, and including it in the human
decision-making process, rather than taking AI as a tool (de Bruyn et al.,
2020; Haesevoets et al., 2021). A manager is both a beneficiary of the
system’s performance and a trainer and controller (Wang et al., 2020,
Wang, Xiong, & Olya, 2020). It is, therefore, crucial to consider the
human response to AI during collaboration, not just the response to the
tool itself. An example would be an AI-CRM system that supports
customer management decisions if the manager is willing to provide the
system with specific data and take the time to train it (Chatterjee,
Chaudhuri, & Vrontis, 2022).
Second, new and unfamiliar situations are often a source of fear and
anxiety, eliciting negative attitudes and avoidant behaviors, such as
mistrust, aggression, or misleading (Mrkva & Van Boven, 2020).
Therefore, to understand the benefits of AI in marketing, technology
needs to be considered together with the psychology of managers
(Volkmar, Fischer, & Reinecke, 2022). Since Kahneman and Tversky’s
Perspective Theory and the risk-as-feeling hypothesis (Loewenstein,
Weber, Hsee, & Welch, 2001), researchers have provided multiple
pieces of evidence that negative affective states (e.g., fear) affect people
more strongly than positive states (Gal & Rucker, 2018). From an
ontological point of view, emotions emerged as responses to problems
that needed to be solved (Al-Shawaf, Conroy-Beam, Asao, & Buss, 2016).
It emphasizes the impact of emotions on behavior and assumes the
motivational nature of emotional states. Positive states are assumed to
evoke approach behavior, while negative states (such as fear) elicit
avoidance behavior (Elliot, Eder, & Harmon-Jones, 2013). Although
emotions are no longer a key determinant of survival, we constantly
experience them, and their influence on our behavior is primarily un­
conscious (Winkielman & Berridge, 2004). An example of such a situa­
tion is the confrontation between humans and advanced technology.
P. Gaczek et al.
Negative emotions decrease the utilization of algorithms, reinforce
aversion, and strengthen misleading behaviors (Prahl & Van Swol,
2021). The phenomenon of algorithm aversion has been recognized as a
factor shaping negative attitudes toward AI (Dietvorst & Bharti, 2020),
thus threatening the intention to use it. Filiz, Judek, Lorenz, and Spi­
woks (2021) defined algorithm aversion as an odd behavior in which
people do not follow accurate AI-based recommendations but instead
make decisions on their own. However, other scholars have suggested
that algorithm aversion is intuitive and emotional rather than rational
and precede the cognitive appraisal of the AI (Jauernig, Uhl, & Walko­
witz, 2022; Zhang, Pentina, & Fan, 2021). Single studies take a different
perspective and examine the appreciation of AI. They show that humans
over-relay AI predictions and recommendations because of algorithm
enchantment (Logg, Minson, & Moore, 2019) or a preference for AI
analyses over human ones (Keding, 2021).
Third, IAAAM was developed for an organizational context and
considered for managerial use. This is important as humans rely on AI
recommendations not only for their interests but also for the benefit of
the entire organization. However, this gives rise to certain limitations,
recently defined as “dark sides” in the context of AI. At the organiza­
tional level, system users may fear bad decisions and discrimination
(Shrestha & Mahmood, 2019). At the decision-maker level, there is a
fear of losing a job (Ransbotham, Gerbert, Reeves, Kiron, & Spira, 2018),
a fear of the system undermining human decisions, and a fear of not
understanding the system (Shin, 2021).
2.2. Technological threat
Studies on new technologies in organizations include technological
threats influencing users’ behavior toward this technology (Cao et al.,
2021). In the context of AI, technological threat is defined as “The extent
to which an individual believes that using AI to make decisions is dangerous or
harmful” (Chen & Zahedi, 2016). The definition emphasizes two ele­
ments - AI is used for decision-making, and the use of AI for this purpose
can be harmful. The technological threat is considered in two models
related to organizational behaviors. TTAT model includes the threat of
technology in the context of the choice of coping strategies that humans
take to avoid the threat, focusing on threats specific to the emergence of
new technologies (Liang & Xue, 2009). Recently, the concept of tech­
nological threat has been used to explain adoption behavior toward AI
within organizations (Cao et al., 2021). The IAAAM model shows the
impact of threats on intentions to use technology by introducing it as a
factor influencing attitudes toward AI and the willingness to use it.
The conceptualization of a technological threat assumes that the user
is aware of the occurrence of the threat and the potential harm that the
threat may lead to. The harm is an anti-goal that the user avoids by
implementing coping strategies. Threat perception is influenced by its
severity and the probability of its occurrence (Cao et al., 2021). The
perceived threat is more significant when the user is convinced that his
current state is close to anti-goal. The threat is thus understood as a
motivating factor for implementing a specific behavior that reduces
potential harm to the user.
The available literature cites and tests many different technological
threats. This means that we are dealing with more than one specific
threat but rather a variety of threats that stem directly from the IT / AI
solution. For example, when Internet access became widespread, threats
included computer viruses and anti-virus software as a form of threat
mitigation or unsafe emails (Liang & Xue, 2009). Another example is the
threat to privacy from sharing sensitive data and the risk of losing it
(Bharadwaj & Shipley, 2020; Paschen, Wilson & Bettis-Outland, 2020;
Sivarajah, Irani, Gupta, & Mahroof, 2020). More recently, due to the
development of sophisticated AI models, research indicates that the
significant threat relates to not understanding recommendations from
AI.
Despite the quality of AI technology, some marketing managers have
difficulty trusting it because of algorithmic imperfection (Dietvorst,
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Simmons, & Massey, 2015), immutability (Dietvorst, Simmons, &
Massey, 2018), ambiguity of recommendations (Lebovitz, Levina, &
Lifshitz-Assaf, 2019), lack of explanations from machines (Kolbjørnsrud,
Amico, & Thomas, 2016; Volkmar et al., 2022), using biased datasets
(Ransbotham, Kiron, Gerbert, & Reeves, 2017). One of the fundamental
causes of these features of AI is the black-box problem, meaning that AI
can produce output without clarifying what drove it to this specific
result. Users having good knowledge in a field, like managers, need to
understand the output of AI to consider it in decision-making (Lu, Lee,
Kim, Danks, & Thurstone, 2019). For example, Wilson and Bettis-
Outland (2020) found that artificial neural network predictive models
are so complex that a casual B2B marketing user needs an in-depth
explanation to follow them as they compare the output of AI with
their knowledge. Also, Bohanec, Robnik-Šikonja, and Kljajić Borštnar
(2017) show that using AI-based sales predictions increases the risk of
slowing down the decision-making process due to a lack of under­
standing of how and why AI generated its results.
2.3. eXplainable artificial intelligence (XAI)
Recent studies on AI emphasized the need to develop better expla­
nations of predictions and recommendations to make them more
transparent for human users, especially in the case of black-box AI
models (Mercado et al., 2016). XAI refers to methods and techniques
that show how an AI system makes decisions and predictions and exe­
cutes its actions (Rai, 2020). That allows human users to understand and
trust the results and output generated by machine learning models
(Arrieta et al., 2020) in many fields, including marketing (de Bruyn
et al., 2020). However, these works are mainly based on an empirical
basis and are criticized for the need for sound theoretical background for
explanations of AI (Miller, 2019). These can be found in the economics
of information, which assumes that humans value information because it
allows them to make decisions of higher expected utility than they could
gain without that information (Stiglitz, 2017). Moreover, managers
collaborating with AI can be aware that, because of the analytical power
of AI, there is lower information asymmetry between two AI agents than
between them and humans (Marwala & Hurwitz, 2015). Based on that,
adding an explanation to a result of AI outcomes should be perceived as
applicable by the user because it increases the value of the outcome and
reduces information asymmetry.
From the perspective of the social sciences, explanations of AI can be
justified based on theories of social attribution (how people explain the
behavior of others), cognitive processes (how people explain causality),
and social explanations (how people communicate explanations). A
social view can enhance the concept of explanations of AI by illumi­
nating how people define, generate, present, select, and evaluate ex­
planations (Miller, 2019). In the last decade of the XX century,
researchers proposed that AI systems should interact with users to
provide better explanations (Cawsey, 1993). Regarding cognitive pro­
cesses, explanations help people make decisions and draw conclusions.
The persuasiveness of an explanation depends on its quality or type
(Lombrozo, 2006). Researchers indicate that explanations correspond
with probabilities judgments because a persuasive explanation of a
phenomenon increases the belief in its validity (Thagard, 2006). People
who collaborate with AI attribute human characteristics to it and expect
the system to exhibit certain human-like behaviors, such as providing
explanations. De Graaf & Malle (2017) suggest that if a manager obtains
an explanation, he or she processes that information from the system in
the same way as if it came from a human agent.
This article adopts the stance of Miller (2019) and De Graaf & Malle
(2017), who argue that explanations are inherently social. In their view,
an explanation measures how well an observer can comprehend the
decision or recommendation made by the system. Due to the adoption of
AI to support human decision-making in different disciplines, many new
XAI methods have been proposed to enhance model interpretability and
foster human trust in “black box systems” (Demajo, Vella, & Dingli,
P. Gaczek et al.
2020). Humans use explanations to guide learning and understanding by
building inferences and seeking propositions or judgments to enrich
their prior knowledge and fill the requested perspective (Lombrozo,
2006, 2012). Users with varying circumstances and levels of expertise
necessitate distinct explanations tailored to their specific needs and re­
quirements (Lu et al., 2019). Thus, we can categorize different forms of
explanations. Prior work on non-personalized explanations (Kouki,
Schaffer, Pujara, O’Donovan, & Getoor, 2020) showed that users prefer
basic visual formats over complex ones.
The most common categories of XAI are numeric, rule-based, textual,
visual, and mixed (Islam, Ahmed, Barua, & Begum, 2022). According to
Speith (2022), the usefulness of an explainability method for specific
stakeholders and contexts may be influenced by its category. Authors
underline that the numeric explanations, e.g., Anchors (Ribeiro, Singh,
& Guestrin, 2018), LIME (Ribeiro, Singh, & Guestrin, 2016), and SHAP
(Lundberg, Allen, & Lee, 2017), demand high expertise in the corre­
sponding domains as they are associated with the features of data.
Therefore, this category was deliberately adopted in the developed
systems, targeted to the experts to clarify a model’s decision for different
attributes regarding feature importance. On the other hand, the rule-
based explanations are much more straightforward than the numeric
ones because they facilitate understanding complex systems for general
users from domains such as entertainment and finance.
Nonetheless, more effort was needed to objectively and quantita­
tively assess their degree of explainability (Vilone & Longo, 2021). The
next category, visualization-based techniques, is the most popular
because humans can more easily interpret than other types of explana­
tions (Islam et al., 2022). This category contains charts, trend lines, and
saliency maps. Conventionally, the visual explanation is preferable for
image processing tasks.
Poli, Ouerdane, and Pierrard (2021) define textual explanations as
coherent and human-readable sentences in natural language, purpose­
fully designed for users to gain valuable insights into AI decision-making
processes. This approach facilitates comprehension for managers
without technical backgrounds (Lipton, 2018), overcoming the
complexity of numeric and graphic methods. As Lipton emphasizes,
“Humans often justify decisions verbally,” making textual explanations
a natural fit for human-centric communication, especially in the context
of B2B companies dealing with complex business scenarios (Lipton,
2018). Textual explanations allow AI systems to convey information
more approachable and human-centric, fostering trust and encouraging
the adoption of AI technologies among managers in B2B companies.
Despite being perceived as the most persuasive explanation form (Kouki
et al., 2020), textual explanations are less common than other types.
However, their crucial advantage lies in their adaptability to diverse
contexts and domains, making them versatile across various applica­
tions. In contrast, numeric, rule-based, and visual XAI methods may be
more specialized and less applicable to specific domains (Speith, 2022).
Although textual explanations entail higher computational
complexity due to natural language processing tasks, they can be
adopted in interactive systems involving general users. Their less
frequent application was historically attributed to computational de­
mands (Islam et al., 2022). Nevertheless, recent advances in AI tech­
nology, such as ChatGPT, showcase promising improvements in
generating textual explanations, making them more accessible and
feasible for practical use cases.
3. Research problem and hypothesis development
We embed our experimental studies in the stream of research on
human-machine acceptance and collaboration (Burton et al., 2020;
Haesevoets et al., 2021), where information sharing and collaborative
learning are fundamental (Schneider & Leyer, 2019) to leverage the
great potential of AI in B2B context. Nevertheless, available research
demonstrates the phenomenon of people’s aversion toward AI (Dietvorst
& Bharti, 2020), reducing their willingness to use AI and share
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information with it. Recently, it has been pointed out that the sources of
this aversion are emotional (negative emotions like fear) and relate to
the fear of not understanding AI (Jauernig et al., 2022; Zhang et al.,
2021). This, in turn, limits the adaptation and utilization of advanced
systems. The way to increase the understandability of AI is to explain
how the AI system makes decisions and predictions. The function of
explainable AI is to build transparency, trust and facilitate understand­
ing of AI to reduce the user’s negative emotions and increase willingness
to cooperate with AI –firstly includes information sharing and the AI
participation in managerial decisions.
Supported by the findings of psychologists, we argue that explana­
tions enhance learning and inference, transfer knowledge and persuade
(Lombrozo, 2006, 2012). Thus, the most prominent possibility of
reducing negative emotions toward incomprehensible AI systems is to
increase their understandability by providing explanations (Arrieta
et al., 2020). Therefore, we expect that explainability will reduce
negative emotions toward AI and decrease the managers’ resistance to
collaborating with the system. Since collaboration with AI involves
multiple interactions, in Experiment 1, we test whether explainable AI
will increase the willingness to share information with the system by
reducing the manager’s negative emotions.
H1. Negative emotions mediate the relationship between XAI (vs. AI) and
resistance to sharing managerial knowledge.
Threat appraisals encompass worries regarding possible future out­
comes, thus revealing employees’ anticipatory anxieties and fears
(Lazarus & Folkman, 1984; Sinclair, Martin, & Croll, 2002). These ap­
praisals are grounded in the transactional approach to stress, high­
lighting that human behavior depends on the interaction between an
individual and an environment (Folkman, 2008). Fears or threat ap­
praisals are subjective by nature, reflecting the individual’s perception
of what is at stake in a specific situation (Fugate, Mentzer, & Stank,
2010). This function of “assigning meaning” to threat assessments is
essential in introducing new technology to the organization - it allows an
understanding of how threat perception affects manager behavior
(Fugate, Kinicki, & Prussia, 2008).
From a psychological perspective, threat appraisals depend on
assessing the probability and severity of the future adverse event (Milne,
Lomax, & Freeston, 2019). Such operationalization of the threat is also
evident in the TTAT and IAAAM models, where user intention to use new
technology depends on how likely and severe the threat is (Cao et al.,
2021). However, these models only account for the general threat
associated with AI without indicating what those threats are related to
(e.g., “my fear of exposure to AI’s risks is high”). Our study provides
specific examples of technological threats related to not understanding
the recommendation from AI. Following the operationalization of
technological threats from TTAT and IAAAM (see Section 2.2), we
propose that the probability of a threat’s occurrence determines its
perception and intensifies negative emotions (Cao et al., 2021).
We expect a system characterized by a high threat of not under­
standing will intensify negative emotions and make it difficult to achieve
the manager’s goals. Thus, more than information about explainable AI
will be needed to overcome the threat. On the other hand, in the case of a
low threat of not understanding, such information should be enough for
the manager, as the outcomes of future behavior will not seem negative.
H2. Threat of not understanding the AI moderates the relationship between
XAI (vs. AI) and negative emotions so that:
H2a. XAI reduces negative emotions in low-threat condition
H2b. XAI does not influence negative emotions in high-threat condition
As explained in Section 2.3, different types of XAI may have different
effects on how well the explanation is understood. The point of XAI is
not just to give more information but to help people understand how AI
makes decisions. This begs the question: Are there any that work better
than others among the available explanations? Mariotti, Alonso, and
P. Gaczek et al.
Gatt (2020) point out that text-based, natural language explanations are
the future of AI solutions because they allow people with different
knowledge and experience to understand how to interact with AI.
Furthermore, such explanations are straightforward for people to un­
derstand as we communicate verbally (Burkart & Huber, 2021). Ac­
cording to Chaves and Gerosa (2021), textual explanations in human-AI
interactions can make the exchange of information seem natural. De
Gennaro, Krumhuber, and Lucas (2020) report that this increases the
trustworthiness of the explanation and enhances AI acceptance, sup­
porting the assumption that social explanations (referring to how and
why they came about) are more efficient. Given the documented positive
impact of textual XAI on the attitudes of people interacting with the
system, we expect that when the threat of not understanding AI is high
and straightforward XAI is not enough to reduce negative emotions,
textual AI will increase AI’s recommendation understandability, which
reduces negative emotions and enhances managerial knowledge
sharing.
H3a. Textual XAI (vs. AI) increases the understandability of AI’s recom­
mendation in the high-threat condition
H3b. Textual XAI (vs. AI) reduces managers’ negative emotions in the
high-threat condition
According to Haesevoets et al. (2021), human–AI partnership aug­
ments human capabilities by collaborating with machines. Managers
working with AI can utilize the algorithm’s input and enhance mana­
gerial decision-making. Nevertheless, they hesitate to accept AI’s
involvement fully. Research on manager partnerships with AI suggests
that, to some extent, managers perceive and evaluate the system as if it
were a human actor (Miller, 2019; De Graaf & Malle, 2017). This, in
turn, suggests that managers also expect the system to communicate
with them in a way that is natural to them - using social explanations in a
textual form. Textual XAI is more persuasive than others (such as
graphical or tree-based) due to its naturalness matching people’s built-in
preference for such communication. This type of explanation does not
require additional competence from users, making it accessible to them.
Following Schneider and Leyer’s (2019) suggestion that human-
system information sharing enhances learning and builds trust, we
expect that textual XAI will increase the willingness to share informa­
tion, translating into a manager’s greater willingness to include the
system’s recommendation in their decisions. This supposition corre­
sponds with the concept of the “human-in-a-loop” (Monarch, 2021),
which signals that human-system interaction is a continuous exchange
of information, and the previous interaction will enhance openness to
subsequent interactions in decision-making:
H4. Sharing managerial knowledge mediates the relationship between
Textual XAI (vs. XAI) and human-AI partnership
4. Study 1: XAI reduces negative emotions toward AI-CRM and
resistance to sharing managerial knowledge with the system
Study 1 investigates whether negative emotions evoked by interac­
tion with AI-CRM mediate the relationship between XAI (vs. AI) and
managers’ intention to share knowledge with the system (H1). In
addition, we consider the effect of explainability on negative emotions
due to the level of technological threat. Namely, we assume that XAI
reduces negative emotions when the threat of not understanding the AI’s
recommendation is low (H2a) but is not enough to limit negative emo­
tions when the threat is high (H2b). Study 1 uses the experimental
vignette method, presenting our participants with a scenario empha­
sizing business, marketing context, and adaptation of a new CRM system
based on AI.
We use mediation analysis in this and every subsequent study
(Hayes, 2017). Mediation analysis provides a sequential explanation of
how one variable affects another (Kenny, 2008). It makes it possible to
provide answers to the “why” question, which is fundamental to science.
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Industrial Marketing Management 115 (2023) 127–142
We are interested in testing specific scenarios that elicit emotional re­
sponses and subsequent behaviors and in explaining these behaviors
with emotions.
4.1. Methods
4.1.1. Participants
One-hundred seventy-four (Mage = 37.37 years, SD = 11.65, 66%
male) English-speaking B2B managers specialized in marketing partici­
pated in this study via Prolific. Following Northouse’s (2021) definition
of a manager, we investigated people who are responsible for directing
and coordinating the work of others and who have the authority to make
a decision and take action to achieve organizational goals.
Participants enrolled in the experiment in exchange for a nominal
payment. 74% of them use data related to customer behavior regularly
or from time to time, while 26% use such data occasionally. Those
managers’ average number of subordinates is 7.38 (SD = 9.37), and
their average experience in a managerial position is 6.38 (SD = 7.19)
years.
4.1.2. Procedure
The experimental vignette method was used in this and the subse­
quent experiments. This method is used to understand the cognitive
experience of AI-based decision-making (Keding, 2021). Vignettes are
designed to explore participants’ attitudes, judgments, or behaviors by
presenting a hypothetical but realistic scenario in which key variables
are intentionally modified. In the first stage of the experiment, re­
spondents were asked to imagine their company planning to implement
a new CRM system using AI to understand better business customers
(please see Appendix A for the specific cover story of the study). Next,
managers were presented with a system description and exemplary print
screens of the system’s dashboard. Finally, across two experimental
conditions, we manipulated the explainability of AI-CRM. Half of the
participants were presented with the AI, while the other half were with
the XAI.
Additionally, we manipulated the threat of not understanding AI’s
recommendations. Thus, this study employs a 2 (AI vs. XAI) x 2 (high vs.
low threat) experimental design. Each participant was randomly
assigned to one of the four experimental conditions.
4.1.3. Data acquisition
Participants’ resistance to sharing the managerial knowledge with a
modified, three-item scale by Abubakar & Arasli (2016; Cronbach’s
alpha 0.8; M = 2.34, SD = 1.25). Anticipated negative emotions were
measured on a 7-point Likert scale. Managers declared the extent to
which they felt six negative emotions related to sharing knowledge with
the System (e.g., frustration, anxiety, fear; Cronbach’s alpha 0.89; M =
3.23, SD = 1.26). We only analyzed data from participants who correctly
answered manipulation checks (see Appendix B for detailed information
on manipulation checks and pretests).
4.1.4. Stimuli
An existing AI-powered CRM system inspired the stimuli used in the
experiment. However, the study’s interface and graphics changed
slightly (see Appendix C). The subjects saw a print screen from the
system’s dashboard with modified information regarding the threat of
not understanding the AI, the main features of the system, and a good
recommendation from the AI.
We used a 2 × 2 experimental design. First, we manipulated the type
of AI (XAI vs. AI with no explanation) and level of technological threat
(low vs. high) related to not understanding the AI’s recommendation.
Then, the stimulus was pretested to make sure the threat manipulation
worked. To do this, we used a three-item scale proposed by Gürhan-
Canli & Batra, 2004 measuring performance risk (Mhigh threat = 4.32, SD
= 0.98 vs. Mlow threat = 3.65, SD = 1.2; F(1,153) = 19.13, p < .001) and a
three-item scale measuring perceived technological threat (Mhigh threat =
P. Gaczek et al.
4.72, SD = 1.45 vs. Mlow threat = 3.5, SD = 1.48; F(1,121) = 20.99, p <
.001) suggested by Cao et al. (2021).
Half of the respondents saw information that the CRM was powered
by XAI (while the rest were convinced that the system included AI,
which does not explain its recommendations). XAI and AI conditions
included a system description, while the XAI description emphasized the
system’s explainability (see Appendix C). We pretested AI vs. XAI
description and confirmed that managers were more able to interact
with XAI (MAI = 4.2, SD = 1.5 vs. MXAI = 4.69, SD = 1.24; F(1,172) =
5.31, p = .022) and more able to communicate with it (MAI = 4.15, SD =
1.42 vs. MXAI = 4.65, SD = 1.27; F(1,172) = 5.82, p = .017). Fig. 1
presents one of four conditions used in Study 1.
Fig. 1. Condition (one of four) used in Study 1.
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4.2. Results
To assess the mediating effect of managers’ anticipated emotions
from sharing managerial knowledge with the AI-CRM in the two pro­
posed Conditions (AI vs. XAI), we conducted a regression analysis with
the Condition (AI = 1; XAI = 2) as the independent variable, negative
emotions as the mediator, the resistance to share managerial knowledge
as a dependent variable and threat (high vs. low) of not understanding
the recommendation from AI as a moderator. The regression was con­
ducted via PROCESS 4.0 macro SPSS (Model 7) (Hayes, 2017). Fig. 2
presents the results of Study 1.
The analysis revealed a non-significant effect of the Condition on the
anticipated negative emotions (b = 0.65, p = .246), a non-significant
effect of high vs. low threat on the negative emotions (b = − 0.09, p =
P. Gaczek et al.
Fig. 2. Results of Study 1.
.864), and a significant interaction (b = − 0.7, p = .042). Furthermore,
conditional effects showed that the effect of the Condition on anticipated
negative emotions is significant only in the low-threat group (MAI =
3.05, SD = 1.42 vs. MXAI = 2.3, SD = 0.71, b = − 0.76, p = .001) but not
in the high-threat group (MAI = 3.84 SD = 1.01 vs. MXAI = 3.79 SD =
1.05, b = − 0.06, p = .827).
Next, the regression analysis showed a significant effect of the
anticipated negative emotions on the resistance to share managerial
knowledge (b = 0.59, p < .001) and a non-significant direct effect of the
Condition on the dependent variable. The index of moderated mediation
is significant (b = − 0.42, LCI = − 0.81, UCI = 0.05). However, condi­
tional indirect effects showed that the mediation is significant only for
low-threat (b = − 0.45, LCI = − 0.77, UCI = − 0.17) but not for the high-
threat group (b = − 0.03, LCI = − 0.32, UCI = 0.23).
4.3. Discussion
We provide evidence that the level of technological threat differen­
tiates managers’ responses to explainable AI. When the threat level is
low, simple XAI reduces negative emotions and increases the willingness
to share information. However, when the threat is high, such XAI is
insufficient to reduce negative emotions, thus not influencing manager
behavior. By that, we support Cao et al. (2021) proposition that the
perception of technological threat accounts for algorithm aversion, and
overcoming negative emotions enhances behavioral intentions toward
AI. In the environment of the high threat of not understanding AI,
managers expect a developed and transparent system capable of
providing evidence of its effectiveness (which is not the case for low
levels of threat).
Using a transparent system for managers who are most concerned
about not understanding the AI can be considered as a form of coping
strategy for dealing with threats. Although Rogers’ (1975) theory of
motivation indicates that humans take protective actions in the face of
danger, the system may already be equipped with features that enhance
understanding and reduce aversion among specific groups of managers.
The organization can choose strategies for leveling aversion based on
managers’ emotional reactions. In other words, we may suggest seg­
menting employees based on their emotional attitudes toward AI and
personalizing the system to fit the type of manager. Moreover, emotional
sources of aversion to AI may be easier to overcome than rational factors
- if the problem is fear of not understanding the system, informative
strategies explaining the general operation of the systems are possible
(at the organizational level), while interference with the system itself is
not necessarily required right away.
5. Study 2: Textual XAI increases the understandability of AI’s
recommendation and reduces resistance
As argued earlier, not understanding AI’s recommendation is seen as
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the main limitation of its implementation. Therefore, increasing AI’s
transparency by providing explanations is expected to enhance under­
standability and overcome resistance. However, from Study 1, we know
that simply providing information that AI is explainable is insufficient to
overcome aversion when the threat of not understanding is high. As
several types of explainable AI are currently available, we pretested the
four most common kinds (numerical vs. rule-based vs. visual vs. textual)
to select one perceived as the most understandable for managers (see
Appendix D for a preliminary study). The pretest revealed that textual
explanation based on natural language increases understanding of AI
recommendations.
Therefore, Study 2 tests hypotheses H3a and H3b regarding the
mediating nature of AI-CRM’s understandability and anticipated nega­
tive emotions of managers. We hypothesize that providing a textual
explanation for a recommendation in an AI-CRM system increases un­
derstanding, reduces negative emotions, and decreases resistance to
sharing managerial knowledge with the system.
5.1. Methods
5.1.1. Participants
Three hundred eighty-seven (Mage = 36.98 years, SD = 10.93, 66%
male) English-speaking B2B managers specializing in marketing
participated in this study via Prolific. Participants enrolled in the
experiment in exchange for a nominal payment. 74% of them use data
related to customer behavior regularly or from time to time, while 26%
use such data occasionally. Those managers’ average number of sub­
ordinates is 8.29 (SD = 14.31), and their average experience in a
managerial position is 7.12 (SD = 6.98) years.
5.1.2. Procedure
The design of this study is 2(AI vs. textual XAI) x 2(high vs. low
threat). Respondents were randomly assigned to one of 4 groups that
differed in their threat of not understanding recommendations from AI-
CRM and two types of AI. The AI group contained only information
about explainability but no specific indication, so this was an example
from Study 1. The textual XAI group saw a definitive, natural language
explanation from the AI. Unlike Study 1, in Study 2, participants saw
information about AI-CRM and a recommendation to select a specific
customer (see Appendix). The cover story and stimuli used for this study
are available in the Appendix.
5.1.3. Data acquisition
We used the same scales and questions as in Study 1. Participants’
resistance to sharing the managerial knowledge with a modified, three-
item scale by Abubakar and Arasli (2016; Cronbach’s alpha 0.8; M =
2.34, SD = 1.25). Anticipated negative emotions were measured on a
7-point Likert scale. Managers declared the extent to which they felt six
negative emotions related to sharing knowledge with the System (e.g.,
P. Gaczek et al.
frustration, anxiety, fear; Cronbach’s alpha 0.89; M = 3.23, SD = 1.26).
We asked respondents only about the ease of understanding the
recommendation from the AI-CRM system, namely the understandabil­
ity of the AI’s recommendation. We used a modified version of the
questionnaire proposed by Lu et al. (2019). The questionnaire contains
five items (7-point Likert scale, e.g.,” How understandable do you find
the above explanation from AI-CRM,” Cronbach’s alpha 0.61, M = 4.31
SD = 0.9).
We only analyzed data from participants correctly answering
manipulation checks (see Appendix).
5.1.4. Stimuli
A preliminary study was conducted to select a type of explainable AI
that is the most understandable for users and thus would be able to
overcome managers’ negative emotions in low and high-threat condi­
tions. We developed four types of explanations of recommendations
provided by AI-CRM that used other interfaces and modes of presenta­
tion of the same data (see Appendix, pages 13–18). Each time we
explained the features of AI recommendation and its reasons. Numeric
XAI explanations were presented by numbers in a table covering parts of
customers (Lundberg et al., 2017; Ribeiro et al., 2018). In rule-based
XAI, we displayed the data in a decision tree, an interpretable model
that reflects the adopted logic to get the result (Vilone & Longo, 2021).
In visual XAI, we used charts to visualize the data, and graphics reflect
critical elements in every chart (Islam et al., 2022). The textual expla­
nations used natural language statements to describe the data and
illustrate the AI model’s logic (Kouki et al., 2020). The last stimuli, used
in the control group, contained only the AI recommendation without
any explanations. One-way ANOVA with post hoc comparisons was used
to assess differences in the understandability of the recommendation
from the AI-CRM. We did separate analyses for high and low-threat
Conditions as potential interactions are tested in study 3. Analysis
revealed a statistically significant difference in the understandability of
AI’s recommendation between at least two groups (F(4, 240) = 3.71, p
= .006). Multiple comparisons with the Bonferroni correction showed
that there is a statistically significant difference only between the con­
trol group and textual XAI (Mcontrol group = 3.79 SD = 0.82 vs. Mtextual XAI
= 4.49 SD = 0.92, p = .002, 95% C.I. = − 1.22, − 0.18). There is no
statistically significant difference in the understandability of AI’s
recommendation between any other types of XAI (ps > 0.005). Fig. 3
presents one of four conditions used in Study 2.
5.2. Results
To assess whether understandability and managers’ negative emo­
tions influence the resistance to sharing managerial knowledge with the
AI-CRM, we run regression analysis via PROCESS 4.0 macro SPSS. Model
6 (Hayes, 2017) was used with the AI vs. textual XAI (AI = 1; XAI = 2) as
the independent variable, understandability as the first mediator,
managers’ negative emotions as the second mediator, and resistance
toward information sharing as the dependent variable. In addition, the
level of threat (high vs. low) associated with not understanding the
recommendation was included as a covariate. Fig. 4 presents the results
of Study 2.
First, we observed a significant total effect of the AI vs. textual XAI on
the dependant variable with covariate included (MAI = 2.45 SD = 1.22
vs. Mtextual XAI = 2.18 SD = 1.11, b = − 0.07, p = .032). Second, the effect
of AI vs. textual XAI on recommendation understandability is significant
(MAI = 4.15 SD = 0.9 vs. Mtextual XAI = 4.54 SD = 0.85, b = 0.11, p <
.001), the same as the effect of threat related to not understanding the
recommendation (Mhigh threat = 4.14 SD = 0.92 vs. Mlow threat = 4.53 SD =
0.83, b = 0.46, p < .001). Moreover, the regression analysis revealed a
significant effect of the AI vs. textual XAI (MAI = 3.44 SD = 1.26 vs.
Mtextual XAI = 2.9 SD = 1.34, b = − 0.06, p = .036) and a significant effect
of understandability on negative emotions (b = − 0.73, p < .001). In
contrast, the threat effect is non-significant (b = 0.02, p = .853).
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Industrial Marketing Management 115 (2023) 127–142
Third, we observed a significant effect of anticipated negative emo­
tions on resistance to information sharing (b = 0.33, p < .001), with non-
significant effects of the Condition (b = − 0.01, p = .628), recommen­
dation understandability (b = − 0.03, p = .736) and threat (b = 0.11, p =
.335). The direct effect of the Condition on the dependent variable is
non-significant (b = − 0.01, p = .628), while the indirect effect through
both mediators is significant (b = − 0.03, LCI = − 0.04, UCI = − 0.01), we
confirmed the serial mediation.
5.3. Discussion
Study 2 reveals the critical role of XAI in reducing negative emotions
associated with AI-CRM and reducing resistance to sharing knowledge
with the system. The observed serial mediation indicates that textual
explanations increase the understandability of the recommendation,
which decreases the managers’ anticipated negative emotions. Conse­
quently, managers’ resistance to sharing knowledge with the system is
reduced.
The outcome of XAI can be challenging to understand, complex, not
intuitive, not fair, and unsatisfactory for users (Lu et al., 2019). This
study confirms, in a professional context (where managers use recom­
mendations from AI for decision-making), the findings of Yeomans,
Shah, Mullainathan, and Kleinberg (2019) that AI explanations need to
be understood by users to reduce aversion to AI effectively. Even if
participants in this study were experienced and knowledgeable in B2B
customer relationships managers, they are not experts in data manage­
ment, so they need explanations that facilitate the flow of information
(Islam et al., 2022). Through this, we confirm that explaining is not
enough, as it must be understood by the user (Lu et al., 2019; Yeomans
et al., 2019).
The findings of Study 2 contribute to the literature on algorithm
aversion in two ways. First, it links explainable features of AI with al­
gorithm aversion showing its potential for reduction of negative emo­
tions to AI and resistance toward sharing knowledge with it (Önkal,
Gönül, & de Baets, 2019; Zhang et al., 2021). It also provides empirical
evidence from the organizational context, while most research on al­
gorithm aversion comes from the consumer domain (Mahmud et al.,
2022).
6. Study 3: Textual XAI increases managers’ willingness to
collaborate with AI-CRM
Study 3 tests managers’ intention to consider the AI’s recommen­
dation when selecting customers. We build on Haesevoets et al. (2021)
and Dietvorst et al. (2018) approach suggesting that the collaboration of
the manager and the AI is not about the radical decision of whether to
use the recommendation from the system or not but rather how much of
the AI’s indication will be taken into consideration. In this view, man­
agers need to choose how valuable the indication of AI is, compared to
their knowledge and coworkers’ opinions. Therefore, Study 3 was
designed to test H4 regarding human – the AI partnership.
6.1. Methods
6.1.1. Participants
One-hundred and sixty-five (Mage = 39.32 years, SD = 10.74, 74%
male) English-speaking B2B managers specialized in marketing partici­
pated in this study via Prolific. Participants enrolled in the experiment in
exchange for a nominal payment. Those managers’ average number of
subordinates is 9.78 (SD = 18.26), and their average experience in a
managerial position is 7.11 (SD = 6.66) years.
6.1.2. Procedure
Study 3 uses a modified procedure from studies 1 and 2. The first part
of the research scenario, in which respondents are asked to imagine
introducing a new AI-CRM system, has stayed the same. The second
P. Gaczek et al. Industrial Marketing Management 115 (2023) 127–142

Fig. 3. Condition (one of four) used in Study 2.

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Fig. 4. Results of Study 2.
modified part of the scenario asks respondents to plan sales activities
based on feedback from the sales team and AI recommendations. Par­
ticipants were shown the information from the team and AI, and their
task was to decide on the use of AI vs. human recommendation (e.g.,
10% of AI and 90% of humans or 90% of AI and 10% of humans).
Subjects were randomly assigned to one of two groups differing in XAI
(AI vs. textual XAI).
6.1.3. Stimuli
In Study 3, we used modified stimuli from Studies 1 and 2. The
subjects again received information about introducing a new AI-CRM
system, which differed in the type of AI (vs. textual XAI). The study
scenario was that participants had to plan sales activities based on
feedback from the team and the AI recommendation. Accordingly, we
showed subjects information from the sales team and suggestions from
the system (half of the subjects saw the recommendation of specific
actions alone, and the other half saw the same supplemented with an
explanation). The two stimuli (AI vs. textual XAI) were pretested for
understanding and confidence in the understanding of the recommen­
dation (two-item; Cronbach’s alpha 0.93; MAI = 4.32, SD = 1.45 vs.
Mtextual XAI = 5.01, SD = 1.29; F(1,81) = 5.29, p = .024), its subjective
clarity (two-item; Cronbach’s alpha 0.9; MAI = 4.26, SD = 1.37 vs.
Mtextual XAI = 5.21, SD = 1.36; F(1,81) = 9.98, p = .002) and its
comprehension (three-item; Cronbach’s alpha 0.89; MAI = 4.3, SD =
1.32 vs. Mtextual XAI = 5.06, SD = 1.28; F(1,81) = 7.08, p = .009) taken
from the comprehension and understanding scale (Kujala, Roto,
Väänänen-Vainio-Mattila, Karapanos, & Sinnelä, 2011). Fig. 5 presents
one of two conditions used in Study 3.
6.1.4. Data acquisition
We used the same scale from Study 3b to measure managers’ resis­
tance to sharing managerial knowledge (Cronbach’s alpha 0.71; M =
2.13, SD = 0.95). To control for the understandability of AI’s recom­
mendation and feedback from the sales team, and we asked two ques­
tions (e.g., “How understandable do you find the feedback from your
team?; Lu et al., 2019). Finally, we used a 1-item, 11-point scale adapted
from Haesevoets et al. (2021) to measure AI-human partnership in a
managerial decision. Specifically, participants were asked to choose
what partnership between AI and humans is acceptable for the decision
they have to make (1–0% AI and 100% human; 11–100% AI and 0%
human). Thus, the lower the score, the more AI partnership.
6.2. Results
6.2.1. Mediation of resistance to sharing the managerial knowledge with AI
vs. textual XAI
To assess the mediating effect of the resistance to share managerial
knowledge on the relationship between AI vs. textual XAI and AI–human
partnership (the lower the score, the more AI partnership selected), we
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Industrial Marketing Management 115 (2023) 127–142
conducted a regression analysis with the Condition (AI = 1; XAI = 2) as
the independent variable, resistance as a mediator and understand­
ability of sales team feedback as the moderator of its effect on AI – AI
human partnership. The regression was conducted via PROCESS macro
SPSS (Model 14) (Hayes, 2017). Fig. 6 presents the results of Study 3.
First, we observed a significant total effect of AI vs. textual XAI on the
AI–human partnership (MAI = 7.22 SD = 1.28 vs. Mtextual XAI = 6.71 SD =
1.79, b = − 0.51; p = .046) and resistance to sharing managerial
knowledge (MAI = 2.36 SD = 0.89 vs. Mtextual XAI = 1.97 SD = 0.96, b =
− 0.39; p = .009). Second, the analysis showed a non-significant direct
effect of the Condition on the AI–human partnership (b = − 0.43, p =
.094), a non-significant effect of resistance on the dependent variable (b
= 0.21, p = .13), and a non-significant effect of understandability of
sales team feedback (b = 0.08, p = .52), with mediator and moderator,
included.
Crucially, the interaction effect between the Condition and under­
standability of sales team feedback on AI–human partnership is signif­
icant (b = 0.27, p = .031). The cut-off value of the moderator was
determined through the Johnson-Neyman analysis conducted in Hayes’
Process. The cut-off for the understandability of the sales team feedback
score equals 6.01, meaning that the mediation is significant for partic­
ipants whose understandability is 6.01 or higher. Low, moderate, and
high levels of understandability of sales team feedback were determined
by -1SD, mean, and + 1SD in Hayes’ Process (Hayes, 2017). Decreased
resistance to share managerial knowledge enhances AI partnership in
the decision-making but only among managers who claimed a high
understanding of feedback from the sales team (b = 0.51, p = .01, Mlow
resistance = 6.61 vs. Mmoderat resistance = 7.1 vs. Mhigh resistance = 7.58). The
effect of resistance on AI–human partnership is non-significant for
moderate (b = 0.21, p = .133) and low (b = − 0.09, p = .64) scores on the
understandability of sales team feedback. Thus, the indirect effect of AI
vs. textual XAI on AI–human partnership through the resistance is sig­
nificant only for high scores of understandability of sales team feedback
(b = − 0.2, LCI = − 0.49, UCI = − 0.02) but for moderate (b = − 0.08, LCI
= − 0.24, UCI = 0.03) and low scores (b = 0.04, LCI = − 0.1, UCI = 0.26).
6.2.2. Alternative moderator
As we controlled for the understandability of AI’s recommendation,
we ran another regression analysis to test Study 3 with an alternative
moderator. We conducted a regression analysis with the Condition (AI
= 1; XAI = 2) as the independent variable, resistance as the mediator,
and understandability of AI’s recommendation as the moderator of its
effect on AI–human partnership. The regression was conducted via
PROCESS macro SPSS (Model 14) (Hayes, 2017). Although the inter­
action effect between the Condition and understandability of AI’s
recommendation is merely significant (b = 0.25, p = .048), the index of
moderated mediation is non-significant (b = − 0.1, LCI = − 0.25, UCI =
0.01), same as all conditional effect at three different values of the
moderator (ps > 0.05).
P. Gaczek et al. Industrial Marketing Management 115 (2023) 127–142

Fig. 5. Condition (one of two) used in Study 3.

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Fig. 6. Results of study 3.

6.3. Discussion recommendations built on the analytical power of algorithms (Haese­

voets et al., 2021). Based on three experimental studies on almost 1000
Study 3 can be discussed twofold. First, it replicates the finding that B2B marketing managers, this study verifies hypotheses about a part­
providing a textual explanation for the recommendation from AI reduces nership with AI-CRM (Table 1).
managers’ resistance to their knowledge of the AI-CRM. Second, it al­ Our results showed that negative emotions related to AI-CRM could
lows adding a new perspective on human-AI collaboration by reporting influence the resistance to assigning information about B2B customers to
that explainable AI increases AI (vs. human) partnerships in decision- the system. Nevertheless, it is possible to mitigate this resistance by
making. Namely, managers seeing AI recommendations with textual employing an appropriate design for the AI-CRM, enhancing its
explanations are more willing to increase AI’s participation in decision-
making, thereby reducing another teammate’s participation. Increased Table 1
XAI involvement is explained by reduced resistance to sharing knowl­ Verification of hypothesis.
edge with the system, but only if managers understand the feedback
Studies Hypotheses Results Findings
received from their team.
We confirmed the
On a practical level, our study shows that individual interactions
mediating effect of
with AI make it possible to build general acceptance toward collabora­ managers’ negative
tion with such systems. This may indicate that the way to overcome H1: Negative emotions
emotions on the
mediate the relationship
aversion and negative emotions is to get the manager to use the system between XAI (vs. AI) and
Partially relationship between XAI
in decision-making. However, as the human-in-the-loop concept (Mon­ validated (vs. AI) and resistance
resistance to sharing
toward sharing managerial
arch, 2021) suggests, interactions in such collaborations happen managerial knowledge
knowledge with the AI-
constantly, and a human has to feel it adds value to their work, not that it CRM only in low-threat
is a threat to it. condition.
Study H2: Threat of not We confirmed the
1 understanding the AI moderating role of threat
7. Conclusions
moderates the relationship Validated levels (low vs. high) on the
between XAI (vs. AI) and relationship between XAI
Research findings suggest that implementing AI-CRM in businesses negative emotions so that: (vs. AI) and negative
will significantly impact the establishment and growth of relationships H2a: XAI reduces negative emotions. In the low-threat
with their commercial customers. This impact will be achieved through emotions in low-threat Validated condition, AI can provide
condition explanations that reduce
the utilization of big data and the capability of AI to interact with cus­
H2b: XAI does not negative emotions.
tomers and comprehend the context of their communication, as stated influence negative However, in the high-threat
Validated
by Libai et al. (2020). Consequently, it is crucial to comprehend how emotions in high-threat condition, the effect of XAI
managers can effectively collaborate with AI in customer relationship condition (vs. AI) was non-significant.
H3a: Textual XAI (vs. AI)
management using AI-CRMs and how the system’s design can facilitate
increases the
this collaboration. This study assessed the impact of negative emotions understandability of AI’s Validated
We confirmed that textual
on AI on collaboration in customer relationship management by XAI increases the
recommendation in the
Study understandability of the
employing technology threat avoidance and AI acceptance-avoidance as 2
high-threat condition
recommendation and that
a theoretical lens. Furthermore, it has combined the threats of algo­ H3b: Textual XAI (vs. AI)
XAI reduces managers’
reduces managers’
rithms and negative emotions to AI to integrate how different factors Validated negative emotions.
negative emotions in the
could impact cooperation with AI-CRM in a B2B context and how the high-threat condition
explainability feature of AI could facilitate such implementation. We confirmed the
Empirical attention has yet to be paid to how a partnership between mediating role of resistance
managers and AI could be organized so humans could overcome their on the relationship between
H4: Sharing managerial textual XAI vs. XAI and
aversion to accepting machine involvement in managerial decisions. knowledge mediates the managers’ willingness to
According to Puranam (2021), managers can effectively collaborate Study Partially
relationship between collaborate with AI-CRM,
3 validated
with AI if they are open to sharing their tacit knowledge and experience. Textual XAI (vs. XAI) and but only when managers
Otherwise, aversion to knowledge sharing becomes a significant limi­ human-AI partnership understand feedback from
the human sales team
tation of collaboration. Furthermore, managers need to accept AI as an
provided along with AI
element of the decision-making team to pay attention to the recommendations.

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understandability and ameliorating any aversion to AI. This allows a
better general understanding of B2B marketing managers’ attitudes to AI
(de Jong et al., 2021) and precisely attitudes toward AI-CRM (Saura
et al., 2021).
7.1. Theoretical contribution
By examining the interplay of AI and humans in marketing decision-
making, this paper contributes in three ways to the emerging discussion
on AI’s role in marketing management. First, it contributes to opening
up the black box of AI-augmented decision-making by enhancing the
framework initially proposed by the TTAT theory (Liang & Xue, 2009)
and IAAAM model (Cao et al., 2021). Our study comprehends the af­
fective mechanisms that shape the managerial perception of AI-based
advice as an input for the human decision-maker in customer relation­
ships management and presents the functional role of AI in collaborative
decision-making processes. Considering options for dealing with the
threat of black-box AI, this study shows that to be a driving force of data-
driven decision-making, AI should include social explanations of its
rational predictions and recommendations that are understood by pro­
fessional users. Yet, simply providing an explanation may not be enough
to overcome AI aversion. When the threat level of not understanding AI
is high, the explanation must be understandable – only then can it
reduce the aversion.
Second, we contribute to the literature on human-AI collaboration in
an organizational context by linking its two aspects: sharing knowledge
and decision-making. Literature on systems supporting decisions views
users as receivers of information (Schneider & Leyer, 2019). This study
takes a broader understanding of information sharing and shows that
mutual learning between managers and AI can play an essential role in
their collaboration. We add to the discussion on uncertainty,
complexity, and equivocality in human and AI collaboration by showing
that the complementarity of information can support their symbiosis
(Jarrahi, 2018). We also extend the concept of AI-CRM partnership
(Haesevoets et al., 2021) by highlighting that managers accept a more
decisive role for AI if they understand AI recommendations and know
that those recommendations include their knowledge about their cus­
tomers. In light of the human-in-loop concept (Monarch, 2021), we
point out that individual interactions between humans and AI (such as
knowledge sharing and information exchange) will increase the system’s
participation in decision-making.
Third, we add a psychological component to human–AI collaboration
and provide new explanations to the literature on algorithm aversion.
This study empirically confirms that the threat of not understanding
recommendations from AI is linked to affective responses and leads to
algorithm aversion in the decision-making of knowledgeable users. It
confirms Bagozzi et al.’ (2022) suggestion about the role of emotions on
behavior in an organizational context. Negative emotions reinforce al­
gorithm aversion (Prahl & Van Swol, 2021). However, considering the
mediating role of emotions on algorithm aversion, it might also be
interpreted as an argument supporting the emotional rather than
rational character of aversion to AI (Jauernig et al., 2022; Zhang et al.,
2021). This way, regarding the paradigm of AI analytical power and its
influence on company progress (Hossain et al., 2022), we show that
individual factors can negatively influence AI adoption in companies.
However, we also demonstrate that explainable recommendations can
assist in resolving this problem, challenging the premise of general al­
gorithm aversion in a management environment (Keding, 2021).
Finally, that study provides empirical evidence for discussing
human-AI collaboration in an organizational context, specifically B2B
marketing. That can give a better insight into the understanding of AI in
decision-making. Researchers in that field are criticized for limited
empirical evidence of the use of data in B2B marketing (Hossain et al.,
2022) and for collecting data from participants that need real-world
management practice (Liu, Du, & Xu, 2019; Mahmud et al., 2022). In
turn; this research is based on data from experienced marketing
139
Industrial Marketing Management 115 (2023) 127–142
managers.
7.2. Managerial implications
According to Grand View Research (Chaudhary, 2022) global CRM
market size was valued at over 52 billion in 2021 and is expected to
expand at an annual growth rate of 13.3%. The binding force for that
growth is adding AI technology to CRMs. In that context, our research
can have implications for designing and implementing AI-CRM systems
in B2B companies.
Our study also shows that despite the supportive potential of AI for
human managerial work (Mühlhoff, 2020; Xiao & Kumar, 2021) or
functional aspects of AI-CRM (Libai et al., 2020; Ramaswamy & Ozcan,
2018; Saura et al., 2021) marketing executives cannot assume that
managers will share their appreciation for AI and should consider
managers’ fear of using that system. The objective advantages of AI do
not automatically impose using it in decision-making in customer rela­
tionship management. Human aversion to algorithms, resistance to
sharing knowledge with AI, and negative emotions toward AI can
significantly limit AI-CRM use. Our study also shows how managers can
use AI-CRM suggestions when it plays a role of a teammate. For example,
if managers can use some hints from their colleagues and AI, they prefer
mixing them. However, if a manager does not understand her or his
colleagues’ suggestions, they will not cooperate with AI-CRM. That
shows that the human team’s cooperation is needed to include AI rec­
ommendations in decision-making.
Implementation of AI to customer relationship management can face
different reactions of managers due to diverse understanding of its
recommendations and negative emotions it can evoke. Instead of
counting on managers coping with the threat of not understanding AI,
organization can work on adding textual explainability to AI predictions
and recommendations can positively impact managers’ willingness to
collaborate with the system. It will help them to understand the results
of AI work and trust it, which could encourage them to share knowledge
and experience about business customers with the system. This could
also enhance the perception of AI as a source of recommendations that
should be considered in decision-making. However, we should
remember that generating such recommendations requires high
computational power. Several XAI models are considered to make pre­
dictions and recommendations more transparent for managers (Arrieta
et al., 2020). We demonstrated the abilities of transparent AI to reduce
resistance to sharing knowledge with AI-CRM and encourage managers
to comply with AI recommendations in decision-making.
Furthermore, by showing the advantage of textual XAI over a black-
box recommendation, we support Kouki and colleagues’ findings about
the persuasive power of that type of XAI and extend it by linking the
influence of textual XAI with better understandability of AI recom­
mendations (Yeomans et al., 2019). Regarding this study, companies
implementing AI-CRM should consider that AI’s explainability feature is
insufficient if users do not understand the explanation. Regarding the­
ories of explanations, the appropriate type of explainability should
provide explanatory information that helps B2B managers understand
how AI-CRM made its recommendations.
7.3. Limitations and further research
This study’s main limitation is related to experimental research.
Using a crowd-worker sample, we attempted to select B2B managers and
verify their experience and commitment to business customer relation­
ship management to omit a lack of real-world experience in decision-
making (Liu et al., 2019). However, our results can be biased by the
sample being more tech-savvy (Berger et al., 2021) and more comfort­
able with technology (Bogert, Schecter, & Watson, 2021) than average.
The study is also limited by the methodology of vignette-based experi­
ments (Atzmüller & Steiner, 2010). By designing the vignettes, we used
the template of Salesforce.com CRM. However, the situation and the
P. Gaczek et al.
outlook for AI-CRM might vary from what we tested in the real world.
Therefore, further research could apply different research methods to
verify these results. Our research tested textual XAI, but several authors
used the SHAP framework to generate explanations containing joint
numbers, texts, and visualizations (Ponn, Kröger, & Diermeyer, 2020; Y.
Wang, Churchill, et al., 2020, Wang, Xiong, & Olya, 2020). Further
research could test mix-mode XAI among professional decision-makers.
In the presented research, we tested everyday decisions about busi­
ness customers (selecting customers and relationship-building activ­
ities). This set of decisions is limited so that further research could
manipulate some features of the decision and customers affected by this
decision regarding huge differences between business actors (Cantù,
Corsaro, & Snehota, 2012). As our work refers to the dark sides of
human-AI collaboration, we examined the role of negative emotions in
AI. Further research could focus on the role of positive emotions in using
AI in organizations (Bagozzi et al., 2022). Such emotions, e.g., excite­
ment with AI, could help to accept this technology or limit resistance.
Besides the valence of emotions, the research could adopt a more dy­
namic approach to affective factors to understand at which stage of
human-AI collaboration positive or negative emotions occur.
Data availability
Data will be made available on request.
Acknowledgement
The project financed within the Regional Initiative for Excellence
programme of the Minister of Education and Science of Poland, years
2019-2023, grant no. 004/RID/2018/19, financing 3,000,000 PLN.
Appendix A. Supplementary data
Supplementary data to this article can be found online at https://doi.
org/10.1016/j.indmarman.2023.09.007.
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 Journal of Retailing and Consumer Services 75 (2023) 103532

Contents lists available at ScienceDirect

Journal of Retailing and Consumer Services

journal homepage: www.elsevier.com/locate/jretconser

Brand competitiveness antecedents: The interaction effects of marketing

and R&D expenditure
Amir Abedini Koshksaray a, Sara Quach a, Giang Trinh b, Somayeh Bahoush Keivani c,
Park Thaichon d, *
a
Department of Marketing, Griffith Business School, Griffith University, Gold Coast, Australia
b
Ehrenberg-Bass Institute, UniSA Business, University of South Australia, Australia
c
Department of Economic Science, Payame Noor University, Karaj, Iran
d
Faculty of Business Education, Law and Arts, University of Southern Queensland, Springfield, Queensland, 4300, Australia

A R T I C L E I N F O A B S T R A C T

Keywords: This study aims to investigate the interaction effects of marketing and R&D expenditure on brand competi­
Brand competitiveness tiveness based on performance indicators. While many studies have investigated the individual effects of mar­
Marketing expenditure keting expenditure and R&D expenditure on a company’s brand value, competitive advantage, and performance,
R&D expenditure
there has been limited research on the interaction effect of these two indicators on brand competitiveness.
Performance
Market share
Longitudinal data were collected from 145 companies over seven years, including 1015 observations. The
Interaction effect companies were selected using the systematic removal method from 485 companies on the Tehran stock ex­
change market. We used a generalised method of moments (GMM) to analyse the data. Findings demonstrate that
marketing, when considered independently, had a significant effect on brand competitiveness (as reflected in
market share) in the long run, while R&D demonstrated a marginally significant effect. In addition, this study
revealed that the interaction effect between marketing expenditure and R&D expenditure on brand competi­
tiveness was marginally significant. These results demonstrate that companies need to invest in marketing ac­
tivities to leverage the benefits of R&D in order to improve their brand competitiveness. As most companies often
face budget constraints, maintaining investments in marketing and R&D is recommended to ensure sustained
competitiveness in the long term.

1. Introduction competitor’s power, it leads to a superior understanding of a brand’s

Recent challenges in the competitive markets have made brands
think about their competitiveness sensitively. Market uncertainties
make companies more sensitive about spending their financial and non-
financial resources. Therefore, the resources that brands attempt to
spend need to be justified by their performance, such as increasing in­
come or value of the brand (Olbrich et al., 2017). Brands’ foresight in­
vestments in various divisions of their organization lead to enhance their
brand value, performance, and competitiveness in the short and long
term (Peterson and Jeong, 2010).
Competitiveness is rooted in Porter’s competitive advantage
composition (Porter and Strategy, 1980; Winzar et al., 2018). Brand
competitiveness refers to the presence of competitive advantage for a
brand. When we define the power of a brand deliberated by a
competitiveness, in which market share would be an appropriate
quantitative measure (Baumann et al., 2017). How a brand can capture
the market superior to competitors displays the core meaning of brand
competitiveness (Gupta et al., 2020; Tong and Wang, 2011; Winzar
et al., 2018).
According to Winzar et al. (2018), which provided insights into the
links between brand equity-brand value-brand competitiveness from the
consumer perspective, the literature hardly measured brand competi­
tiveness by considering competitors’ performance outside of market
share (Selase Asamoah, 2014). Hence, this study defines and measures
the concept of “brand competitiveness” as a company’s previous per­
formance. Competitiveness considers incorporating competitors’ per­
formance, and some scholars argue that intra-organization performance
would not be able to represent brand competitiveness. However, when

* Corresponding author.
E-mail addresses: Amir.abedinikoshksaray@griffithuni.edu.au (A.A. Koshksaray), S.quach@griffith.edu.au (S. Quach), giang.trinh@unisa.edu.au (G. Trinh),
Keivani.agrin@gmail.com (S.B. Keivani), park.thaichon@gmail.com (P. Thaichon).

https://doi.org/10.1016/j.jretconser.2023.103532
Received 1 August 2023; Accepted 13 August 2023
Available online 19 August 2023
0969-6989/© 2023 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-
nc/4.0/).
A.A. Koshksaray et al.
we consider market share as an indicator of performance, it would be
able to represent brand competitiveness and be the best output in the
financial reports of companies in terms of accessibility and testability. In
this way, companies’ real data can be applied to assess brand competi­
tiveness. Thus, we considered market share as a performance dimension
of brand competitiveness.
Several perspectives in the literature define brand competitiveness as
a brand image dimension established by companies’ innovation (Jie,
2002; Liu et al., 2007; Winzar et al., 2018). Studies investigated and or
discussed the exact antecedents or determinants influencing brand
competitiveness are scarce. Baumann et al. (2016) found a relationship
between motivation-based factors and individual competitive perfor­
mance. Gupta et al. (2020) investigated the influence of brand value on
brand competitiveness in the B2B context. They found it insignificant in
direct effect and significant indirectly by mediating the role of market­
ing orientation. Winzar et al. (2018) considered brand equity and brand
value as determinants of brand competitiveness. Therefore, this review
highlights another significant literature gap in understanding the ante­
cedents of brand competitiveness, and this study considers marketing
and R&D expenditure and their interaction as determinants of brand
competitiveness. This interaction idea comes from Peter Drucker’s
valuable opinion that only marketing and innovation activities of the
companies (in contemporary times) shall result in growth, development,
and income generation, and all other activities add on costs (Webster Jr,
2009). Thus, the research question is: What is the interaction effect of
marketing and R&D expenditure on brand competitiveness?
Successful companies allocate their limited resources mostly to two
main processes: 1) creating value through creativity, and productivity,
and introducing new products to the market, which is related to R&D
activities; and 2) possessing value (taking into consideration the market
profit), which is related to marketing activities such as advertising
(Mizik and Jacobson, 2003). Marketing expenditure is among the factors
that potentially contribute to increased performance (Cheng et al.,
2018) and brand value (Peterson and Jeong, 2010), and it has been
mainly used in recent decades. Marketing and R&D are both tangible
assets, where marketing is a market-based asset, and R&D is a significant
asset for intellectual property (Peterson and Jeong, 2010).
Aiming to provide a comprehensive and general understanding of
these two assets, this study uses an empirical longitudinal analysis of the
interaction effects of marketing expenditure and R&D expenditure on
market share as a performative indicator of brand competitiveness to
find out how important these activities have been in enhancing brand
competitiveness in the past years. Therefore, this study contributes to
the current body of knowledge in the following ways. First, the study
advocates the definition of brand competitiveness from the performance
perspective and provides empirical evidence for market share as its
performative indicator (Rao and Holt, 2005). Second, the study explores
the direct effects of marketing and R&D expenditures on market share
using a set of longitudinal data, thereby shedding light on the long-term
performance of brand competitiveness (Peterson and Jeong, 2010).
Third, we examine the interaction effect of marketing and R&D expen­
ditures on market share and contribute to the resources-based theory
(Barney et al., 2021; Ramaswami et al., 2009; Sharma and Erramilli,
2004) by demonstrating the complementary impact of resources on
outstanding performance of brand competitiveness.
Based on a literature review of the effects of marketing and R&D
expenditures on performance and reviewing brand competitiveness
literature, this study found a lack of research in investigating the impacts
of various antecedents on brand competitiveness, such as marketing and
R&D expenditures, especially measured by actual company data in a
longitudinal research strategy. On the other hand, the financial perfor­
mance evaluation criteria are generally divided into accounting-based
and market-based groups. In this study, market share (a market-based
component) is used as a performance evaluation criteria for brand
competitiveness. This paper contributes to the special issue on brand
competitiveness by answering a call for action made by the journal. The
2
Journal of Retailing and Consumer Services 75 (2023) 103532
remainder of the paper describes the theoretical lens, hypothesis
development, methodology and measures, data analysis method, result,
and conclusion.
2. Literature review
2.1. Brand competitiveness
Competitiveness is a core concept and a mechanism to gain economic
growth and sustainable development. It helps companies preserve and
improve their market share and profit (Sölvell, 2015). Competitive
markets and economies are required to develop competitive brands, and
the degree of competitiveness is the challenge point of companies
(Assarzadegan and Hejazi, 2021; Fornari et al., 2016). The challenge
that marketing managers struggle with is their incapability to employ
marketing concepts to improve brand performance (Meyer et al., 2022),
brand equity, and competitiveness power when they cannot understand
and measure the concepts properly. This comes from the fact that they
do not have an appropriate perception of the brand as one of the most
important intangible assets of the company (Wong and Teoh, 2015).
Baumann and Hamin (2011) investigated the relationships between
culture, competitiveness, and economic and academic performance at
the individual level of the education industry. Likewise, Baumann and
Krskova (2016) and Baumann and Winzar (2016) concentrated on
competitiveness and performance. Baumann et al. (2021) argued a
combination of competitiveness and productivity, which leads to
competitive productivity, is defined as an attitude and behaviour that
leads to exceeding the competitors by a pragmatic approach. Employees’
perspectives also can be considered as an antecedent in improving in­
ternal brand management consequences (Meyer et al., 2022; Piehler
et al., 2019) and competitiveness.
Winzar et al. (2018) illustrated that generating brand equity
(perceived brand awareness and brand value) improves a brand’s
competitiveness. Companies are preserving their competitive position
by competitiveness (Baumann et al., 2016). Therefore, brand competi­
tiveness is an essential principle in companies’ competitive strategy
(Swoboda et al., 2013), and competitiveness analysis is a marketing
strategy to differentiate a company’s brand (Cui et al., 2014). Under­
standing a brand’s previous performance can help determine a brand’s
competitiveness in the marketplace, as long-term performance can
indicate how competitive the brand is. Therefore, defining brand
competitiveness by using performance indicators offers a novel and
non-inevitable perspective on this concept.
Market share is a commonly used metric to assess the competitive
position of a company’s products or services within a particular market
(Lassar et al., 1995). It is often used as a proxy for brand competitiveness
because it reflects the extent to which a company’s offerings are
preferred by consumers over those of its competitors. In other words, a
higher market share indicates that a company’s brand is more compet­
itive compared to its rivals. Consumers are more likely to choose the
company’s products over its competitors, which can be due to a variety
of factors, such as the brand’s perceived quality, price, reputation, or
marketing efforts (Keller, 1993).
Following Rao and Holt (2005), brand competitiveness can be
measured by a firm’s ability to perform well in the market. Therefore,
long-term performance which reflects in a firm’s market share can
indicate how competitive the brand is. The performance perspective of
brand competitiveness is under-researched. This study extends the cur­
rent body of knowledge by shedding light on the synergistic effect of
marketing expenditure and R&D expenditure on market share, which is
a performance indicator of brand competitiveness.
2.2. Resource-based theory
This study is plotted based on the resource-based theory (RBT) as a
theoretical lens (Barney et al., 2021). The RBT indicates that resources
A.A. Koshksaray et al.
that are valuable, hard to find, imperceptible, and irreplaceable can
bring competitive advantages to a company and have a significant effect
on its performance of the companies (Barney et al., 2021; Sharma and
Erramilli, 2004). Based on this theory, companies with valuable re­
sources are more likely to deliver more robust performance, and these
resources have a remarkable effect on their success (Ramaswami et al.,
2009). Recently, Barney et al. (2021) explained the resource-based
approach which leads to value creation. Marketing and R&D play
pivotal roles as crucial resources forming the foundation for value cre­
ation, ultimately leading to improved performance and competitiveness.
The substantial investments that companies allocate to these two re­
sources can be viewed as highly significant, firmly grounded in the
principles of resource-based theory.
According to the marketing strategy literature, companies can use
two essential processes to enhance their performance and brand
competitiveness, i.e. creating unique value and allocating value (Mizik
and Jacobson, 2003; p 63). Creating value involves providing added
value to the customers through company activities such as innovation
and production. On the other hand, allocating value is related to the
companies’ ability to create competitive advantages (Sahi et al., 2022),
and the profit made by the companies depends on this ability (Mizik and
Jacobson, 2003; Peterson and Jeong, 2010). Therefore, marketing ac­
tivities are effective mechanisms that can contribute to creating
competitive advantages and allocating value (Sahi et al., 2022; Shiu,
2021).
On the other side, R&D can be generally referred to as a principal,
and well-organized activity aims to acquire new knowledge for devel­
oping new products and services and enhancing products and produc­
tion processes (Alam et al., 2019) to create unique value. The effect of
commercial research and development on efficiency has been investi­
gated in many empirical studies, and its effect on all aspects (including
retail units, businesses, and industries) has been proven in many coun­
tries (especially the USA) (Alam et al., 2019; Guellec & Van Pottels­
berghe de la Potterie, 2004). Hence, through strategic utilization of
marketing activities and investments in well-organized R&D efforts –
effectively combining these essential resources – companies can bolster
their competitive position, elevate overall performance, and establish a
strong brand competitiveness in the market.
2.3. Marketing and R&D investments
Marketing and R&D activities offer distinct advantages that are vital
for long-term growth. Therefore, the expenditures directed towards
marketing and R&D are considered strategic investments that can in­
crease brand competitiveness. Resources are defined as the combination
of tangible and intangible assets that firms utilize to conceive and
execute their strategies (Barney and Arikan, 2005). The majority of
studies tend to focus on the advantages that resources can offer, often
neglecting to consider the costs involved in building and sustaining
those resources (Kozlenkova et al., 2014). Hence, the expenses incurred
in building and maintaining resources, as reflected in financial state­
ments, can be regarded as investments, given that a company’s
competitive advantages are rooted in these resources.
According to Srivastava et al. (1998), market-based assets are
conceptualized as resources that emerge from a firm’s interactions with
external entities. They further differentiate between two types of
market-based assets: relational (e.g., brand equity) and intellectual (e.g.,
market conditions) (Varadarajan, 2020). Market-based resources
encompass a specific subset of firm resources, comprising assets and
capabilities that are directly tied to marketing activities. These resources
pertain to endeavours like brand building, relationship management,
innovations, and knowledge development. Recent research emphasizes
the significance of intangible, complementary resources, intangible,
complementary resources, which are believed to exert a more substan­
tial impct on a firm’s sustained competitive advantage and overall
performance compared to tangible resources (Kozlenkova et al., 2014;
3
Journal of Retailing and Consumer Services 75 (2023) 103532
Srivastava et al., 1998).
Given that the majority of research evaluates and confirms the direct
impact of resources on firm performance, often assessed by indicators
like profitability (Vorhies and Morgan, 2005), market share (Hooley
et al., 2001), and return on investments (Menguc and Auh, 2006), the
notion of considering critical resources such as marketing as investments
for companies becomes a subject of debate. However, RBT provides
marketing researchers with the opportunity to theorize about the
long-term consequences of marketing investments. This is because such
spending often results in the development of valuable resources and
capabilities, such as fostering stronger customer relationships and
adopting a market-oriented approach. These aspects can significantly
contribute to increasing brand competiveness and improving future firm
performance (Hult and Ketchen Jr, 2001; Kozlenkova et al., 2014;
Varadarajan, 2020).
According to the Financial Accounting Standards Board, expendi­
tures on research activities aimed at developing new products,
enhancing exisiting ones, and reducing operational costs in the future,
are expected to produce earnings not only in the current period but also
in future periods. Since the knowledge acquired through research is
expected to generate earnings over a time, R&D expenditure can be
regarded as a company asset or the increased value of its total current
assets. Therefore, abiding by the compliance principle, R&D expenditure
is recognised a strategic asset that has the potential to improve perfor­
mance (Meyer et al., 2022), enhance competitive advantage (Tsao,
2014), and elevate brand competitiveness. Based on the foregoing dis­
cussion, both marketing and R&D are employed in this study as essential
resources within the framework of resource-based theory, generating
unique value.
In this regard, the table in the web appendix summarises a
comprehensive review of the literature regarding the effect of marketing
and R&D on performance. Most studies have only examined the effect of
either marketing expenditure or R&D expenditure on financial ratios or
firms’ performance. This study goes a step further by investigating both
the individual effects of marketing expenditure and R&D expenditure as
well as their interaction effect on brand competitiveness. In fact, given
that both marketing expenditure and R&D expenditure can be consid­
ered as capital investments, with their benefits extending beyond the
current periods, and both playing similar roles in international ac­
counting standards, it is expected that their interaction reinforces each
other’s effects.
2.4. Marketing and brand competitiveness
Marketing serves as a vital resource that introduces and promotes a
brand, elevating the perceived value of the company’s products
compared to similar offerings in the market (Cheng et al., 2018). It is
used as an efficient tool to deter potential competitors from entering the
market and strengthen brand positioning, thereby enhancing and
consolidating the revenue and sales margin of commercial units (Har­
yanto and Retnaningrum, 2020). Accordingly, the companies invest in
advertisement and marketing expenditures not only to increase sales
through promoting brand awareness but also to increase the company’s
overall value by promoting desirable brand attitudes (McAlister et al.,
2016), which leads to improved brand competitiveness.
Previous literature has consistently demonstrated the direct influ­
ence of marketing on sales and profitability of companies (Aaker, 1996;
Erickson and Jacobson, 1992; Lane Keller, 1998). Recently, Peterson
and Jeong (2010) uncover a positive impact of marketing activities on
brand value and firm-level financial performance. Kumar et al. (2020)
find a direct relationship between brand and firm value, highlighting the
significance of intangible value creation. Additionally, Cheng et al.
(2018) reveal that marketing expenditure has a significant positive ef­
fect on the performance based on the market value of the shares-to-book
ratio. Haryanto and Retnaningrum (2020) found that marketing
expenditure can affect ROI and ROE. Therefore, the first hypothesis is:
A.A. Koshksaray et al. Journal of Retailing and Consumer Services 75 (2023) 103532

H1. Marketing expenditure has a significant positive effect on the brand competitiveness in the long-run.
performance dimension of brand competitiveness in the long-run.
3. Method
2.5. Innovation and brand competitiveness
The study employed a longitudinal research strategy by analysing
R&D is an essential resource that enable firms to achieve and sustain real data of 145 companies over seven years, dating from 2011 to 2017,
a competitive edge in the marketplace via its enduring effects on a including 1015 observations that provided panel data for analysis. The
company’s brand, product development, and market positioning. By companies were selected using the systematic removal method, and data
allocating a significant portion of the R&D budget and introducing new were analysed by the generalised method of moments (GMM) approach
products ahead of competitors, the company gains the exclusive right to (Alam et al., 2019; Chen et al., 2016). This section discusses the math­
produce and market the innovative product for several years. This ematical research model and data collection and analysis strategy.
advantage not only attracts consumers to use and recommend the new
product but also enhances the overall performance and competitiveness
of the brand (Ravšelj and Aristovnik, 2020; Tsai and Wang, 2004). In 3.1. Research model and measurements
companies that invest in R&D expenditures, both internal and external
users of financial statements carefully scrutinize the outcomes of these The following preliminary model is used in the present study to test
investments. The significance of this information is underscored by its the hypotheses:
impact on the company’s overall value. Empirical evidence has consis­
BCit = c + α1 MEit− 1 + α2 R&DEit− 1 + α3 MEit− 1 ∗ R&DEit− 1 + α4 Zit + εit
tently demonstrated that R&D expenditures have a considerable effect
(1)
on a company’s performance (Rafiq et al., 2016; Sharma et al., 2016).
Rafiq et al. (2016) found that a firm engaging in R&D activities earns In this equation, BC stands for the brand competitiveness of the
4%–11% higher sales and generates 4%–13% more profits than firms companies, ME stands for marketing expenditure of the companies,
that do not engage in R&D activities. The study of Sharma et al. (2016) R&DE stands for R&D expenditure of the companies, Z is a vector of
shows that multinational firms can use R&D expenditure to improve control variables, i stands for sections (companies), and t stands for the
their product innovation and market share. Ravšelj and Aristovnik subject year. Because market share of the companies is the criteria for
(2020) observed that in the short-term period, the R&D expenditure may measuring the performance dimension of brand competitiveness, the
not show immediate returns, but in the long-term, they bring significant above model is rewritten as follows:
benefits. This is supported by other research, such as Luo et al. (2018),
MSit = c + α1 MEit− 1 + α2 R&DEit− 1 + α3 MEit− 1 ∗ R&DEit− 1 + α4 Zit + εit
Ruiqi et al. (2017), and Freihat and Kanakriyah (2017). These collective
(2)
results shed light on the effect of R&D expenditure on brand competi­
tiveness, offering valuable insights into its long-term impact. Therefore: In this equations, MS stands for the market share of the companies.
The control variables are leverage, the size of the company, and the age
H2. R&D expenditure has a significant positive effect on the perfor­
of the company. Variables and methods of measuring them are shown in
mance dimension of brand competitiveness in the long-run.
Table 1.
Brand competitiveness as a dependent variable is measured by
2.6. The interaction between marketing and innovation
market share (share of the company from the total market) (Cheng et al.,
2018; Rego et al., 2013). Market share is the portion of the total sales,
Marketing and R&D can be viewed as a synergistic bundle of re­
revenue, or other relevant measure that a company holds in a particular
sources that play complementary roles in achieving a competitive
market. It is a key indicator of a company’s relative position in the
advantage (Chen et al., 2016; Tanabe et al., 2004). From a practical and
market and can be used to compare its performance with that of its
analytical point of view, spending on each can yield maximum benefit
competitors. The higher a company’s market share, the more dominant
when the other is less prominent (Caglar and Nisel, 2017). Historical
it is in the market. Measuring market share is an essential tool for
performance records of companies demonstrate that extensive in­
assessing a company’s competitive position and developing effective
novations and research are not successful without the support of mar­
marketing strategies to gain a larger market share.
keting activities, and likewise, comprehensive marketing endeavors are
Independent variables are marketing expenditure (marketing
fruitful only when accompanied by essential R&D activities (Cheng
expenditure to total sales ratio) (Cheng et al., 2018; Jacobson, 1990),
et al., 2018).
and R&D expenditure (R&D expenditure to total assets ratio) (Sasaki,
Peterson and Jeong (2010) argue that companies invest their limited
2016). Marketing expenditure as a ratio to total sales is often referred to
budgets to creating value (such as new product development and pro­
as the marketing expenditure to sales ratio. This ratio measures the
motion) and allocating value (profitability in the market). According to
percentage of total sales revenue that a company spends on marketing
the resource-based theory, simultaneous investments in R&D and mar­
activities. It is a useful metric to evaluate a company’s marketing effi­
keting to create and capture value can lead to targeted performance and
ciency and effectiveness. A higher marketing expenditure to sales ratio
enhanced competitiveness. Although R&D and marketing expenditure
indicates that a company is spending more on marketing activities
positively impacts brand competitiveness, their combined effects might
relative to its total sales, which can either indicate a successful mar­
differ due to variations in their individual impacts on firms (Caglar and
keting strategy or inefficiency in the use of marketing resources (Chen
Nisel, 2017; Chen et al., 2016). The interaction of these two key factors,
et al., 2016). R&D expenditure can be measured as a ratio of R&D
which Peter Drucker mentioned as the sole profitability factors, can lead
expenditure to total assets. Using R&D expenditure as a ratio of total
to more substantial effects than their direct impacts alone. To the au­
assets helps normalize R&D spending relative to the size of the company.
thor’s knowledge, comprehensive research examining the interaction
This ratio is known as the R&D intensity ratio and is often used to
relationships between these variables and their impact on corporate
compare R&D spending across different companies in the same industry
performance in terms of brand competitiveness has been lacking.
(Hall and Van Reenen, 2000).
Therefore, this study aims to test the impact of the interaction effect
Control variables are leverage (total debts to total assets ratio), size
between marketing expenditure and R&D expenditure on brand
(sale value logarithm of the company), and age (number of active years)
competitiveness, and propose the following hypothesis.:
(Cheng et al., 2018; Fan et al., 2007; Sheng et al., 2011; Wu et al., 2012).
H3. There is a significant interaction effect between marketing Leverage is often measured using the total debts to total assets ratio. This
expenditure and R&D expenditure on the performance dimension of ratio represents the percentage of a company’s assets that are financed

4
A.A. Koshksaray et al. Journal of Retailing and Consumer Services 75 (2023) 103532

Table 1
Measuring variables.
Variable Variable Symbol Definition Measure Source
Type

Dependant Market Share of MS “A key indicator of the trend regarding customers’ selection among Share of the company Cheng et al. (2018),
the Company competitors” (Farris et al., 2010). from the total market Rego et al. (2013)
Independent Marketing ME Spending on various marketing activities such as branding, promotions, Marketing expenditure Cheng et al. (2018),
Expenditure customer services, and other intangible investments is called marketing to total sales ratio Jacobson (1990)
expenditure (Chen et al., 2016).
Independent R&D Expenditure R&DE R&D expenditure is the total money that companies are spending on such as R&D expenditure to Sasaki (2016)
the creation of value, developing products and strategies, and solving total assets ratio
problems (Cheng et al., 2018).
Control Leverage Lev Leverage refers to the practice of using borrowed funds to improve an Total debts to total assets Cheng et al. (2018),
investment’s potential return (Dakua, 2019). ratio Wu et al. (2012)
Control Size of the Size The extent of activity of a firm, known as firm size, can be measured by sales, Sale value logarithm of Cheng et al. (2018),
Company capital, employees, and profitability (Fan et al., 2007). the company Fan et al. (2007)
Control Age of the Age “Firm Age is the number of years the firm has been established” (Cheng et al., Number of active years Cheng et al. (2018),
Company 2018). and fields of activity Sheng et al. (2011)

through debt. A higher total debt to total assets ratio indicates that a balance sheets, and production and sales statistics, which are available
company is more heavily reliant on debt financing and thus may be more at the Tehran Stock Exchange Market’s official website (CODAL).
vulnerable to financial risk (Titman and Wessels, 1988). The natural Marketing expenditures and selling, general, and administrative
logarithm of a company’s sales value is often used as a measure of the (SG&A) expenses are reported differently in financial statements, but
size of the company. This is because the relationship between a com­ they can overlap to some extent. Marketing expenditures are costs
pany’s sales and its size is typically non-linear, with larger companies related to promoting and advertising a company’s products or services
having exponentially higher sales values than smaller companies. Tak­ to potential customers. These expenses can include things like adver­
ing the logarithm of the sales value allows for a more meaningful and tising campaigns, public relations efforts, and promotional events. In
interpretable comparison of the sizes of companies across different financial statements, marketing expenses are typically reported as a
scales (DeAngelo and DeAngelo, 2000). Finally, the age of a company separate line item under operating expenses. SG&A expenses, on the
can be measured by the number of active years it has been in operation. other hand, are broader and include all of the expenses associated with
This is a commonly used measure of a company’s age, as it reflects the running a company’s day-to-day operations, such as salaries and wages,
length of time that the company has been in existence and operating in rent, utilities, office supplies, and travel expenses. This category also
its industry (Lambert et al., 2007). includes marketing expenses, but it encompasses a wider range of costs
(Markovitch et al., 2020). In some cases, marketing expenses may be
included in SG&A expenses, and in other cases, they may be reported
3.2. Data collection and sample
separately. The exact reporting practises can vary depending on the
company and the accounting standards in use. Therefore, based on the
A statistical sample of the present study consists of 145 companies
situation, the data was gathered directly and indirectly from explanatory
admitted by the Tehran Stock Exchange Market, with 11 industries
notes in companies’ annual financial reports.
dating from 2011 to 2017. The companies were selected using the sys­
The study has conducted a Sargan test to evaluate the validity of all
tematic removal method from 485 companies present on the Tehran
instruments. The Sargan test, also known as the Sargan-Hansen test, is a
Stock Exchange Market, considering the following criteria. The reason
statistical test used to evaluate the validity of the overidentifying re­
for choosing these criteria is to ensure that homogenous samples are
strictions in the instrumental variable (IV) regression model (Sargan
selected.
John, 1988). In an IV regression model, instrumental variables are used
The Tehran Stock Exchange (TSE) is ranked in the top 20 major stock
to address potential endogeneity issues caused by omitted variable bias
exchanges in the world (Bloomberg, 2019; Forbes, 2021). It is also Iran’s
or measurement error in the independent variable(s). The Sargan test
largest stock exchange, which first opened in 1967. As of 5.5 million
evaluates whether the IVs used in the model are uncorrelated with the
registered companies in Iran, 485 companies with a combined market
error term in the regression equation, which is a crucial assumption for
capitalization of US$172 billion were listed on TSE based on the Iran
the validity of the IV estimator. The Sargan test compares the difference
Chamber of Commerce, Industries, Mines, and Agriculture (ICCIMA)
between the observed and predicted values of the dependent variable in
report in 2019. But based on World Federation of Exchanges (WFE), the
the IV regression model and tests whether the difference is significantly
TSE is ranked 17th in the world by market capitalization among ex­
different from zero using a chi-square distribution. If the test statistic is
changes with a market cap of over US$1 trillion.
statistically significant, it suggests that the overidentifying restrictions
Considering the required information for 2011 to 2017, the selected
are not valid and the IV regression model may be misspecified (Hasen,
companies were admitted to Tehran Stock Exchange Market by March
1982).
2011 and have not been removed until March 2018. To enhance the
In addition, in the context of statistical modeling, it is important to
comparability of the selected companies, their financial period must end
ensure that the data used to estimate the model is valid and reliable. This
by the 20th of March. The companies must keep the financial year the
can be achieved by using appropriate sampling methods, carefully
same within the subject period. The selected companies cannot be bro­
selecting and measuring the variables used in the model, and conducting
ker companies (investment companies, holdings, leasing companies,
robustness checks to ensure that the results are not sensitive to changes
banks, and insurance companies) because such companies have different
in the model specification or assumptions (Hair, 2009; Kline, 2016). On
performance, and previous studies have also included only non-financial
the other hand, while the study used secondary data, it did not include a
sector companies in their sample, such as Cheng et al. (2018).
validation or reliability test. The authors ensured that the data collected
Required information about the selected companies (including said
for their study met the criteria for validity and reliability.
variables) must be available. The required data on R&D expenditure are
extracted from the performance reports submitted to the general as­
sembly. The data relating to other variables are extracted from the
audited financial statements, including profit and loss statements,

5
A.A. Koshksaray et al.
3.3. Data analysis
Considering the defined equations, the statistical model used in the
present study is the Generalised Method of Moments (GMM) (Alam
et al., 2019). The GMM is a method of estimating the model parameters
in the panel data solution. This method takes the effects of the depen­
dent variables’ dynamic adjustments into consideration. Variables that
exhibit time-lagged effects need to be included in the model with delays.
For instance, if a company invests in R&D this year, the effect of this
investment on performance may only be observed in the following year.
If the dependent variable delays entering the model, a correlation occurs
between the descriptive variables (regressors) and error term or resid­
ual; therefore, using the normal least squares method will result in
incompatible results. The GMM can solve this problem by using instru­
mental variables. This method consists of two important tests named
Arellano and Bond (1991) tests.
The GMM is a statistical technique employed to estimate the un­
known parameters in a given model by matching the statistical prop­
erties (termed as moments) of the observed data with the ones predicted
by the model. The moments in question could be any of the statistical
properties, such as the mean or variance, derived from the observed data
(Hall, 2005). The GMM relies on the construction of moment conditions,
which are the equations that establish a relationship between these
moments and the parameters of the model. The goal of the GMM is to
identify the parameter values that reduce the moment conditions to zero
or as close to zero as possible.
A significant advantage of GMM is its ability to function in the
absence of specific assumptions about the underlying data distribution,
unlike other popular techniques like maximum likelihood estimation.
Instead, the GMM approach only necessitates well-defined moment
conditions and a stationary and ergodic data-generating process (Stock
and Watson, 2003). Empirically, the GMM technique has found various
applications in the fields of economics and finance, such as asset pricing,
forecasting, and panel data analysis. Its widespread adoption is pri­
marily due to its flexibility and ability to handle complex statistical
models (Hasen, 1982).
The GMM is a powerful model which, unlike the maximum likeli­
hood method (ML), does not need information on the exact distribution
of error phrases. Indeed, this is a dynamic model; where, in addition to
the main variables, the delayed variables enter the pattern to have a
better and more realistic estimation of the model. It can be said that
many of the normal econometrical estimators can be regarded as special
cases in GMM. In the dynamic GMM, the delay of the dependent variable
is used as a dynamic tool with specified delays (Alam et al., 2019). Also,
to avoid the correlation between the dependent variable, the delay, and
the error phrase, the delay of the descriptive variables is used as a tool
(Arellano and Bond, 1991). Therefore, according to Arellano and Bond
(1991), who introduced this estimation method, only tools without
correlation with error phrases are suitable for the GMM method. If this
condition applies, indeed, GMM estimations are compatible. Thus, the
instrumental variables used in the model are verified by the Sargan test,
which was introduced by Arellano and Bond (1991). The theoretical
formulas by which the parameters are estimated in this model are usu­
ally the orthogonal situations between a function (probably linear) of
the parameters, f(θ), and a series of instrumental variables (Zt ), and
indeed θ is the parameter that must be estimated.
E[f (θ)′Z] = 0
Indeed, if the data are entered into GMM as follows:
Equation : c(1) ∗ log(y) + X c2
Specification : c Z Z(− 1)
This orthogonal situation is calculated through the following equa­
tions:
6
Journal of Retailing and Consumer Services 75 (2023) 103532
∑( )
c(1)log yt + Xtc2 = 0
∑( )
c(1)log yt + Xtc2 Zt = 0
∑( )
c(1)log yt + Xtc2 Zt− 1 = 0
The static panel method has particular problems in the fields of serial
correlation, heteroscedasticity, and endogenous for some of the
descriptive variables. The GMM estimator helps the researchers solve
the serial correlation, heteroscedasticity, and endogenously problems
for some variables.
GMM can be used to address the issue of serial correlation by esti­
mating the parameters of the model based on a set of moment condi­
tions. In GMM, the parameter estimates are chosen to minimize the
distance between the sample moments (i.e., the sample mean, variance,
and covariance) and the corresponding population moments implied by
the model. By using a set of moment conditions that incorporate lagged
values of the variables, GMM can account for serial correlation in the
error terms. Thus, GMM can be used to overcome the problem of serial
correlation by incorporating moment conditions that account for the
autocorrelation in the error terms (Hasen, 1982). In this regard, the
Arellano-Bond test, also known as the AR(1) and AR(2) tests, is a test for
first-order and second-order autocorrelation, or serial correlation, in
panel data. It is commonly used in econometrics to check the validity of
the GMM estimator in dynamic panel models (Arellano and Bond, 1991).
Since in the dynamic panel model, the delay of the dependent vari­
able is correlated to the inference phrase, the second delay of the
dependent variable and delays of the other variables (in the form of a
return model) are used as instruments for the delay of the dependent
variable in the GMM method. Using this method, to estimate the model,
it is necessary to determine the instrumental variables used in the model.
The instrumental variables of these models are the delayed values of
the dependent and descriptive variables. The compatibility of the GMM
estimators depends on the validity of the employed instrumental vari­
ables and the assumed lack of serial correlation between the error
phrases. This validity can be verified by the two tests recommended by
Arellano and Bond (1991). The statistics proposed by Arellano and Bond
(1991) and Blundell and Bond (1998) are used to check the validity of
the instruments matrix. This test is known as the Sargan test and verifies
the validity of all instruments used in the model.
Statistics of the Sargan test are of the chi-square distribution, where a
degree of freedom is equal to several over-identifying restrictions, and
the zero hypothesis indicates the lack of correlation between the in­
struments and the inference components. Sargan test involves pre­
defined restrictions and is used to determine all types of correlation
between the instruments and the errors. The instruments are valid only
when there is no correlation between the instruments and the error
phrases. The zero hypothesis in this test indicates that the instruments
are valid as long as they are not correlated to the errors in the first-order
differential equations; and confirming the zero hypotheses can provide
evidence of the fitness of the instruments. The GMM system model is
compatible when there is no second-order correlation between the
remaining values. If the GMM estimator is compatible and its in­
struments are valid, the dynamic panel data model will also be valid.
Table 5 presents the results of the Arellano-Bond test, which confirms
the zero hypotheses for both first and second order serial correlation,
with a probability of the statistical error greater than 0.05. Moreover,
the validity of the instruments used in all the estimated models is
confirmed by the fact that the probability of the Sargan test’s Prob is
greater than 0.05, indicating that the null hypothesis is accepted. These
results provide a strong basis for confidence in the reliability of our
findings.
A.A. Koshksaray et al. Journal of Retailing and Consumer Services 75 (2023) 103532

4. Result Table 3
Unit root test results.
The data analysis in this paper is divided into two sections: Variable Statistic Statistic Error Test Process Result
descriptive statistics and inferential statistics. Descriptive statistics Value Probability
provide a comprehensive overview of the statistical sample, including MS − 45.4 0.00 Intercept and Confirm
measures such as the mean, median, and standard deviation of variables. Trend
Inferential statistics include tests such as the unit root test, the variance ME − 37.8 0.00 Intercept and Confirm
inflation factor (VIF) test, and the results of the model. Trend
R&DE − 55.5 0.00 Intercept and Confirm
Trend
4.1. Descriptive statistics Lev − 19.9 0.00 Intercept and Confirm
Trend
Size − 26.0 0.00 Intercept and Confirm
Table 2 shows the descriptive indicators of the variables, including Trend
their dispersion and concentration indicators, to provide a more accu­ Age − 4.0 0.00 Intercept Confirm
rate understanding of the statistical sample situation.

4.2. Inferential statistics
4.2.1. Unit root test
A unit root test is a statistical test used to determine whether a time
series dataset is stationary or not. Stationarity means that the statistical
properties of the dataset, such as the mean and variance, remain con­
stant over time. Unit root tests help to identify the presence of a unit
root, which is an indication that the dataset is non-stationary. Unit root
tests are commonly used in econometric studies, especially in time series
analysis, to ensure that the data meets the necessary assumptions for
estimation and inference (Kwiatkowski et al., 1992).
If the unit root test indicates that the variables are stationary (i.e., the
null hypothesis of a unit root is rejected), then it suggests that the var­
iables are integrated of order zero or I(0). In this case, there is no need to
test for cointegration, as the variables are already stationary and any
long-run relationship between them can be captured by including a
constant term in the model. However, if the unit root test indicates that
the variables are non-stationary (i.e., the null hypothesis of a unit root is
not rejected), then it suggests that the variables are integrated of order
one or higher (I(1), I(2), etc.). In this case, the variables may have a long-
run relationship, and a cointegration test is necessary to investigate
whether a linear combination of the variables is stationary. Some
commonly used cointegration tests include the Johansen test and the
Engle-Granger test (Dickey and Fuller, 1979). Therefore the unit root
test is used to verify the sustainability of the variables. The test results
are provided in Table 3.
All variables are sustainable since the probability of the statistics is
smaller than 0.05 in all variables. Considering the results, the research
variables are of zero-order cointegration; i.e. I(0), therefore there is no
need for doing the cointegration tests.
removed from the model to improve its accuracy (Dickey and Fuller,
1979). In this regard, if the test statistic of VIF is close to one, no
collinearity exists. As an empirical rule, if VIF value is greater than 5, the
multicollinearity will be higher. Only independent variables are used to
calculate this coefficient. This coefficient is calculated using the
following formula:
1
VIF = ( )
1 − R2
R2 is equal to the R-squared coefficient of fitness of the selected in­
dependent variable on the other independent variables. Table 4 shows
the results of this test for all independent variables. As can be seen, all
VIF values were close to 1, indicating that there were no significant
multicollinearity issues among the variables. The variables used in the
regression model are therefore not highly correlated, and the regression
coefficients can be interpreted with confidence.
4.2.3. Model results
Based on the results obtained from the GMM in Table 5, the result of
the estimation of effects are as follows.
4.2.3.1. Marketing expenditure effect. The effect of marketing expendi­
ture on market share (H1) was supported in both model 2 (p = 0.03, t =
2.14) and model 3 (p = 0.01, t = 2.64). The study provides strong evi­
dence of the positive influence of this resource on brand competitive­
ness. In other words, as companies increase their marketing expenses,
their brand competitiveness improves in alignment with their market
performance and sales share. These findings underscore the significant
impact of investing in marketing campaigns on brand competitiveness.

4.2.2. Variance inflation factor test Table 4

The variance inflation factor (VIF) is a statistical test used to detect VIF test results.
multicollinearity among predictor variables in regression analysis.
Variable VIF Criteria Result
Multicollinearity occurs when two or more independent variables in a
ME 1.10 Close to 1 No collinearity
regression model are highly correlated with each other, leading to un­
R&DE 1.02 Close to 1 No collinearity
stable and unreliable coefficient estimates. The VIF test measures the Lev 1.02 Close to 1 No collinearity
degree of correlation between each predictor variable and the other Size 1.04 Close to 1 No collinearity
independent variables in the model. A high VIF value indicates that a Age 1.06 Close to 1 No collinearity
variable is highly correlated with other variables and may need to be

Table 2
Descriptive indicators of the variables.
Variables Operation Mean Median Maximum Minimum Standard Deviation N

MS Share of the company from the total market sales 0.08 0.03 0.86 0.0000418 0.12 1015
ME Marketing expenditure to total company sales ratio 0.02 0.01 0.24 0.000169 0.03 1015
R&DE R&D expenditure to total company assets ratio 0.01 0.01 0.29 0.000102 0.03 1015
Lev Total company debts to total company assets ratio 0.61 0.61 4.00 0.03 0.28 1015
Size Sales value logarithm of the company 6.20 6.06 8.60 3.87 0.78 1015
Age The number of active years the company has been in operation 35.92 36.00 105 7 15.10 1015

7
A.A. Koshksaray et al. Journal of Retailing and Consumer Services 75 (2023) 103532

Table 5 H1 examined marketing expenditure on the performance dimension

Model estimation results. of brand competitiveness and the findings are in line with the previous
Models Effects on Market Share studies (Cheng et al., 2018; Haryanto and Retnaningrum, 2020; Peterson
and Jeong, 2010). It demonstrates that the market share and overall
1 2 3
performance of companies in the market are adequately sensitive to
ME(-1) 0.36 0.84 marketing expenditure, and similar studies properly support this
T-value 2.14 2.64
P-value 0.03 0.01
argument.
R&DE(-1) 0.03 0.95 The study has found that H2, which examined the direct effect of
T-value 1.12 1.93 R&D on performance, has a different result. In this examination, the
P-value 0.26 0.05 direct effect of R&D on market share was partially confirmed. It shows
ME£R&DE 40.62
that the market share of the companies is sensitive to R&D expenditures,
T-value 1.72
P-value 0.09 but not as significant as marketing expenditures, especially in devel­
Lev 0.01 0.03 0.06 oping countries. The marginally significant result might be attributed to
T-value 0.56 1.25 1.67 the nature of a developing country, such as Iran, where the economy
P-value 0.58 0.21 0.10 operates under sanctions and R&D is at a lower level. In such circum­
Size 0.01 0.04 0.04
T-value 0.44 2.24 1.90
stances, the country often relies on adopting R&D from developed
P-value 0.66 0.03 0.06 countries rather than having extensive indigenous R&D capabilities
Age 0.00 0.00 0.00 (Akcali and Sismanoglu, 2015).
T-value 0.43 − 2.32 − 2.45 Finally, the result of H3, which examined the interaction effect of
P-value 0.67 0.02 0.01
marketing and R&D expenditures on the performance dimension of
AR(1) − 0.33 − 1.49 − 0.97
Prob 0.74 0.14 0.33 brand competitiveness, supported their effect on market share with 90%
AR(2) − 1.02 − 1.20 − 0.38 confidence. It demonstrates that companies’ market share is affected by
Prob 0.31 0.23 0.70 the interaction of marketing and R&D expenditures. However, the effect
Sargan Test (PVAL) 0.77 0.69 0.77 was only marginally significant in the specific research context of Iran.
Future research should interpret the results cautiously, especially when
4.2.3.2. R&D expenditure effect. The effect of R&D expenditure on applying them to other research contexts. Iran’s economic sanctions and
market share (H2) was not significant in Model 2 (p = 0.26, t = 1.12); lower R&D investment compared to developed nations might contribute
however, in Model 3 it was marginally significant (p = 0.05, t = 1.93) in to these findings, as the country often relies on adopting R&D from
statistical significance at the 10% level. Thus, there is evidence sup­ external sources instead of having extensive indigenous R&D capabil­
porting R&D expenditure as a significant antecedent of brand competi­ ities (Akcali and Sismanoglu, 2015). Therefore, the interaction of these
tiveness, and H2 is supported. This result is intriguing, particularly two key factors, which Peter Drucker mentioned as the only profitability
considering the study’s context is in Iran, where R&D expenditure may factors, can produce more complementary effects than direct effects
not be a primary focus. Several possible explanations for the marginal alone. Accordingly, companies are recommended not to overlook mar­
effect of R&D on brand competitiveness in this context could be the keting and/or R&D investments in order to achieve long-term perfor­
country’s economic sanctions, its status as a developing nation with mance as both marketing and R&D expenditures can enhance the
lower levels of R&D investment, and its reliance on adopting R&D from companies’ brand competitiveness. However, as the effect of R&D was
developed countries (Akcali and Sismanoglu, 2015). marginally significant, companies also need to invest in marketing to
simultaneously increase their competitiveness.
4.2.3.3. Marketing and R&D expenditure interaction effect. The interac­
tion effect between marketing expenditure and R&D expenditure on 6. Research implications
brand competitiveness (H3), was marginally significant in model 3 (P
value = 0.09, T = 1.72) in statistical significance at the 10% level. 6.1. Theoretical implications
Therefore, H3 is partially supported in this study, This result shows that
investing in R&D and marketing together will improve the brand The first contribution of this study is related to brand competitive­
competitiveness of companies in the long run, further than each in­ ness which explains its antecedents through the lens of the resource-
vestment alone. In other words, by using marketing to support the based theory, which needs more research in the literature.
company’s innovations and launch new products, companies will ach­ This study has made a significant contribution to the brand
ieve better long-run brand competitiveness. competitiveness literature by introducing a novel perspective and
While the results indicate it is important that both R&D and mar­ providing a clear definition and antecedents of the concept. By
keting are invested simultaneously, marketing expenditures play a more addressing the existing gaps in the literature, this study has advanced
significant role in improving brand competitiveness, specifically in the understanding of brand competitiveness and provided new insights
developing countries such as Iran. The existing literature in this domain for future research in this area. Initially, it presented an affirmation of
remains unexplored, making this research crucial in uncovering impli­ defining this concept by performance indicators (Baumann et al., 2021;
cations for both theory and practice, supported by gathered evidence. Rao and Holt, 2005) and real data of companies. On the other hand,
while the literature lacks a consistent understanding of the antecedents
5. Discussion and consequences of brand competitiveness, this study identifies and
examines two important antecedents, thereby contributing to the theo­
Three hypotheses have been tested in the present study to investigate retical understanding of this concept.
the long-term effects of R&D expenditure, marketing expenditure, and Second, this is among the first longitudinal study that provides
their interaction on the performance dimension of brand competitive­ empirical evidence related to brand competitiveness through a perfor­
ness. The results show the accumulative effect of these two expenditures mance indicator, extending previous research such as Gupta et al.
when they are simultaneously combined to achieve high brand (2020) and Winzar et al. (2018). The significant effects revealed in this
competitiveness in the long run (e.g. sales growth and market share, in study highlight the potential for remarkable performance outcomes
the long run, are influenced by investments related to marketing and when marketing and R&D investments are made concurrently, and
R&D). marketing campaigns adequately support each R&D effort. Parallel in­
vestments in R&D (i.e., create value) and marketing (i.e., appropriating

8
A.A. Koshksaray et al.
value) leads to higher performance and competitiveness, compared to
allocating the budget for just one of these activities. Finally, the study
extends resource-based theory by highlighting the complementary and
interaction effects of investment in marketing and R&D resources. Thus,
this study contributes to the resources-based theory (Barney et al., 2021;
Ramaswami et al., 2009; Sharma and Erramilli, 2004), such that various
resource interactions have multiple effects on performance and
competitiveness. Besides, this study considers marketing and R&D as
prominent resources of companies, emphasising specific resources
boosting competitive advantage and performance (Sharma and Erra­
milli, 2004; Vadakkepatt et al., 2021).
6.2. Practical implications
Based on the theoretical implications explained above, the results of
this study provide crucial practical implications for company managers,
especially in developing countries.
The study reveals that simultaneous investments in R&D and mar­
keting lead to outstanding performance. Therefore, companies are
highly recommended to invest equally in both R&D and marketing ac­
tivities, as they have overlapping and complementary interactions
(Webster Jr, 2009). One way that managers can leverage the comple­
mentary interactions between R&D and marketing is by utilizing the
research-based functions of marketing, such as consumer insights and
market analysis, to guide the step-by-step processes of developing new
products designed by R&D. Since marketing activities feed into R&D
activities (Peterson and Jeong, 2010), ceasing investment in marketing
could result in poor performance for R&D activities and ultimately have
a negative impact on overall performance and brand competitiveness.
Thus, it is crucial for companies to maintain investing in marketing to
maximize their performance outcomes.
Second, as companies often have to work with limited budgets
(Peterson and Jeong, 2010), it is recommended to invest equally in
important capabilities to achieve long-term competitiveness even during
economic crises. Lastly, by adopting a balanced approach that considers
resource interactions, drawing from resource-based theory, long-term
competitiveness can be further enhanced. The current business envi­
ronment is characterized by growing technology and complex compe­
tition, where R&D plays a vital role in developing new products and
services (Tung and Binh, 2022). However, the adoption process and
brand competitiveness require marketing insights throughout the pro­
cess, from idea generation to production and consumption stages.
Therefore, this study offers a valuable framework to guide companies in
formulating effective marketing, innovation, and branding strategies to
enhance their long-term competitiveness in the market.
7. Conclusion, limitations and future research directions
The study defined and measured brand competitiveness as the pre­
vious performance of a company (Rao and Holt, 2005) and based on
resource-based theory (Barney et al., 2021). It illustrated how we can
assess brand competitiveness by the performance of companies with
their real data in financial statements. It showed that the literature needs
to understand the antecedents of brand competitiveness and how the
interaction effect of marketing expenditure and R&D expenditure can
improve brand competitiveness more than their single effects (Liu et al.,
2021). Based on the results, it has been demonstrated that marketing
serves as a stronger predictor of brand competitiveness in the long run
compared to R&D expenditures. The interaction between marketing and
R&D has the potential to yield positive outcomes, but managers must
exercise caution due to the non-attainment of the significance level of
0.05. For companies in developing countries, especially those currently
possessing R&D capabilities but lacking in marketing, it becomes
imperative to bolster their marketing efforts to enhance competitiveness
and leverage the full potential of their R&D investments.
In this regard, similar to other studies, some limitations affected the
9
Journal of Retailing and Consumer Services 75 (2023) 103532
research process, which can be considered. First, theoretically, there were
limited sources and frameworks related to brand competitiveness, which
affected the generalizability of the results of this study. Second,
conceptually, brand competitiveness encompasses qualitative indicators,
yet many companies did not provide any real data concerning them.
Third, methodologically, the unavailability of comprehensive data from a
wide range of companies posed a challenge. Additionally, some essential
indicators like competitiveness, marketing, and R&D were absent from
the model due to companies’ non-disclosure. Furthermore, several
companies submitted their statements belatedly, precluding their in­
clusion in the study. Furthermore, although the research was conducted
using data from the Tehran Stock Exchange, future studies could
enhance the generalizability of the findings by including data from other
stock exchanges as well.
Hence, for future research, there are several avenues worth
exploring. Firstly, conducting comparative studies of this model in
diverse countries and stock markets would provide valuable insights.
This would enable a deeper understanding of the findings in various
contexts. Second, as this study contributed to the resources-based theory
that the interaction effects of resources have more than a single effect,
future research can design frameworks that explore synergetic outcomes
resulting from the interaction of different tangible and intangible re­
sources within organizations. For example, understanding which
resource interactions yield greater improvements in performance and
competitiveness can provide essential guidance to decision-makers.
Furthermore, in-depth investigations could focus on specific compo­
nents of marketing and R&D resources to identify which elements
contribute the most to brand competitiveness. This knowledge would be
highly beneficial for organizations seeking to optimize their strategies.
Finally, future studies can conceptualise brand competitiveness through
both quantitative and qualitative components and identify its anteced­
ents and consequences in different industries and cultures.
Declaration of competing interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
the work reported in this paper
Data availability
Data will be made available on request.
Appendix A. Supplementary data
Supplementary data to this article can be found online at https://doi.
org/10.1016/j.jretconser.2023.103532.
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 Industrial Marketing Management 115 (2023) 439–454

Contents lists available at ScienceDirect

Industrial Marketing Management

journal homepage: www.elsevier.com/locate/indmarman

Online reverse auctions research in marketing versus SCM: A review and

future directions
Roberto Mora Cortez, Pablo Cabanelas *, Jon Charterina
a
Department of Entrepreneurship and Relationship Management, Southern Denmark University, Kolding, Denmark
b
Department of Business Organization and Marketing, University of Vigo, Vigo, Spain
c
Department of Business Economics and Commercialization, University of the Basque Country (UPV/EHU), Spain

A R T I C L E I N F O A B S T R A C T

Keywords: An online reverse auction (ORA) is a dynamic procurement mechanism that allows suppliers to compete in real
Reverse auctions time via a platform to gain a buyer’s business. The ORA is a technological tool introduced in the late 1990s,
E-marketplace gaining proponents and detractors among practitioners and academics. Remarkably, while practitioner interest
Procurement auctions
in ORAs has grown, related marketing and supply chain management (SCM) research has declined. This
Systematic review
contradiction between theory and practice suggests the need to conduct a systematic review to provide readers
with a state-of-the-art understanding of ORAs and recommend fruitful avenues for further research. We focus on
the marketing literature and contrast the findings with SCM literature, in such an analysis practical relevance is
stressed. Our study offers three main contributions: (1) integration of the cumulative marketing knowledge on
ORAs in the 2002–2020 period, (2) development of a three-layer framework of the ORA domain (i.e., concep­
tualization, ORA as a process, and research setting), and (3) construction of a new research agenda to deal with
scholarly challenges and emerging trends.

1. Introduction achieved satisfactory results following a “step-by-step recipe” – this

The marketing field has been interested in organizational buying
behavior for several years, but research has become stagnant recently
(Narus & Steward, 2017). A particularly interesting technological tool
that deserves closer attention is the online reverse auction (ORA; Jap,
2003; Mora Cortez & Johnston, 2020; Muylle & Standaert, 2016). An
ORA is “a real-time, dynamic procurement mechanism used by a buyer with
multiple suppliers” (Sambhara, Rai, Keil, & Kasi, 2017, p. 1114). ORAs are
intrinsically linked to the business-to-business (B2B) environment since
they are not yet deployed in consumer settings. In brief, reverse auctions
allow suppliers to compete on an online platform by reducing their bid
price for industrial offerings to gain the buyer’s business.
Extant B2B marketing research identifies ORAs as a relevant pur­
chasing practice (e.g., Pedersen, Ellegaard, & Kragh, 2020). The primary
motive for buyers to use ORAs is “to reduce procurement cost to achieve a
cost benefit of 5-15%” (Sambhara, 2020, p. 1). For example, Google used
reverse auctions to obtain the lowest price for 1.2 GW of renewable
energy (Driscoll, 2019). While ORA usage has grown from 15% to 50%
in the last two decades (Forde, 2019), research on ORAs is relatively
scarce. If our understanding of ORAs were complete – and all firms
topic would not be relevant. However, this is undoubtedly not the case.
Indeed, recent research concludes that reverse auctions suffer from a
disconnected conceptualization, calling for a systematic review to
expand the field of B2B marketing (see Mora Cortez & Johnston, 2020,
p. 561). Thus, the purpose of this study is to consolidate B2B marketing
research into ORAs to recommend fruitful avenues for further research.
Recent studies indicate that the role of ORAs as an effective pro­
curement mechanism has been questioned (e.g., Hanák, Marović, &
Jajac, 2018). Despite the touted savings benefits for buyers, this
internet-enabled setting triggers tension in buyer-seller relationships,
fosters zero-sum negotiations, and may force sellers to reassess their
established marketing activities (Jap, 2007; Standing & Standing,
2015). The complexity generated by ORAs has culminated in some firms
increasing their implementation while other firms are discontinuing
them (Sambhara et al., 2017). This evident contradiction requires con­
ceptual coherence via further academic inquiry to bridge theory-
practice gaps and provide richer comprehension of executing quality
reverse auctions. Extant literature also suggests investigating how the
understanding of ORAs in other fields can be integrated with what we
know in B2B marketing (see Mora Cortez & Johnston, 2020, p. 561).

* Corresponding author.
E-mail addresses: rfmc@sam.sdu.dk (R. Mora Cortez), pcabanelas@uvigo.es (P. Cabanelas), jon.charterina@ehu.eus (J. Charterina).

https://doi.org/10.1016/j.indmarman.2023.10.011
Received 27 April 2023; Received in revised form 9 September 2023; Accepted 13 October 2023
Available online 1 November 2023
0019-8501/© 2023 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
R. Mora Cortez et al.
Since the marketing function creates demand for offerings and the SCM
function fulfills that demand (Golgeci & Gligor, 2017, p. 473), we
enhance our findings with a comparative analysis vs. SCM literature.
Better understanding of the state of knowledge and consolidation of
emerging concepts that appeal to modern practices in the “real world”
are drivers of meaningful theory development. One way to explore how
research has approached this intriguing topic is through systematic re­
views (Morgan, Whitler, Feng, & Chari, 2019). This is highly relevant for
advancing marketing literature that stresses the controversial nature of
the concept, but also demands enabling of cumulative knowledge
development (e.g., Mora Cortez & Johnston, 2020). Since the first ORA
marketing article published by Jap in 2002, several technological and
marketplace changes have occurred, creating inherent research oppor­
tunities (Liang, Hong, Chen, & Shao, 2022).1 In this way, our study
addresses the following research questions: (1) How has the marketing
literature on ORAs evolved during the 2002–2020 period?; (2) What
conceptual model can capture such an evolution?; (3) What is the state
of ORA research in the marketing field relative to the SCM field; and (4)
What research agenda can stimulate relevant and rigorous research
endeavors in the marketing field?
We contribute to research in three major ways. First, ORA research
published in top-tier, reputable, and specialized (B2B) journals over the
last 19 years (2002− 2020) has been decreasing over time, focusing on
partial mechanisms of the tool without monitoring for several factors
(see Tayaran & Ghazanfari, 2020, p. 3) that could have affected the
process. The literature lacks a more holistic approach to strategic
sourcing, and there is very limited simultaneous scrutiny of all actors
participating in an ORA (i.e., buyer, seller, and market-maker). This
narrow view creates a significant gap in marketing knowledge since
technology-based procurement tools seem to be expanding rapidly
across buying centers in many industries (Cabanelas, Mora Cortez, &
Charterina, 2023; Forde, 2019).
Second, we develop a new perspective on ORAs, identifying three
key activities related in a process-based model (i.e., pre-, during-, post-
auction). This represents the core of a new framework used to evaluate
the state of the field, identifying theoretical gaps, and providing further
research directions. We use it as a lens to analyze the literature from a
time-driven structural motif, facilitating the recognition of interesting
under-researched streams. For instance, we show that most studies
either describe reverse auctions in a general manner or are focused on
one or two of the identified activities, mainly the pre- and post-auction
stages, by investigating how changes in the tool setup can generate
different outcomes (e.g., price). Conversely, we find that no single
marketing study longitudinally explores the ORA phenomenon to pro­
vide enough depth to all three stages. The emerging model is supported
by managers, fostering practical validity (Web Appendix E).
Third, building over the most inspiring findings for furthering the­
ory, we identify a new research agenda for future ORA studies in mar­
keting. Integrating existing knowledge within a domain of inquiry and
assessing the communal evidence in a specific area of marketing
together form a significant phase in knowledge generation (Palmatier,
Houston, & Hulland, 2018). The accumulation of knowledge serves as a
response to the astronomical speed at which marketing practice is
changing, driving the importance of academic research and its legiti­
macy to practitioners (Snyder, 2019). We, therefore, regard managerial
utility as crucial to framing and selecting the directions for a thought-
provoking research agenda that would contribute to updating the
organizational buying-behavior research stream, last consolidated more
than 25 years ago (see Johnston & Lewin, 1996).
2. Method
A review paper is a critical evaluation of material that has already
1
An initial summary of ORA marketing research is presented in Appendix A.
440
Industrial Marketing Management 115 (2023) 439–454
been published. This paper follows the systematic review approach (e.g.,
Snyder, 2019) to execute a domain-based review on ORAs to scrutinize,
synthesize, and extend the body of literature in the same substantive
domain (Palmatier et al., 2018). The aim is to “identify all empirical ev­
idence that fits the pre-specified inclusion criteria to answer a particular
research question or hypothesis” (Snyder, 2019, p. 334). Following liter­
ature review best practices, the process (see Fig. 2) was designed to
provide an integrated overview of the current state of knowledge on
reverse auctions, develop a conceptual framework to reconcile extant
marketing research, and delineate future research directions.
The first step is preparation, which involves identifying target jour­
nals. Our review targeted peer-reviewed journals in the marketing field
to provide focus (in line with Dekimpe & Deleersnyder, 2018). Thus,
textbooks, conference papers, practitioner papers, and working papers
were excluded.2 As suggested by Morgan et al. (2019), we explored the
most influential marketing journals in the field of strategic marketing:
Journal of Marketing (JM), Journal of Marketing Research (JMR), Journal
of the Academy of Marketing Science (JAMS), Marketing Science (MS),
Journal of Retailing (JR), and International Journal of Research in Mar­
keting (IJRM). Then, B2B specialized marketing journals were included
(in line with Cabanelas et al., 2023): Industrial Marketing Management
(IMM), Journal of Business and Industrial Marketing (JBIM), Journal of
Business-to-Business Marketing (JBBM), and Journal of Business Market
Management (JBMM). In addition, we included marketing journals
ranked equal to or above 3 by the Chartered Association of Business
Schools (Chartered Association of Business Schools (CABS), 2018) to
ensure coverage and high quality: European Journal of Marketing (EJM),
International Marketing Review (IMR), Journal of Advertising (JA), Journal
of Advertising Research (JAR), Journal of Consumer Psychology (JCP),
Journal of Consumer Research (JCR), Journal of Interactive Marketing
(JINTM), Journal of International Marketing (JIM), Journal of Public Policy
and Marketing (JPPM), Marketing Letters (ML), Marketing Theory (MT),
Psychology and Marketing (PM), and Quantitative Marketing and Economics
(QME). Finally, the Journal of Business Research (JBR) was included due
to its importance for marketing strategy research (Kienzler & Kowal­
kowski, 2017).
Next, to provide a comparative analysis with the literature on the
demand side of business, we explored the most influential SCM journals.
We followed the CABS 2018 ranking, selecting those ranked equal to or
above 3. We streamlined the selection by asking a panel of 14 SCM
scholars to identify and rank the key outlets for reverse auctions liter­
ature (agreement reached at Kendall’s W: 0.58, p < 0.01): Journal of
Business Logistics (JBL), Journal of Operations Management (JOM), Man­
agement Science (MAS), International Journal of Operations and Production
Management (IJOPM), Operations Research (OR), Journal of Supply Chain
Management (JSCM), Production and Operations Management (POMS),
International Journal of Production Research (IJPR), and Journal of Pur­
chasing and Supply Management (JPSM). The rationale for the compara­
tive analysis is that marketing and SCM functions represent different
communities of practice (Wenger, 2004). Thus, each function develops a
shared practice for their managers, creating boundaries and establishing
unique mental models affecting knowledge management (Rook, 2013).
In an ORA context, buyers and sellers are counterparts trying to control
information flows (Sambhara, 2020). If more knowledge is produced by
one of the supportive disciples for buyers (SCM) and sellers (marketing),
a potential practical imbalance can be generated. Thus, contrasting both
research streams seems pertinent.3
The second step is articles pre-selection. It entails identifying the
search approach and search databases. The selected keywords were:
2
Relevant content published in such sources is added throughout the text but
not included in the summary tables.
3
73.9% of 134 US marketing managers surveyed during a B2B Summit,
preferred a separated analysis for SCM and marketing literature in order to
better represent the “business reality.”
R. Mora Cortez et al.
“auction,” “e-procurement,” “e-marketplace,” “electronic markets,”
“reverse auction,” “online reverse auction,” “procurement auction,” and
“electronic auction.” Following prior B2B systematic reviews, we
selected the title, abstract, and keywords as the paper areas to execute
the search (e.g., Mora Cortez, Gilliland, & Johnston, 2019). The search
used leading electronic databases (like Watson, Wilson, Smart, & Mac­
donald, 2018): EBSCO, ABI/INFORM, ProQuest, Scopus, and Google
Scholar. We cross-checked the search using the journals’ website search
mechanisms and its timeframe was open but limited to the moment
when writing began on the manuscript (i.e., early 2020). The papers
were deemed published if they were at least available online. This
procedure generated a total of 74 marketing articles and 139 SCM ar­
ticles that were retained in an Endnote file. We extracted their biblio­
metric details into Excel.
The third step is articles selection. This stage involves two experienced
researchers (an author and a senior marketing scholar) independently
examining all 213 articles to carefully screen them with the purpose of
detecting the centrality of “ORAs.” The coders, by reading the whole
paper, assessed qualitatively whether reverse auctions were a central
element. Centrality refers to the extent to which the domain (i.e., ORA)
plays a key role in the argumentation throughout the text (Pedersen
et al., 2020). The coders evaluated the centrality using a screening
metric (like Watson et al., 2018), assigning 0 (not at all), 1 (medium), or
2 (totally) points in this evaluation. An article with a score ≥ 2 (by
adding both coders’ scores) was retained. The inter-rater reliability
analysis was assessed with the proportional reduction of loss method,
reaching an excellent level of 0.94 (Rust & Cooil, 1994). The result was
24 marketing and 50 SCM articles for review (see Web Appendices A and
B) as the final sample for analysis. This set of articles was retained in an
Endnote file.
The fourth (final) step is articles analysis. It involves developing a
protocol for coding and summarizing the articles and developing an
integrative framework to advance ORA research. We created an Excel
document to code (1) the purpose of the study, (2) main perspective(s)
analyzed (i.e., buyer, seller, market-maker), (3) how the paper relates to
reverse auctions, (4) paper categorization (i.e., conceptual, analytical,
qualitative, quantitative), (5) argumentation approach (i.e., single the­
ory, multiple theories, atheoretical), and (6) key findings. One senior
marketing scholar coded a randomly selected sample of five articles
using the initial protocol. The reviewer suggested the inclusion of more
details based on: (1) sector (i.e., private vs. public actors), (2)
geographical scope (i.e., local vs. international), and (3) data analysis
approach for empirical papers (e.g., regression, correlation, analysis of
variance [ANOVA], descriptive statistics). To ensure the trustworthiness
of the revised protocol, a marketing researcher reviewed 10 randomly
selected articles. The expert indicated high validity of the protocol. We
also discussed the protocol with 15 managers in both sales/marketing
and procurement. Overall, the researcher and managers agree with the
final proposed protocol.
Three experienced marketing researchers coded each of the 74
selected articles. Any difference in the coding was solved through dis­
cussion. To enhance the trustworthiness of the coding, two independent
B2B marketing scholars from an R1 US university in the Carnegie
Classification of Institutions of Higher Education coded the raw data of
eight randomly selected articles, reaching a satisfactory inter-rater
reliability (proportional reduction of loss method) of 0.80 (Rust &
Cooil, 1994). The coding outcomes were similar, with just minor dif­
ferences in the writing style (e.g., word selection). The final coding
scheme supports the validity and reliability of our findings. The result­
ing integrative framework followed an inductive content analysis
approach (e.g., see Watson et al., 2018). This procedure entailed a dy­
namic iteration between the raw data and the emerging framework. In
other words, the articles shape the framework, which, in turn, shapes the
comprehension of the articles. The proposed framework both synthe­
sizes literature and organizes the concepts consistently (Watson et al.,
2018). Finally, we conducted qualitative interviews to assess the
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Industrial Marketing Management 115 (2023) 439–454
findings validity by contrasting our emerging model to successful ORA
applications (see Web Appendix E).
3. Findings: Descriptive analysis
3.1. Marketing gap and publications over time
As usual for systematic literature reviews, we provide descriptive
statistics (e.g., Morgan et al., 2019), which contribute to identifying
future research opportunities. Fig. 1 shows an evident downward slope
for both marketing and SCM publications on ORAs, contradicting the
growing interest in ORAs by practitioners (Forde, 2019). In addition,
there is a significant difference in the number of publications in the
2002–2020 period between SCM and marketing (t = 2.24, df = 34, p <
0.05). The marketing field has published significantly fewer articles than
the SCM field, providing initial evidence to the idea of SCM managers
being better prepared to deal with ORAs than business managers. This
gap in the number of publications has grown over time (see Web Ap­
pendix C), which is alarming because the benefits to suppliers are less
obvious than to buyers (Tassabehji, Taylor, Beach, & Wood, 2006) and
calls for more marketing-oriented research.
Following Kienzler and Kowalkowski (2017), we classified the arti­
cles in the final sample into three balanced time periods: 2002–07,
2008–13, 2014–20, allowing a more concise analysis. As shown in
Table 1, IMM (37.5%) and JM (12.5%), which account for 50% of the
total publications, are the main outlets for ORA research. Then, MS and
JMR (as top-tier journals), JBR (as reputable journal), and JBIM (as B2B
journal) account for 33.3% of the publications. B2B journals represent
54.2%, top-tier journals 33.3%, and reputable journals 12.5% of the
total publications, respectively. Regarding time periods, 2002–07 is the
most productive period (62.5%), followed by 2008–13 (20.8%), and
last, 2014–20 (16.7%; see Table 1). It seems that marketing scholars are
abandoning ORA research, possibly because of the lack of clarity on how
to conduct research on ORAs. Hence, the directions for further research
delivered in this article are valuable for academics to advance ORA
research. The following domain-based findings section can motivate
scholars to design research endeavors on ORAs, even if this topic falls
outside their area of specialization (Palmatier et al., 2018).
3.2. Article focus
We assessed whether the marketing papers related to one or more
specific stages of a reverse auction (i.e., pre-auction, during-auction,
post-auction) or ORAs were analyzed in general (e.g., comparing them
with other purchasing approaches, describing the approach’s general
nuances). The most identified article focus is general with 11 papers,
indicating that 45.8% of the sample is relatively favoring breadth over
depth. This should be deemed a latent research opportunity for mar­
keting scholars. Regarding the articles that focus on one or more stages,
the most common phase is post-auction with 10 papers discussing it alone
or accompanied by another stage, while pre-auction and during-auction
are only covered by five papers each. Because some articles focused on
more than one stage, the most common combination is pre- and post-
auction with four papers. It is important to highlight that none of the
marketing articles focuses on the three stages simultaneously with a
minimal degree of depth. Conversely, SCM literature has been able to be
(relatively) more integrative in its analysis (see Carter & Stevens, 2007;
Tassabehji et al., 2006). Overall, researchers have been interested in the
results obtained by running an ORA, with marked emphasis on buyer’s
transaction savings.
In addition, a non-parametric analysis assessed the relationship be­
tween article focus, CABS journal ranking (coding 2, 3, 4, and 4* levels)
and time period. Based on Spearman’s correlation, marketing research
covering more stages of an ORA is significantly more likely (r = 0.403, n
= 24, p < 0.1) to appear in higher ranked journals than those focusing on
a single stage or general issues. Also, articles focusing on the pre-auction
R. Mora Cortez et al.
Fig. 1. ORA publication trends in marketing and SCM.
stage are less likely (r = − 0.387, n = 24, p < 0.1) to be more recent in
terms of publication year. Overall, marketing literature is missing dur­
ing-auction articles that explore this stage thoroughly or connect the
stage with pre- and/or post-auction factors.
3.3. Type of research
We classified the type of research into (1) analytical, (2) conceptual,
(3) qualitative, and (4) quantitative (Morgan et al., 2019). Most of the
marketing articles are quantitative (eight) or conceptual (eight), ac­
counting for 66.7% of the final sample. The quantitative studies use
empirical data in the form of descriptive statistics, econometric models,
structural equation models, and experiments. The conceptual studies
mainly describe the ORA approach as a purchasing tool or discuss its
introduction to the marketing field. Qualitative (four) and analytical
(four) studies are less represented in the review (33.3% of the final
sample). The qualitative studies are conducted via in-depth interviews
and case studies. The analytical studies entail complex mathematical
models based on optimization techniques, commonly tested with
instrumental cases or small-sample experiments.
In addition, a cross-tabulation analysis of the type of research design
in marketing articles and the three time periods indicates a significant
association between the factors (Likelihood ratio = 10.73, df = 6, p <
0.1). Notably, the different tendencies are (1) conceptual research
moving from seven articles in 2002–07 through one in 2008–13 to zero
in 2014–20; (2) analytical research represented by three articles in
2002–07, one in 2008–13, and zero in 2014–20; (3) quantitative
research accounting for three articles in 2002–07, three in 2008–13, and
two in 2014–20; and (4) qualitative research represented by two, zero,
and two articles, respectively. In short, the dominance of quantitative
and conceptual studies suggests that marketing scholars have prioritized
concerns about generalization issues4 rather than the richness of
contextual scenarios when running an ORA.
4
Quantitative studies usually generalize on specific themes, while conceptual
studies provide broader overviews. We thank an anonymous reviewer for this
clarification.
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Industrial Marketing Management 115 (2023) 439–454
Similarly, the select SCM literature shows that most studies are
quantitative (52%), but in second place are analytical studies (36%).
Then, qualitative studies represent 10% of the sample, and finally con­
ceptual studies only represent 2% (see Web Appendix C). SCM re­
searchers seem to prefer analytical approaches versus conceptual
approaches, which indicates an inclination to communicate via mathe­
matical expressions instead of argue using words. The trends by period
for SCM literature are clearly downward for all approaches, except for
analytical manuscripts (see Web Appendix C).5
4. Findings: domain-based analysis
Fig. 3 depicts the framework for our analysis, following a time-based
process. The model builds on the systematic literature review and rep­
resents considerations managers should account for when thinking of
and after deciding on participating in an ORA. The discussion of the
emerging findings follows this framework. The model consists of three
layers (conceptualization, ORA as a process, and research setting). The
main feature is the three-stage process, which involves a step-by-step
view on ORAs, arising from the 2002–2020 reviewed marketing and
SCM literature. We attempt to discuss the three focal actors’ views, but
the market-maker perspective is almost inexistent (see a summary of the
domain-based findings in Web Appendix F).
First, firms are called to conceptualize reverse auctions, which involves
grasping (1) a clear definition of the ORA concept (general idea, origin,
and main tenets) and (2) a thorough understanding of the main actors
and their roles (buyer, sellers, and market-maker). Once that is done,
sellers can be actively or passively implicated in the pre-auction stage, (1)
constructing expectations and rationales for participation, (2) making
market decisions, and (3) establishing process control. Then, if sellers
decide to participate in an ORA, firms are influenced by the (1) risks and
uncertainty, (2) emotions, and (3) behaviors in the during-auction stage.
All these elements can pertain to the focal firm or other stakeholders in
the ORA system. Finally, in the post-auction stage (1) supplier(s) can be
5
We also examined the theoretical foundation of marketing and SCM liter­
ature (see Web Appendix D).
R. Mora Cortez et al.
Fig. 2. Review process.
selected, and (2) offering (i.e., product/service) quality, (3) relationship
quality, and (4) economic performance can be assessed. This whole
reverse auction system is influenced by (1) sector (public vs. private)
and (2) geographical scope (local vs. international).
4.1. Conceptualization of online reverse auctions (ORAs)
4.1.1. Definition: general idea, origin, and main tenets
An auction is defined as “a market institution with an explicit set of rules
determining resource allocation and prices on the basis of bids from market
participants” (Jap, 2002, p. 507). The reverse factor implies that the
company holding the auction is the buyer and the companies that bid are
the sellers (Sashi & O’Leary, 2002). This auction format is commonly
known as the Dutch auction and opposes the most traditional forward
format (i.e., English auction) where buyers bid, and the seller’s goal is to
push the price up (Jap, 2002). The overarching goal of reverse auctions
is to push the price down (Jap, 2007; Sambhara et al., 2017). The online
feature involves bringing buyer and sellers together via the internet or
through a private network (e.g., Smeltzer & Carr, 2003), commonly
managed by a third party (Grewal, Chakravarty, & Saini, 2010). Hence,
we define an online reverse auction (ORA) as a real-time, dynamic market
institution based on an online platform where a buyer allows bids from
multiple sellers (Grewal et al., 2010; Jap, 2002, 2003; Sambhara et al.,
2017).
The origin of online reverse auctions is attributed in the literature to
General Electric (GE) as a tool to help expand its markets (Emiliani,
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Industrial Marketing Management 115 (2023) 439–454
2005). In 1995 one of GE’s employees recognized the new e-marketplace
as an emerging concept to drive a new business model for B2B firms and
left GE to found Freemarkets.com (Sashi & O’Leary, 2002), which was
acquired by Ariba in 2004. Freemarkets.com developed proprietary
software and managed to convince some of the largest firms in the US,
such as General Motors, Westinghouse, Procter & Gamble, United
Technology Corp., and Whirlpool, to adopt this new e-marketplace
(Emiliani, 2000; Muylle & Standaert, 2016). Over time ORAs have been
implemented in several industries, including aerospace, automotive,
communications, consumer products, mining, pharmaceutical, tech­
nology, government, and military (Jap, 2003; Mora Cortez & Johnston,
2020). The companies that provide ORA services are also known as
“market-makers” (Emiliani, 2004).
Studies in the marketing literature often discuss the main tenets
related to conducting and participating in an ORA. The most mentioned
tenet is the technology involved. Schrader, Schrader, and Eller (2004), for
example, emphasize that implementing a reverse auction site implies a
variety of resources ranging from outsourcing all functions to a market-
maker, through purchasing off-the-shelf auction software, to developing
a fully in-house programmed website. Similarly, Jap (2002) suggests
that the technology behind an auction format is not complex and,
consequently, has led to many firms offering an ORA as part of their
sourcing solutions or software. Also, Sashi and O’Leary (2002) noted
that ORAs depend on the internet. In this vein, Grewal et al. (2010) state
how challenging ORA governance is because of the lack of tangibility
and visibility of a physical infrastructure. The second tenet is information
R. Mora Cortez et al. Industrial Marketing Management 115 (2023) 439–454

Fig. 3. Overview of online reverse auctions.

tool with other approaches. For example, Pinker, Seidmann, and Vakrat
Table 1 (2003) offer a classification matrix to contrast bilateral negotiations,
Marketing sample overview by journal and period*.
web-based sales auctions, web-based exchanges, and web-based reverse
Journal Group 2002–07 2008–13 2014–20 Total Total auctions. In this vein, Cullen and Webster (2007) suggest sorting selling/
(n) (%)
purchasing mechanisms by the number of buyers and suppliers, with the
IMM B2B 9 0 0 9 37.5% ORA representing a scenario with one buyer and several (all) suppliers
JBIM B2B 0 0 2 2 8.3% (p. 210). Hence, future marketing research could better understand the
JBBM B2B 1 0 0 1 4.2%
JBMM B2B 1 0 0 1 4.2%
nature of reverse auctions by exploring likeness and unlikeness in both
JBR Reputable 0 1 1 2 8.3% offline and online selling/purchasing mechanisms.
PM Reputable 0 0 1 1 4.2%
JAMS Top-tier 1 0 0 1 4.2% 4.1.2. Actors: buyer, seller, and market-maker
MS Top-tier 1 1 0 2 8.3%
ORAs comprise three groups of actors: (1) buyer, (2) sellers, and (3)
JMR Top-tier 0 2 0 2 8.3%
JM Top-tier 2 1 0 3 12.5% market-makers. Even though buyers could also be market-makers by
Total 15 5 4 24 100% developing their own systems, the marketing literature considers
* (empirically) market-makers as a third party (different from the buyer).
Missing journals did not publish a single article on ORAs.
There are distinct approaches in terms of goals, behaviors, and outcomes
for each of these actors. Table 2 reports the distribution of articles
disequilibrium. Although the level of information disequilibrium depends
among ORA actors. 37.5% of the articles studied the buyer, 12.5% the
on the auction format, several studies acknowledge this imbalance as
seller, while only 8.3% the market-maker. The remaining 41.7% studied
always present. This represents a key challenge for suppliers and a
multiple actors via both a dyadic buyer-seller view (33.33%) and a
potentially beneficial feature for buyers (e.g., Jap, 2007). In an ORA, the
triadic ORA view (8.33%). The papers studying the whole ORA system
buyer is controlling what type of information is available to suppliers.
focus on a general description and guidelines for conduct, with both
Grewal et al. (2010) indicate that anonymity among supply-side par­
studies published in the initial period (i.e., 2002–07 period). No
ticipants can leverage price concessions. Likewise, Schrader et al. (2004)
empirical study has dealt with all actors simultaneously.
argue that a buyer can use the lack of information managed by suppliers
The buyer has the role of initiating the auction process by contacting
to obtain supranormal returns. The third tenet is dynamic pricing. A basic
a market-maker to design the ORA or by accepting a market-maker
idea in ORAs with multiple suppliers is the possibility to respond to
competitor prices (e.g., Engelbrecht-Wiggans, Haruvy, & Katok, 2007).
Hence, dynamic pricing “simply means that the price for the item being Table 2
Online reverse auction (ORA) researched actors in marketing.
auctioned changes on an instantaneous basis because of the electronic
format” (Smeltzer & Carr, 2003, p. 482). Commonly, the price decreases 2002–07 2008–13 2014–20 Total (n) Total (%)
until a low bid is reached and there are no more offers in a pre-specified Buyer 8 0 1 9 37.50%
time window (Sashi & O’Leary, 2002). Seller 1 1 1 3 12.50%
The SCM literature characterizes ORAs similarly to marketing (e.g., Market-maker 0 1 1 2 8.33%
Dyadic 4 3 1 8 33.33%
Smart & Harrison, 2003), but places more emphasis on comparing the
Triadic 2 0 0 2 8.33%

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R. Mora Cortez et al.
proposal to work during a specific time period (Daly & Nath, 2005a;
Dixit, Whipple, Zinkhan, & Gailey, 2008). The marketing literature has
explored the buyer role as one-sided (i.e., one buyer), but hypothetically
an ORA could be expanded to multiple buyers. The ORA process typi­
cally begins with the buyer posting a request for quote (RFQ) to a
website or sending the information directly via email to specific sup­
pliers (Jap, 2003). The seller role is usually activated after receiving
notice from the buyer about launching an ORA. Sellers are persuaded to
participate in an ORA since the possibility to gain business depends on it.
Emiliani (2005) notes that sellers characterize ORAs as an unfair bidding
process used by firms as a substitute for poor purchasing practices. The
market-maker role is played by several firms such as Ariba, A.T. Kear­
ney, EASiBuy, eBridge, EMEX, Oracle, and Proactis (Mora Cortez &
Johnston, 2020). These market-makers assist the buyer in creating a
detailed RFQ to facilitate price estimating and online bidding (Emiliani,
2004). They also provide technical support during the auction and are
responsible for the ORA working satisfactorily (Standing & Standing,
2015). Undoubtedly, marketing research needs to pay more attention to
market-makers since they provide a B2B service.
The SCM literature identifies the same actors when characterizing an
ORA. Nevertheless, the focus on both sellers and buyer is much greater
than in the marketing literature, with two papers discussing the market-
maker or its characteristics. For example, Karabağ and Tan (2019)
investigate the impact of reverse auction platform ownership on the
procurement prices. They proposed that price diminishing is higher for
auctions conducted through a market-maker auction provider than
through a private (buyer-owned) platform, though no significant effect
was found. Overall, the market-maker is a “black-box” in both SCM and
marketing literature.
4.2. Pre-auction
4.2.1. Expectations and rationales for participation
There are expectations and reasons ruling why buyers and sellers
decide to participate in ORAs. In general, the buyer expects net gains in
the form of reduced purchase prices, administrative costs, and inventory
levels at the cost of potentially eroding the incumbent selling firms’
profit (Emiliani & Stec, 2005; Jap, 2003; Schrader et al., 2004). The
most compelling argument for buyers is the likelihood of reducing tag
prices by 5–15% (Jap, 2002; Smeltzer & Carr, 2003). All expected
benefits are emphasized by the market-maker in its communication with
buyers and represent the core of its value proposition. For
market-makers, an ORA is simply a service to be sold. Extant literature is
silent about how market-makers develop expectations on market
penetration.
Furthermore, ORAs are also regarded as bringing some advantages to
selling firms like increased business and information about the market,
more market penetration, reduced time in the bidding process, less
paperwork, and improved inventory management (Smeltzer & Carr,
2003). Moreover, bidders other than well-known suppliers could initiate
a relationship with out-of-sight buyers (Haruvy & Jap, 2012). However,
suppliers (especially the incumbent one) perceive reverse auctions as an
aggressive purchasing tool designed to drive down unit prices without
adequate consideration of other relevant elements of performance or
production capability (Emiliani, 2004; Schrader et al., 2004).
SCM literature also discusses the nature of ORAs as part of a
“competitive” instead of a “collaborative” purchasing strategy (e.g.,
Smart & Harrison, 2003). Moreover, SCM studies raise ethical consid­
erations about ORAs. For example, Hartley, Lane, and Duplaga (2006)
argue that sharing suppliers’ confidential information (e.g., prices) is
unethical and can lead to a distorted “bidding-war.” Further marketing
research could explore whether suppliers perceive ORAs as unethical
versus simply a cost-oriented behavior and how this perception may
influence participation. Scholars should also investigate how buyers can
present ORAs as part of a collaborative strategy.
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Industrial Marketing Management 115 (2023) 439–454
4.2.2. Market decisions
An important market decision for buyers is to clearly define how an
ORA relates to the firm’s sourcing strategy (Úbeda, Alsua, & Carrasco,
2015). Jap (2002) states that the number of sourcing strategies depends
on the ultimate goals of a firm, and, consequently, an ORA can be used as
a single sourcing approach or as one that accompanies other approaches.
Moreover, Smeltzer and Carr (2003) stress that reverse auctions should
be considered a tool within the strategic sourcing process (p. 486),
which involves managers having a comprehensive market knowledge
and technical understanding to develop total cost models. Jap (2002)
suggests that the goal of a strategic sourcing process is to reduce the total
cost of ownership of serving every specific need. The literature posits
ORAs as being used more as a price (reducing) tool than as an approach
for strategic sourcing (or process improvement; Schrader et al., 2004;
Agndal, Axelsson, Lindberg, & Nordin, 2007). This is consistent with the
suppliers’ view on ORAs. It would be interesting to have more knowl­
edge on how different buying center members face this dilemma, which
is currently unavailable in extant marketing literature.
Another important decision for the buyer is to select the offering to
be reverse auctioned. The literature agrees on identifying commodities
(i.e., homogeneous offerings for which the purchase price constitutes the
largest component of value) as the most appealing type of offering (e.g.,
Schrader et al., 2004). Jap (2002) notes that when products are com­
moditized, the capabilities of ORAs enable unprecedented temporal and
geographical conveniences for both buyer and supplier. In this vein,
Sashi and O’Leary (2002) point toward maintenance, repair, and oper­
ating (MRO) items that are largely homogenous being adequate candi­
dates to be reverse auctioned. Agndal et al. (2007) stress that services in
general are difficult to specify and price, probably making reverse
auctions primarily relevant for highly standardized services with high
total value (p. 195). However, branded goods and non-standardized
services are also purchased via reverse auctions (Emiliani, 2005).
From the suppliers’ perspective, there is a risk of disassociating a
product from its brand in the reverse auction environment (e.g.,
Schrader et al., 2004). Hence, managers should consider buying or
setting up a subsidiary if incremental sales are relevant for a vendor to
participate in an auction (Schrader et al., 2004). Regarding the market-
maker, the literature is silent on its guidance for offering selection.
Furthermore, a key buyer decision is how to conduct suppliers’ pre-
qualification (Haruvy & Jap, 2013). Jap (2002) indicates that buyers
should consider only suppliers that have been pre-qualified and can
fulfill the purchase contract. Otherwise, the buyer risks generating
meaningless bids and the possibility of nonqualified suppliers placing
undue price pressure on the qualified suppliers (Jap, 2002). Interest­
ingly, Schrader et al. (2004) note that buyers can purposely invite
suppliers to an auction who are not prequalified to provoke a disequi­
librium situation. Sashi and O’Leary (2002) state that the prequalifying
activity can be delegated to an internal department or outsourced to a
third party. The prequalifying process is labor-intensive and costly,
forcing the auction result to exceed this cost to make it worthwhile
(Sashi & O’Leary, 2002). Prequalification includes, but is not limited to,
manufacturing tolerance capabilities, volume capabilities, financial ca­
pabilities, and certifications such as ISO 9000 (Schrader et al., 2004, p.
71). Extant marketing literature does not offer detailed discussion on
when or how a prequalified supplier may decide not to participate in an
ORA, nor the consequences of this.
SCM literature also considers supplier qualification a key aspect.
Buyers who conduct thorough supplier evaluations before the auction
are more likely to achieve successful auction outcomes (Scott, 2018;
Wan & Beil, 2009). Moreover, SCM research proposes two comple­
mentary topics to extant marketing knowledge. On one hand, market
decisions on the a priori number of winners are thoroughly scrutinized.
Wang, Feng, Jiang, and Xie (2019) show that increasing the number of
winners encourages experienced suppliers but discourages inexperi­
enced suppliers from participating in an auction. In this vein, Cha­
turvedi, Katok, and Beil (2019) indicate that when the cost distribution
R. Mora Cortez et al.
of suppliers is regular (e.g., normal), the most cost-efficient split hap­
pens with the buyer allocating the maximum possible business sequen­
tially, starting from the lowest-bidding supplier and moving toward
higher bidding. On the other hand, market decisions on sourcing mul­
tiple components associated with an end-product are not trivial. For
example, Jiang (2015) notes that, compared with simultaneously
auctioning the components, a sequential auctioning process can improve
the profit for the buyer and all suppliers. Hence, future ORA marketing
research could explore situations where related offerings need to be
auctioned (e.g., testing simultaneous vs. sequential auctions) and mul­
tiple winners can be assigned.
4.2.3. Process control
Buyers establish a series of definitions in the platform configuration
to control the running of an ORA (Haruvy & Jap, 2013). Daly and Nath
(2005b) note that an important element is the event/lot size, proposing
that price is a decreasing function of lot size. Similarly, Jap (2007) in­
dicates that the larger the contract value, the greater a supplier moti­
vation to participate in an ORA. Several lots can be set up for
independent bidding before a reverse auction. The offering lot is a
grouping of items typically organized according to the suppliers’ capa­
bilities to bid on or produce each lot (Jap, 2007, p. 150). A lot can
include a combination of more homogeneous/heterogeneous offering
types and, while the number of lots increases, the buyer provides more
varied opportunities for suppliers to win a part of the total contract (Daly
& Nath, 2005a; Jap, 2007). Another factor is the price visibility (i.e., the
extent to which suppliers can see competing bids). Extant literature
suggests that full price visibility is risky; thus, buyers have implemented
a partial price visibility format, in which suppliers are not told the actual
price levels but are informed about their relative rank or the lowest bid
price in real time (Jap, 2007, p. 150). Furthermore, the marketing
literature also contrasts the consequences of sealed-bidding (only the
buyer has access to a bid using an asynchronous process) versus open-
bidding (all suppliers and the buyer view the bids at the same time).
For instance, opportunism suspicions do not change in sealed-bid but
increase in open-bid auctions, while no difference in buyer savings or
supplier willingness to make investments occur because of the auction
types (Charki, Josserand, & Charki, 2011; Jap, 2003).
Another nuance in the auction format is the time selection and
auction run time. The former is relevant due to potential participants
being anywhere in the world (Schrader et al., 2004). The latter is more
controversial and can be managed using a fixed time (i.e., hard close;
generally, one or two hours) or continuing past the deadline as long
there is bidding activity (i.e., soft close; Daly & Nath, 2005b; Jap, 2002).
The soft close involves setting up an elapsed time (to respond to rivals),
commonly ranging from one to five minutes (Mora Cortez & Johnston,
2020; Schrader et al., 2004). The literature also stresses defining a large
enough decrement (i.e., minimum reduction in bid) to run the ORA
efficiently. Schrader et al. (2004) tell a story from GE in which a novice
buyer allegedly set a $100 decrement on a $2 million auction, requiring
about 17 hours to close the event.
The literature also points toward reviewing more general conditions
in the market and drawing codes of conduct to ensure a successful ORA
deployment and outcome (Muylle & Standaert, 2016). Smeltzer and
Carr (2003) state that appropriate market conditions must exist. The
supply market should be somewhat fragmented to increase the number
of potential bids, but more importantly excess supply capacity in the form
of economies of scale is needed so that suppliers are motivated to pursue
extra business, and supply market price elasticity is required to drive prices
downward by an increase of demand (Jap, 2007; Smeltzer & Carr,
2003). Moreover, Emiliani (2005) suggests “guidelines for conduct” for
developing an ORA where buyers and sellers can participate in a fair and
equitable electronic procurement auctioning process (p. 529). These
documents are typically one to five pages and summarize the expected
behaviors of market-makers, buyers, and sellers related to: (1) trans­
parency of bidders, (2) acceptance criteria, (3) specifying
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product/services, (4) terms and conditions, (5) security and confiden­
tiality, (6) supervision, and (7) auditing (Emiliani, 2005). The very fact
that codes of conduct and guidelines are in place indicates that ORAs
suffer from many serious shortcomings in practice (Muylle & Standaert,
2016; Úbeda et al., 2015). Further research could reunite most
market-makers to develop a standard code of conduct for all ORA
stakeholders.
SCM literature empirically discusses additional process control topics
associated with (1) price acceptance and (2) information availability on
quality. On one hand, scholars found mixed results regarding what pre-
defined bidding price optimizes the cost savings for the buyer. While
Aloysius, Deck, Hao, and French (2016) find that first-price (i.e., lowest)
auctions generate lower prices (in comparison with second-price auc­
tions) regardless of market composition, Chang, Chen, and Salmon
(2015) find the average bid mechanism to be more successful when
accounting for the winner’s curse (i.e., seller underestimating the cost to
serve and failing to comply). On the other hand, setting up whether to
share information on offering/supplier quality during an auction is an
emerging idea. For example, Haruvy and Katok (2013) indicate that an
open-bid format is highly sensitive to quality transparency, generating
significantly lower buyer surplus levels when the information about
bidder quality is public. Hence, future marketing research could explore
situations with multiple price acceptance points (e.g., first, second, and
middle) and different levels of quality information (e.g., offering, peo­
ple, and brand).
4.3. During-auction
4.3.1. Risks and uncertainty
The marketing literature describes several risks and uncertainties
when conducting and participating in an ORA. First, Jap (2003) stresses
that a perceived lack of transparency about an ORA leads suppliers to be
suspicious about the buyer being opportunistic (i.e., self-interest-seeking
with guile). If a supplier participates in an ORA under the strong sus­
picion of opportunism, there is a huge risk of misconducting or sub­
stantially limiting its participation. Daly and Nath (2005a) indicate that
procedural fairness (i.e., fairness of the procedures through which de­
cisions are made or rules applied) is key during the auction and can be
demonstrated when explicit efforts are made to communicate during
auction implementation. Even if rules were sent prior to auction
execution, a very clear explanation of the norms and conditions and a
context for the need to conduct an ORA at the beginning of the bidding
can help sellers to diminish their perception of opportunistic buyer
behavior.
Second, Grewal et al. (2010) discuss the behavioral uncertainty of
market participants during an ORA due to dynamic pricing. These au­
thors argue that the reputation of the market-maker should help to
“retain the trust” of buyer and sellers and “sustain the electronic market’s
performance” (p. 47). Another problematic scenario derives from the
sellers inferring that a reverse auction is simply a negotiation ploy. In
other words, the buyer may be trying to get an existing supplier to lower
its price and not award business to the suppliers participating in the bid
process (Smeltzer & Carr, 2003, p. 487). If this assumption is not true,
buyers can benefit from working on ORAs with highly reputable
market-makers. In addition, for buyers, there is a risk associated with
lack of dynamism in the bidding price. Even if the pre-qualification of
suppliers is conducted correctly, not necessarily all of them will
participate in the ORA. Kauffman and Leszczyc (2005) indicate that the
right auction dynamism in one-time purchase situations requires about
nine sellers and a repeat purchase situation requires about 12 sellers. In
this vein, Smeltzer and Carr (2003) note that at least four or five sellers
are needed to begin the bid process.
Third, Dixit et al. (2008) state that many sellers suffer a disadvantage
during their first auctions since they often fail to develop a well-thought-
out strategy. Inexperienced suppliers could display their best price at the
beginning of the auction or fail to establish their lowest possible price.
R. Mora Cortez et al.
Overall, inexpert suppliers negatively affect the running of an ORA;
experience provides maturity to all participants (Standing & Standing,
2015). However, not only beginners may behave erratically; if a pre-
designed strategy is not followed in detail, there is a risk of over-
bidding only to discover “when trying to fulfill the contract that they did
not take into account unforeseen events like bad weather, union strikes, or
transportation problems” (Sashi & O’Leary, 2002, p. 106). Sellers should
stick to a pricing strategy during the entire ORA and hold internal
alignment in the auction team to prevent non-rational biases (e.g., Dixit
et al., 2008; Haruvy & Jap, 2013; Mora Cortez & Johnston, 2020).
Interestingly, SCM literature has additionally studied the idea of
suppliers’ collusion during a reverse auction, which, in the marketing
literature, is merely noted as a potential factor to be discussed in future
research (cf. Schrader et al., 2004). In this vein, Fugger, Katok, and
Wambach (2016) analyze the possibility of suppliers winning at high
prices. They found that collusion at high prices becomes less likely if the
number of bidders increases, if reserve prices decrease, and if uncer­
tainty about the decision criteria decreases. Thus, future marketing
research could investigate what suppliers’ ex ante characteristics and
beliefs lead them to consider the option of collusion during an ORA.
4.3.2. Emotions
The ORA dynamics can trigger emotional distress among supplier
managers. For example, Jap (2003) describes a case study where “the
managing director became caught up in the auction dynamic as he did not
want to lose to other bidders” (p. 151) and, by the end of the auction, the
supplier’s lowest bid had crossed the pre-established minimum price,
potentially resigning 7% of net profit. Jap (2003) also indicates that this
manager took about two weeks to get over losing the business. This
scenario demonstrates how ORA dynamics can distress and demotivate
sellers at an emotional level. Indeed, Mora Cortez and Johnston (2020)
show that the auction experience is psychologically overwhelming and
requires emotional intelligence to nurture effective control during the
event. In addition, marketing ORA research points out that the excite­
ment of the reverse auction can foster the supplier to offer an unrealistic
price to the buyer and later lose business by trying to back out of the
agreement (e.g., Smeltzer & Carr, 2003; Sashi & O’Leary, 2002). The
literature also acknowledges that the emotional frustration can be
deeper for high quality suppliers since they need to deal with discontent
during the auction due to the unaccounted value in the bidding (e.g.,
Mora Cortez & Johnston, 2020).
SCM literature on emotions is scarce but complements marketing
studies. For example, Ding, Eliashberg, Huber, and Saini (2005) show
that emotions are an integral component of a bidder’s decision state and
bidding strategy during a six-session ORA. The authors validate the
excitement emotion of winning and the frustration emotion of losing,
and that such emotions change dynamically as a function of the outcome
of the previous bid. Further marketing research could track the emotions
of buying center members and explore their consequences during a real-
setting reverse auction.
4.3.3. Behaviors
Literature on what happens during the auction is limited in the
reviewed marketing research. As usual, the marketing scholars have
focused primarily on the supply-side of the system (i.e., neglecting the
behaviors of both buyer and market-maker). However, Jap and Haruvy
(2008) stress that “the theory of how and why bidders bid as they do is still
emerging” (p. 551). These authors also claim that extant research is
missing a connection between how bidder behaviors are related to in­
ternal (seller) or context events outside the auction. Mora Cortez and
Johnston (2020) indicate that sellers’ organizational dynamics during
the auction have not been studied, but they offer initial support to the
importance of achieving unity among the diverse individuals partici­
pating in an ORA and argue in favor of the inputted numbers to the
auction system representing the overall agreement in the seller auction
team. If all participants are responsible for the actual decisions during the
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ORA, there are fewer chances of pointing a finger at someone (Mora
Cortez & Johnston, 2020).
On the bright side, marketing literature has explored some key be­
haviors during a reverse auction such as (1) total number of bids sub­
mitted, (2) speed of response, and (3) level of price concessions. All these
variables can be considered measures of bidder aggressiveness. For
example, Jap and Haruvy (2008) found that sellers willing to make
specific investments (i.e., adaptations representing a credible sign of a
supplier’s commitment to the buyer) bid less aggressively, which is also
true of sellers with a high relationship propensity (i.e., propensity for
developing a relationship with the buyer). Similarly, Haruvy and Jap
(2013) identified that high quality (in terms of product and service)
bidders react more aggressively to non-aggressive bids than to aggres­
sive bids. Furthermore, higher quality bidders perform less frequent bids
and show a divergent behavior from lower quality bidders. The behavior
of higher quality sellers is typically represented by 38.5% of their bid
during the first quintile of time, 27.7% spread evenly over the next three
quintiles, and 33.5% of their bids in the last quintile (Haruvy & Jap,
2013). Moreover, the incumbents show a less aggressive competitive
response compared with non-incumbents, consistent with the idea of
incumbents being of higher quality. Overall, these results indicate that
bidders take into consideration the way they would prefer to conduct
business, perceptions about their relative quality, and the effect on their
ability to learn from other sellers’ behavior during an auction.
Surprisingly, SCM literature is almost barren regarding behaviors of
the actors during a reverse auction. However, two ideas are discussed in
this arena: (1) negotiation and (2) relationship governance. On one
hand, Kaufmann and Carter (2004) are critical about the negotiating
possibilities of reverse auctions. Particularly, they state that during an
ORA the buyer-seller interaction is rather impersonal and strictly fact-
based, leaving almost no room for personal interventions. On the
other hand, Pearcy, Giunipero, and Wilson (2007) suggest that a rela­
tional governance structure between buyer and seller during an auction
provokes a less aggressive bidding. Overall, future marketing research
could investigate opportunities (if any) for increasing actors’ interaction
during an auction.
4.4. Post-auction
4.4.1. Supplier selection
A very interesting stream in ORA literature is that related to doing
the math; that is, once the auction has finished. The first tenet in the
post-auction analysis is supplier selection. All actors should reflect in
advance on the different scenarios that can surface. Emiliani and Stec
(2005) note that for the buyer, the most pressing matter is to implement
the reverse auction results. The literature acknowledges the supplier se­
lection task as highly difficult, and its complexity emerges from the
buyers’ decision to not necessarily assign the business to the lowest bid
(e.g., Jap & Haruvy, 2008). Of course, when the buyer decision is to
“reciprocate” with the lowest bid supplier by assigning the business, the
supplier selection becomes a trivial action (Eng, 2004). Extant research
suggests selecting the “winner” via the lowest bid approach (in com­
parison with a multi-attribute approach) when the number of bidders is
small and the correlation between cost structures and the quality offered
by bidders is negative or undetermined (e.g., Engelbrecht-Wiggans
et al., 2007).
Although supplier selection (as a buyer action) in the reviewed liter­
ature is scarce and generally not central in the discussion, it represents
the “moment of truth” for the buyer. Further research is needed to
formalize a categorization of the multiple scenarios of supplier selection.
Broadly, extant research ranges from the relationship management in a
scenario of failed reverse auction (Mora Cortez & Johnston, 2020) to the
trade-off between profiting from a contract and the probability of being
selected through a specific price (Jap & Naik, 2008). In reality, the ORA
itself provides an interesting learning opportunity for participants on
both the demand and supply sides. For example, themes such as delivery
R. Mora Cortez et al.
time, quality, and quantity are issues that both buyers and suppliers
should consider to open renegotiation scenarios (Daly & Nath, 2005b).
In such renegotiation scenarios, Mora Cortez and Johnston (2020)
identify two possible paths: (1) full renegotiation and (2) discrete step-
by-step reconsideration. The former involves not assigning the business
to the lowest bid suppliers, the buyer accepting an ORA as an ineffective
tool (in the specific case), and opening buyer-seller information sharing
to clarify ambiguity and mutual concerns. The latter involves the buyer
assigning the business to the lowest bid suppliers, more often letting go
an experienced, reliable supplier, but gradually returning to interact
with this incumbent supplier (from the prior procurement cycle) and
reestablishing a partial commercial buyer-seller relationship without
further argument. The experience, thus, becomes an important factor for
taking advantage of the outcomes associated to ORAs from a selection
standpoint (for both buyer and suppliers).
SCM literature adds to reverse auctions marketing research on sup­
plier selection by studying (1) post-auction negotiations and (2) learning
about bidders’ marginal costs. On one hand, Shachat and Tan (2015)
show justification (i.e., increased buyer surplus and no seller concerns)
for the practice of engaging in post-auction negotiations when quali­
fying additional suppliers is not feasible. On the other hand, Eckhaus,
Kogan, and Perlman (2013) find that auction data can be used to learn
about the suppliers’ marginal costs. Thus, the buyer can enhance follow-
up negotiations with the supplier by contrasting the model’s estimates of
the marginal costs with the supplier’s inefficiencies. Future marketing
research could investigate different degrees of convergence in the
marginal costs of bidders and conduct an aggressiveness-variant nego­
tiation (i.e., low, medium, and high levels).
4.4.2. Offering quality
The quality of the offering is another key idea in the literature.
Quality refers to the extent to which the supplier specifications for its
offering are adequate to attend the demand of a buyer (Muylle &
Standaert, 2016). Sometimes, the application of ORAs does not satisfy
buyers ex post in terms of quality; then, both buyers and sellers
(particularly those excluded) should be prepared to deploy new strate­
gies, generating an opportunity to recover a theoretically lost customer
(Emiliani, 2005; Jap, 2007). Of course, sellers with high quality prod­
ucts should consider this chance only if renegotiating seems pertinent.
Once the auction has finished, buyers should assess the criteria applied
to select the bidders to anticipate future changes, particularly to make
the operation more attractive for winners (assigned suppliers) and avoid
operational risks (Kauffman & Leszczyc, 2005). Hence, offering quality
becomes a dynamic variable over time (e.g., short- vs. long-term).
The reviewed literature indicates that buyers should revisit the
suppliers’ pre-qualification once the auction is finished, since the market
is evolving and financial ratings and ISO ratings can expire or be
updated (Mora Cortez & Johnston, 2020; Smeltzer & Carr, 2003).
Another complication for buyers emerges from information asymmetry:
the auction winner may not have full information on all aspects of the
job and, therefore, not be able to complete the contract (Sashi &
O’Leary, 2002, p. 107). In addition, as B2B contracts tend to be assigned
for several years (from one to five commonly) and ORAs can be con­
ducted in sequence, there is a latent risk of the assigned supplier
decreasing quality over time, reducing services and technical support, as
well as eliminating idiosyncratic investments, such as R&D (e.g., Jap,
2003). Further, Engelbrecht-Wiggans et al. (2007) suggest embarking on
continuous buyer-seller interaction during offering deployment, if these
relationships can be translated into higher quality offerings.
SCM literature identifies one topic associated with offering quality
that may help in advancing marketing research into ORAs: complex/
incomplete contracts. For example, Fugger, Katok, and Wambach (2019)
note that when the buyer can identify a price that is not the lowest but
represents a compromise, it increases a supplier’s willingness to provide
costly quality that benefits the buyer and is not specified in the contract.
Thus, future marketing research could study the supplier features that
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foster a non-opportunistic behavior (related to quality) with the buyer in
case of an incomplete contract.
4.4.3. Relationship quality
The consequences of ORAs related to buyer-seller relationships is a
topic of interest in B2B marketing literature since Jap (2003) introduced
the first warning to deem auctions as potentially destructive for indus­
trial relationships. Indeed, relationship quality has been one of the main
derivates in the literature, as its application seems to collide with the
postulates of relationship marketing, that is, “all marketing activities
directed towards establishing, developing, and maintaining successful rela­
tional exchanges” (Morgan & Hunt, 1994, p. 22). Some authors consider
the ORA as a regression on the power equilibrium between buyer and
sellers; a situation that can be positive in the short-term but negative in
the long-term (Schrader et al., 2004). Hence, the overall evaluation after
the auction can favor a relational ORA (Mora Cortez & Johnston, 2020).
The perception about relationship quality is not independent from spe­
cific features of an ORA itself or participating actors (Jap, 2007).
An outstanding point about relationship quality in the literature is the
discussion in 2005 on how to manage relationships resulting from an
ORA, between Daly and Nath (2005a, 2005b) and Emiliani and Stec
(2005). In a series of three documents, those authors discuss how to
improve relationships after an ORA has been conducted. Daly and Nath
(2005a) suggest subsidizing relational partners, payment for losing
bidders, or re-negotiation of final contracts, among other specifications,
to make auctions more relational to favor long-term investments. This
idea was not shared by Emiliani and Stec (2005) who suggest that buyers
use ORAs to achieve a better price from suppliers through coercive
bases; the only possibility is to expand value propositions instead of
subsidizing suppliers, since this will be burdensome to manage for both
suppliers and buyer. Finally, Daly and Nath (2005b) responded by
emphasizing the need to enhance interpersonal trust as a valid way to
develop positive impacts on productivity through ORAs while
improving relationship quality. A buyer-seller relationship requires a
mutual understanding and commitment that could impact productivity
(Daly & Nath, 2005b). Overall, the literature shows an intense debate on
how to develop a more relational outcome, which does not have to be an
oxymoron (Muylle & Standaert, 2016).
SCM literature contributes in several ways to relationship quality in
ORAs. First, scholars emphasize the role of trust in buyer-seller re­
lationships. Gattiker, Huang, and Schwarz (2007) indicate that the
greater the complexity of the purchase in an ORA, the lesser the supplier
trust in the buyer, which, in turn, negatively affects the supplier’s desire
to deal with the buyer in the future. Second, research indicates that
suppliers are less sensitive to ORAs than buyers from a relational
perspective. Lösch and Lambert (2007) note that using a reverse auction
influences buyers’ perception and drives a feeling that their relationship
becomes more negative (e.g., reduced commitment). Third, scholars
mention that suppliers are more sensitive to not winning a contract than
the fact of participating in an ORA. Engelbrecht-Wiggans and Katok
(2006) state that suppliers prefer hybrid mechanisms to pure auctions.
Similarly, Smart and Harrison (2003) indicate that the effect on re­
lationships will depend on the extent to which buyers employ the auc­
tion as a price weapon. Future marketing research could consolidate the
SCM additional findings via multiple case studies adopting a compara­
tive analysis.
4.4.4. Economic performance
Among the four post-auction tenets, economic performance plays a
prominent role in the reviewed articles dealing with consequences.
Economic performance refers to any kind of commercial advantage
achieved through ORAs with its subsequent effects on financial ac­
counts. The underlying reason is that it is closely related to pricing and
the achievement of cost savings during organizational buying processes
across different scenarios (Agndal et al., 2007; Dixit et al., 2008; Muylle
& Standaert, 2016). This type of performance was analyzed from the
R. Mora Cortez et al.
buyer and seller perspective (Jap, 2007; Muylle & Standaert, 2016) but
also from the market-maker perspective (Grewal et al., 2010). However,
most articles do not offer clear calculations of economic benefits and
inform general conclusions from the actors. In addition, the literature
suggests other economic-related benefits such as flexibility in managing
the orders, lowering inventory costs, and improving safety stocks
(Schrader et al., 2004). Although this economic gain is usually linked to
the buyer, it opens an opportunity stream for new suppliers as they can
gain new customers (Jap, 2003) and expand to new markets (Emiliani,
2004). Commonly, the literature identifies the incumbent suppliers as
the most affected actor from an economic perspective (e.g., Jap &
Haruvy, 2008).
Several studies criticize the economic performance of an ORA (and
its strategic effects), since it can be overrated in comparison with
collaborative cost reduction initiatives and knowledge sharing across
networks (Emiliani, 2004). Research still struggles to account for the
benefits of running an ORA. For example, Úbeda et al. (2015) indicate
that a reverse auction is a valid alternative in industrial procurement,
but with no positive consequences on economic performance (relative to
other purchasing approaches). An opportunity in the economic perfor­
mance spectrum is to further explore the time savings for both buyer and
seller. In this vein, Standing and Standing (2015) reflect that “a good
negotiator could do just as well (as an ORA), the challenge is do they have the
time to negotiate all the contracts they have to manage?” (p. 727).
Furthermore, for market-makers it is important to follow a value-based
approach to consider how benefits are disseminated across all actors in
an ORA (e.g., Eng, 2004). Therefore, the governance mechanism
depending on the environmental conditions will be key for reaching
desired outcomes (Grewal et al., 2010).
SCM literature is highly consistent with marketing research. How­
ever, three novel ideas provide a more nuanced perspective on ORAs: (1)
relationship orientation, (2) supplier’s capacity constraints and future
costs, and (3) multi-attribute auctions superiority. First, Pearcy et al.
(2007) indicate that a relationship orientation negatively influences
short-term price reductions and time savings generated via an ORA. The
rationale is that, under a relationship orientation, the primary concern is
long-term cost reduction and time investments are required to develop
and maintain buyer-seller rapport. Second, Gallien and Wein (2005)
note that minimizing buyer’s cost under the suppliers’ capacity con­
straints entails allocating the procurement contracts only after the entire
bidding event is completed, and the lowest bidder may not be awarded a
contract. Third, Chen-Ritzo, Harrison, Kwasnica, and Thomas (2005)
showed that multi-attribute auctions are superior to price-only auctions.
The authors demonstrate that a multi-attribute auction increases buyer
utility and does not degrade – and occasionally increases – seller profits.
This idea is supported (from the buyer’s view) in the marketing litera­
ture only when the number of bidders is high (cf. Engelbrecht-Wiggans
et al., 2007). Further marketing research could explore whether a rela­
tionship orientation is related to conducting multi-attribute auctions
and what drives a supplier to expand its installed base.
4.5. Research setting
4.5.1. Sector: public versus private
The context underlying an ORA is a relevant element to consider due
to the interesting nuances noted in marketing literature. This research
stream suggests that both the public and private sectors can benefit from
their implementation. Particularly, the private industry view is domi­
nant in marketing research due to the cost-saving effects in the buyer
accounts (Jap, 2002). Private usage of ORAs includes the analysis of
auctions in specific industries or individual firms. Conceptual articles
highlight the importance of integrating different methodologies
(including an ORA) for supply chain management in the private sector,
emphasizing the importance of developing awareness of strategic
sourcing in organizational buying behavior (Agndal et al., 2007; Úbeda
et al., 2015). This implies improving buyer professionalization with the
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Industrial Marketing Management 115 (2023) 439–454
application of new strategies and methods. Empirical ORA studies tend
to analyze the behavior of actors in specific industries, such as the
automotive industry (Haruvy & Jap, 2013; Jap, 2003; Jap & Haruvy,
2008; Jap & Naik, 2008) and retailing (Eng, 2004), or in a set of in­
dustries, including chemicals and high-tech products (Jap, 2007).
Overall, marketing literature made it possible to identify a series of
suggestions for ORA design and deployment to improve outcomes.
Furthermore, other more specific approaches emerge from the literature
analysis, such as how General Electric Appliances (in the US) manage to
buy effectively, saving more than $50 million per year (Schrader et al.,
2004); or the expected consequences for the global aerospace industry
clusters (Emiliani, 2004).
Public industry also has its quota in general business research since
governments are important buyers with sophisticated buying processes
(Dixit et al., 2008; Engelbrecht-Wiggans et al., 2007). Nonetheless, a
public setting is scant in the ORA literature. This gap offers research
opportunities for investigating all ORA actors and their interactions with
government agencies. Extant research highlights military procurement
as a rich ORA setting to be further explored since major projects (e.g.,
aircraft, ships, and tanks) rarely come up and are enormous in scale
(Daly & Nath, 2005a, p. 163). Moreover, the literature acknowledges the
potential benefits of ORAs for centralized state or country level pur­
chases (e.g., Standing & Standing, 2015).
The SCM literature is more enthusiastic in noting the relevance of
ORAs for the public sector. However, most of the empirical analyses are
conducted via private firm-based datasets. Basically, scholars have
limited the attention to the public sector to brief reviews in their man­
uscripts. For example, Karabağ and Tan (2019) indicate that prior
research found that the price paid by the public sector decreases with
each additional bid submitted in the auction, the number of bidders,
and/or the number of auctioned items. Overall, we conclude that
research into public sector ORAs is still in its infancy and needs much
further attention. For instance, future marketing research could study
whether buyer’s savings and rationale for participation are consistent
across sectors (i.e., private vs. public).
4.5.2. Geographical view: local versus international
Since reverse auctions might be conducted by firms operating in
global markets, many studies possess an international scope. Other
studies, meanwhile, are local (Smeltzer & Carr, 2003; Schrader et al.,
2004; Mora Cortez & Johnston, 2020), because the research was con­
ducted on a national scale without any reference to foreign players.
However, an ORA, as a digital tool, is conceived to be global (Sashi &
O’Leary, 2002), and even though a study’s research setting can be
limited to a certain country, the results might be expanded to other re­
gions because the market contingencies barely influence its deployment
(as a purchasing tool). From the buyer perspective, there is great interest
in the participation of firms, regardless their origin, if they can provide a
quality product at a reasonable price. For suppliers, it can be an op­
portunity to gain new customers or market access. A problem emerges
when ORA application causes supplier churn, generating an unsatis­
factory bidders’ critical mass (Jap & Haruvy, 2008). For instance, local
suppliers can be uninterested in participating in an ORA if international
low-cost suppliers are part of the procedure. The literature considers the
origin of the actors as less critical than those issues related to an ORA’s
design, its dynamics, and the positive results for every actor partici­
pating in it (e.g., Standing & Standing, 2015).
SCM literature does not differentiate bidders or buyers in ORAs by
country of origin either. A possible explanation is that subjects in SCM
studies are often undergraduate and master students in the US (e.g.,
Carter & Stevens, 2007). Investigating the nuances linked to foreign
bidders is key to advancing theory on ORAs. For example, future mar­
keting research could explore the cultural differences across foreign
bidders and their influence on price concessions. In addition, further
research could consider conducting an ethnography study on interna­
tional bidders’ experience.
R. Mora Cortez et al.
5. Research agenda
To enhance the article’s contribution, we have identified opportu­
nities for further research. We acknowledge that the B2B marketing field
is eager for an ORA perspective facilitating deployment and manage­
ment, by enhancing the knowledge of all actors in the system (i.e.,
buyer, seller, market-maker). There is a latent need to study those triadic
actors independently and their interaction across all the stages in the
process model (i.e., pre-auction, during-auction, post-auction). Based on
the reviewed literature, ORAs are greatly influenced by the business
context and current (buyer) purchasing strategy, which favor qualitative
research (Möller & Parvinen, 2015). The process model also suggests
moving toward a longitudinal understanding of what happens
throughout an ORA in an integrative manner (e.g., using hidden Markov
models [HMM]; see Zuchinni, MacDonald, & Langrock, 2016). In this
section, we summarize and discuss the most relevant domains requiring
further research for each stage by focusing on each actor independently
and their interactions.
5.1. Opportunities for pre-auction
From the buyer perspective, prior research in this stage is abundant
in capturing (quantitatively) the effect of the ORA platform setup on
performance (mainly economic results). However, the literature needs
to better understand the strategic nature of ORAs. In this regard, un­
derstanding how contextual factors, either internal (e.g., type of prod­
uct/service, experience, organization of buying activities) or external (e.
g., sector, economic situation), motivate buyers to adopt an ORA will
favor its evolution; that is, assuming a strategic sourcing approach
instead of a price reduction tool perspective in future literature (Grewal
et al., 2010). This strategic perspective is critical for the success during
its application, and it will benefit a more open and collaborative
approach instead of a competitive, zero-sum approach which would
reduce suppliers’ negative perception on ORAs (Muylle & Standaert,
2016; Úbeda et al., 2015).
From the suppliers’ perspective, there is not enough understanding
of why they become involved in an ORA; that is, what is the rationale
behind participating and the different factors that motivate their will­
ingness to get involved. Also, how this participation fits with their
market-orientation and potential conflicts of interest. Another important
element that should be considered in the literature is the decision of
prequalified suppliers not to take part in an ORA, a situation that often
occurs in practice; the underlying reasons that substantiate this decision
and also the consequences are missing from extant marketing research.
Specifically, the market-maker is usually considered a black-box in
the ORA related literature. Although for market-makers the ORA could
be simply a service to be sold, the literature must progress in how they
create expectations to engage in an ORA for buyers and sellers. Hence, it
would be valuable in future research to detail a series of recommenda­
tions and activities to be performed by market-makers, particularly in a
highly digitalized world. Moreover, there is a gap in the marketing
literature regarding the potential situation of co-creating an ORA format
including all actors’ views. This would contribute to enhancing ORA
multi-actor favorability, reducing the perception of opportunistic
behavior and potential conflict among the actors.
Finally, there are two questions that require an integrative approach
considering all actors simultaneously. Firstly, the dynamic nature of
markets and the growing presence of servitization in every area of mar­
keting (Rust, 2020). The literature stresses the importance of the nature
of the offering dealt with by the ORA, and the difficulty of applying an
ORA to complex or very specific offerings. Thus, more research is
required to adapt the basis of an ORA to current business reality and to
ease the adaptation of this strategic sourcing approach in buying situ­
ations where it was not usual. Secondly, business is evolving to account
for higher-order market structures (e.g., ecosystems). Thus, future
research might examine designing an ORA to supply networks (Haruvy &
450
Industrial Marketing Management 115 (2023) 439–454
Jap, 2012). In Table 3, we draw up representative research questions to
advance these areas.
5.2. Opportunities for during-auction
The focus of marketing research in this stage is on constructing a
theory of bidders’ behavior. Nevertheless, extant literature only ac­
counts for a reduced number of variables (e.g., total number of bids
submitted, speed of response, and level of price concessions), while the
understanding of what happens during the auction is still limited. In this
regard, the buyer-oriented literature is silent on what occurs in social
interactions within an ORA team; this point is particularly relevant since
there are managers with divergent roles and interests in the buying
center that could participate (Cabanelas et al., 2023). The identification
of those individuals who are part of an ORA and why they are involved
in it is worthy of interest from a marketing perspective. Furthermore, it
would also be important to comprehend what features of the context
drive the unethical use of an auction during the event. Therefore, an
understanding of the characteristics surrounding this behavior can
mitigate its impact through a preliminary action by the market-maker or
through some demands by suppliers with respect to the ORA’s code of
conduct.
From the suppliers’ perspective, both the connection between bidder
behaviors and internal organization or contextual events (Jap & Haruvy,
2008), and the organizational dynamics of the seller participation (Mora
Cortez & Johnston, 2020) have not been studied. In this regard, it is
necessary to pay specific attention to these issues, with special emphasis
on how the information is managed during an ORA (i.e., how the privacy
statements are accomplished to have fair competition). This element is
extremely important to generate confidence in the system and foster the
participation in future auctions. In this vein, the understanding of the
main fears of suppliers would be relevant to facilitate their integration
into auctions, which are designed by both buyer and market-maker.
The market-maker possesses a central role during the auction,
particularly in the dynamics between actors (e.g., seller-market-maker).
Its role should be precise; for example, if suppliers use the helpline to
reach out to market-makers, is it important to realize why are they
calling? How long does the call last? Are they satisfied with the market-
maker help? Moreover, the literature is silent on the market-maker
support to buyers during a reverse auction. Thus, the role of the
market-maker should be studied from a dynamic perspective, particu­
larly identifying their participation in the functional and social man­
agement. Another potential avenue for further research is the growing
usage of artificial intelligence (AI), which could be applied to ORAs
(Rust, 2020). This opens questions related to the incorporation of al­
gorithms or computationally intensive methods to improve decision-
making. Similarly, AI could assess and integrate prequalification issues
in the algorithms applied during an auction.
The last domain should consider all participants to deploy a map of
the emotions that emerge during an ORA, because unmanaged emotions
can interfere with effective information processing (Haruvy & Jap,
2013; Yeniyurt, Watson, Carter, & Stevens, 2011). This mapping of
emotions would facilitate the anticipation of problems and potential
solutions. Also, empathy becomes a valuable issue when understanding
the human effect on this process. The answers to the research questions
raised in Table 3 should foster improvement of future ORA processes.
5.3. Opportunities for post-auction
This stage is the most important one from a managerial decision-
making perspective. In this stage, the goal of selecting a supplier is
potentially accomplished. However, “the vast majority of auctions in the
marketplace today do not determine a winner … and the buyer may reserve
the right to select a winner on any basis” (Jap, 2002, p. 510). Further
research from the buyer perspective could explore the effect of expec­
tations and brand attitudes emanating from previous relationships on
R. Mora Cortez et al.
Table 3
Further research agenda.
Research Actor(s) Illustrative research questions
domain
Pre- Buyer • What are the contextual
auction factors that foster ORA
selection as strategic
sourcing approach?
• How can buyers present
ORAs as a collaborative
strategy?
Seller • How is the seller
understanding on an ORA
before becoming involved?
• Why do prequalified
suppliers not participate in
an ORA?
Market- • What is the role of market-
maker makers during the configu­
ration of the ORA?
• How can a market-maker
include all actors’ views in
the co-creation of codes of
conduct to reduce unfair
perception and disequilib­
rium sensation?
Multiple • What challenges are ORAs
actors facing in a higher
servitization context?
• What characteristics should
be considered to adopt ORAs
in supply networks?
During- Buyer • How are social interactions
auction within the buyer team?
• What during-auction context
drives “shilling” (i.e., buyer
unethically bidding to boost
the event)?
Seller • How are behaviors
associated to internal
characteristics and
contextual events? What are
the main concerns of
suppliers on privacy during
the ORAs?
• What topics drive the seller
and market-maker interac­
tion during an ORA?
Market- • How do the dynamics
maker between seller and market-
maker affect the ORA
deployment?
• What computationally
intensive methods and
algorithms based on AI can
be integrated in during-
auction decision-making?
How can they include
prequalification issues? How
to apply other ORA
appealing research methods
(e.g., Bayesian models,
HMM)?
Multiple • What emotions emerge
actors during an ORA? How can
empathy (towards other
actors) shape these
interactions?
Post- Buyer • How do personality,
auction emotions and relational
antecedents influence the
suppliers’ selection?
• What are the main factors for
selecting the supplier from a
total cost of ownership
view?
Industrial Marketing Management 115 (2023) 439–454
Table 3 (continued )
Research Actor(s) Illustrative research questions Concept(s)
Concept(s) domain
• What are the influences of • Economic
• Expectations & “shilling” on the ORA Performance
Rationale, outcome?
Research setting Seller • How does the participation • Relationship
of a supplier in an ORA affect Quality
them in future relationships
with buyers (different from
the ORA executor)?
• Market Decisions Market- • What is the divergence • Offering quality,
maker between prequalification Relationship
and behavior after the Quality
reverse auction (for the
assigned supplier)? What is
the impact of such a
• Market Decisions divergence?
• What are the common • Supplier
situations with multiple Selection,
• Expectations & price acceptance points and Offering Quality
Rationale, Process different levels of quality
Control information?
Multiple • What are the potential • Supplier selection
actors categories and the specific
characteristics of and
• Market Decisions, alternatives to the multiple
Process Control scenarios that can occur
after an ORA?
• Process Control • How does the interaction • Offering quality,
among parties and the Relationship
offering of the supplier Quality
• Behaviors evolve longitudinally during
the supplying lifetime after
• Risks and the ORA?
uncertainty Whole- Multiple • How should an ORA be • All concepts
auction actors approached from a holistic
perspective considering the
• Risks and dynamics and interactions
uncertainty among all participants?
• How are the costs associated • All concepts
with pre-auction linked to
the costs associated with
during-auction? How are the
costs associate with during
• Behaviors auction linked to the costs
associated with post-
auction?
• Behaviors • How do firms account for • All concepts
learning throughout an
ORA? How can the emerging
knowledge be used in a
• Risks and future ORA?
uncertainty
selecting a supplier or defining paths to follow. This perspective is
particularly interesting once the auction closes as buyers sometimes
conduct an audit before making a final decision (Haruvy & Jap, 2012). It
is also worthy to better understand what the influential factors are when
selecting the best potential supplier from a total cost of ownership view,
and the factors considered for this decision after an ORA. Additionally,
empirical studies could compare the drivers of selecting low-tag price
• Emotions
suppliers versus low-total cost of ownership suppliers. Moreover, in this
step it would be valuable to study, as it is neglected in current literature,
the influence of “shilling” (i.e., purchasing manager bidding against
suppliers in the auction) in the definition of an ORA outcome (Sambhara
• Supplier
et al., 2017). This behavior could modify the final decision through the
Selection,
Relationship unfair influence of bidders.
Quality The supplier perspective in extant research is more limited in the
• Supplier post-action than that of the buyer, and including it would contribute to a
Selection, more holistic analysis. Thus, the participation decision can affect the
Economic
Performance
future relationship with a buyer, and it is important to reflect on a po­
tential situation where an incumbent supplier is not on the list of
selected companies. The possible reactions from them should be
451
R. Mora Cortez et al. Industrial Marketing Management 115 (2023) 439–454

investigated in the literature to provide potential alternatives for firms
to manage this threat in a soon-to-be-ended relationship (Mora Cortez &
Johnston, 2020).
The current literature is silent on post-auction analysis from the
perspective of the market-maker. In this regard the evaluation of the
divergence between the prequalification assessment and the result of the
ORA could be of interest, as it would open avenues for the improvement
of the pre-auction process. A quantitative and qualitative evaluation of
the divergence would offer interesting perspectives for the decision-
making of ORAs. Moreover, in some circumstances buyers might pre­
fer the acceptance of multiple price points due to different levels of
quality information; but they should be objectivized as much as possible
to reduce the subjectivity in the decision-making of the buyer. The
integration of AI-based algorithms for monitoring the post-auction
process can provide interesting insights that are absent from the
literature.
Finally, an integrative approach, considering all actors, is needed to
identify confounding factors during supplier selection (Mora Cortez &
Johnston, 2020). It means identifying the potential characteristics that
buyer, sellers, and market-maker can face, and the different courses of
action that apply depending on the circumstances. A clear example of a
series of roadmaps that depicts a buyer’s decision tree would be highly
useful for practitioners. Furthermore, there is scarce literature
describing the post-auction interaction between a buyer and seller, and
it is simply nonexistent for the buyer and market-maker dyadic inter­
action and intra-actor dynamics. This endeavor demands a longitudinal
approach during the supplying lifetime that emerges once the ORA is
over. Table 3 includes a series of research questions in each of these
areas.
5.4. Opportunities for the whole-auction perspective
consequently more topical research findings might emerge from lower
ranked marketing journals. Future research could integrate such find­
ings and compare them with ours.
Second, we compared ORA marketing literature with the SCM
literature. However, future studies could consolidate both research
streams to conduct a unified analysis. Moreover, reverse auctions have
attracted the attention of research across many disciplines. A significant
stream of ORA literature is produced by the information systems field
(Sambhara, 2020). Complementing our findings with those from infor­
mation systems might enhance the discussion on ORAs, especially by
exploring the intersection between decision-making and technology
usage.
Finally, while we focused on ORAs as a purchasing tool used in
organizational buying behavior (Pedersen et al., 2020), we did not
explicitly add our findings to such a research stream. We acknowledge
that integrative endeavors in organizational buying behavior are rela­
tively old (e.g., Johnston & Lewin, 1996). Thus, understanding ORAs
might enrich organizational buying behavior theory, which simulta­
neously may enhance ORA legitimacy in the marketing literature.
All in all, our systematic review accounts for the scholarly work on
ORAs in rigorous marketing and SCM outlets in the 2002–2020 period
and assesses the current state of the literature. We provide a new
theoretical lens by assimilating three relevant layers of reverse auction
research: (1) conceptualization, (2) ORA as a process, and (3) research
setting. We discuss intriguing gaps in the literature, while proposing
numerous opportunities for future research in the B2B field. The
research agenda provides direction for authors, editors, and reviewers in
the development of ORA studies. Successful implementation would
bring more in-depth scrutiny into how firms are currently selecting
suppliers. We thus hope our study provides impetus for quality ORA
research.

In the previous subsections a series of ideas were included for the Appendix A. Brief summary of marketing literature on ORA.
different steps, either from a single-actor and a multiple-actor approach.
However, current literature is also limited in the analysis of all steps of Characteristic Description Supportive literature
the ORA as a whole, neglecting the tenets of complexity-based theories. Kauffman and Leszczyc
Primary goal of Identifying ORA features and
In this regard, the application of principles of Complex Adaptative (2005); Jap and Naik (2008);
research measuring consequences
System or Theory of Systems (Cabanelas et al., 2023) could be helpful to Muylle and Standaert (2016)
adopt a holistic perspective that drives understanding of the dynamics Buyer, seller, and market Emiliani (2004); Mora Cortez
Actors maker and Johnston (2020)
and interaction of the ORA’s different steps. This is particularly relevant
Smelzer & Carr (2003);
due to the participation of companies in higher-order organizations and Market Emiliani and Stec (2005);
supply networks embedded in global value chains, since this would philosophy Competition (among sellers) Agndal et al. (2007)
allow more comprehensive understanding of the puzzle. Sashi and O’Leary (2002); Eng
Managerial
Internet access and a platform (2004); Dixit et al. (2008);
Another direction for further research is related to the costs of the requirement
Grewal et al. (2010)
process. It is relevant to understand how the investment in previous Key managerial Supplier selection & Jap (2002, 2003); Úbeda et al.
steps during the development of an ORA favors cost savings throughout output purchasing price (2015)
the process. Therefore, it is interesting to explore how the ex-ante Focus of Beneficial impact of ORAs for
configuration of an ORA helps optimize the evolution of the during- research buyers and the adverse Schrader et al. (2004); Daly
analysis consequences for sellers and Nath (2005a); Jap (2007)
auction activities. But also, how the during-auction activities condi­
Engelbrecht-Wiggans et al.
tion the costs related to the decisions and deployment in the post- Equilibrium between offering (2007); Haruvy and Jap
auction stage. Main challenge quality and price (2013)
Finally, the organizational learning about ORAs is another research
direction. The capacity to integrate prior experiences from buyers,
suppliers, and market-makers can directly affect future decisions, rein­ Supplementary data to this article can be found online at https://doi.
forcing an adaptative behavior of participants. The procedures, objec­ org/10.1016/j.indmarman.2023.10.011.
tives, and actors can change after conducting an ORA (Tayaran &
Ghazanfari, 2020). Further research could study how ORA participants Data availability
learn from previous participations and what factors catalyze that
learning. No data was used for the research described in the article.

6. Limitations and concluding remarks Acknowledgements

First, it is relevant to note that, as with any other integrative work, We appreciate the help of Jorge Seborga, Raquel Piñán, Ixone
our systematic review does not claim to incorporate each publication in Ingunza, María Garate, Iban Ibáñez and Rafael Quintanilla in their
the ORA field. The analyses are based on a selection of articles from high professional advice on the defined model. We also value the comments
ranked marketing journals (like Khamitov, Grégoire, & Suri, 2020), and from the anonymous reviewers, the editor and the guest editor. The

452
R. Mora Cortez et al.
current research has received support from Xunta de Galicia (grant GPC-
ED431B 2022/10). Funding for open access charge: Universidade de
Vigo/CISUG.
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Aricle
Journal of International Marketing
1-20
Price Increases and Their Financial © The Author(s) 2023

Consequences in International Article reuse guidelines:

sagepub.com/journals-permissions
Business-to-Business Selling DOI: 10.1177/1069031X231214160
journals.sagepub.com/home/jig

Maximilian Friess and Roland Kassemeier

Abstract
Although price increases are common in business-to-consumer and business-to-business (B2B) markets, research examining the
consequences of price increases on financial performance outcomes in B2B contexts is scarce. This study takes a relationship
perspective on price increases and examines how a portfolio price increase affects the financial performance of the customer
relationship and whether and how this effect varies between international business customers from different cultures. Based
on objective data from 966 international B2B customers of a chemical goods company, this study examines a large-scale field
intervention. Results show that higher portfolio price increases, although rooted in an increase of upstream costs, bring more
severe harm to B2B customers’ sales revenue than lower portfolio price increases. These consequences vary with customers’
cultures as B2B customers with culture-specific communal norms are more susceptible to the magnitude of portfolio price
increases than customers without such norms. International B2B companies, therefore, need to refrain from implementing uni-
form price increases and should consider their business customers’ cultural origin when designing and implementing price
increases.

Keywords
price increases, business-to-business sales, culture, difference-in-differences
Online supplement: https://doi.org/10.1177/1069031X231214160

Increasing prices of raw materials and the positive development
of the price index in countries around the world diminish the
profit margins of many industrial companies (Abdelnour et al.
2021). Although price increases reflect a plausible answer to
higher input costs, they harm the attractiveness of the offering
for customers and thereby lower future sales volumes
(Homburg, Hoyer, and Koschate 2005; Homburg, Koschate,
and Totzek 2010; Sen, Gürhan-Canli, and Morwitz 2001).
Companies must therefore carefully consider how their custom-
ers react to price increases to prevent a situation in which
desired profit gains lead to a harmful decrease in revenue.
Whereas extant research on price increases yields valuable
insights for consumer goods markets (e.g., Homburg, Hoyer,
and Koschate 2005), insights on effectively implementing
price increases in international business-to-business (B2B)
markets are limited. This is an important issue, as buying deci-
sions differ between consumer markets and international B2B
markets. First, in B2B markets, professional buyers decide for
their companies. They focus more on objective price informa-
tion, negotiate prices individually, and purchase only because
of production or profitability needs (e.g., Forman and
Lancioni 2002; Monroe, Rikala, and Somervuori 2015; Reid
and Plank 2003). Second, customer relationships are more valu-
able assets in B2B markets as customers often purchase a port-
folio of products in long-term relationships with suppliers
(Palmatier, Scheer, and Steenkamp 2007; Schmitz et al.
2020). Third, while in international business-to-consumer
(B2C) markets, prices are typically adjusted to national
markets, more than 30% of B2B sales managers still deploy
price increases uniformly (Brzoska and Biermann 2022).
However, not accounting for heterogeneity across international
customers reflects a serious issue in the implementation of price
increases (Hamilton et al. 2021; Hazan et al. 2022).
Therefore, the goals of this study are to explore the conse-
quences of the magnitude of price increases on B2B customers’
financial performance (in terms of sales revenue), and whether
and how these vary across customers’ cultural contexts. To
account for the relationship (instead of the transaction)
Maximilian Friess is Assistant Professor of Market-Based Management, LMU
Munich School of Management, LMU Munich, Germany (email: friess@lmu.
de). Roland Kassemeier is Associate Professor of Marketing, Warwick
Business School, University of Warwick, UK (email: roland.kassemeier@wbs.
ac.uk).
2 Journal of International Marketing 0(0)
emphasis in B2B business, we focus on a portfolio price
increase (PPI) and its magnitude, which we define as the rela-
tive increase of prices paid for the portfolio of products that
the customer purchases from the supplier.
In our conceptual model, we build on relationship norms to
conceptualize the impact of PPIs on relationships with interna-
tional B2B customers (e.g., Clark and Mills 1979). In line with
B2C pricing theory, one may expect that a PPI for customers
relying on exchange norms should harm sales revenues since
customers only face additional costs. In contrast, customers
who rely on communal norms (e.g., solidarity) may be more
motivated to retain business after a PPI, especially if justified
by higher input costs (Kahneman, Knetsch, and Thaler 1986).
Whereas the consequences of price increases for consumers
are evident, as they rely on either exchange norms or communal
norms (e.g., Chen et al. 2018), evaluating price increases in
B2B may be more complicated. B2B companies aim to maxi-
mize utility and follow exchange norms (Einhorn 1994), but
their actions are conducted by individual B2B buyers who
forge relationships with salespeople and, thus, may also rely
on communal norms (Palmatier, Scheer, and Steenkamp
2007). Hence, B2B companies may rely on both exchange
and communal norms when evaluating price increases. As
lower PPIs are more likely to fall within B2B buyers’ price dis-
cretion, they can respond in line with communal norms, poten-
tially buffering business losses. Yet, higher PPIs may exceed
their price discretion or even violate communal norms,
making buyers rely on exchange norms and reduce business.
We suggest that the effect of the magnitude of PPIs and, thus,
the application of communal norms depend on B2B customers’
cultures (Chen et al. 2018). Hence, we examine whether and
how the effect of PPI magnitude on B2B customers’ sales
revenue varies across cultures.
To test our conceptual model, we rely on objective data from
966 international B2B customers of a chemical commodity
goods company. In response to rising costs for raw materials,
the company’s management passed on these cost increases by
calculating new target prices for products that were particularly
affected by the cost increase and implemented a worldwide
price increase for those products. As a result, customers were
affected differently by the price increase depending on their
product portfolio bought from the supplier, yielding a large-
scale, quasi-experimental field intervention for our investiga-
tion. Whereas the price increase did not affect the product port-
folios of some customers, it affected the product portfolios of
other customers at heterogeneous levels. We build on longitudi-
nal company records of one year before and one year after the
intervention. To examine how the effect of the PPI differenti-
ates between cultures, we rely on country-specific data on
Hofstede’s (1984, 2011) dimensions of long-term orientation,
power-distance belief, and masculinity and matched this infor-
mation to customer data.
Results of a robust difference-in-differences (DiD) multilevel
model (customers nested in countries) with preintervention and
postintervention data show that the magnitude of a PPI harms
B2B customers’ sales revenues and that this effect varies with
the cultural characteristics of the B2B customer’s country.
Specifically, B2B customers with culture-specific communal
norms (high long-term orientation and low masculinity, as
defined by Hofstede [1984]) react less negatively to lower
price increases than B2B customers without such norms.
Because of this buffer effect, the impact of higher PPI magnitude
is more severe for these customers, and sales revenues decline
more sharply with each percentage of higher prices.
Our findings provide important implications for research on
international pricing, global account management, and export
sales. First, previous research on price increases has predomi-
nantly focused on B2C markets (e.g., Homburg, Hoyer, and
Koschate 2005; Lu et al. 2020) but remains limited in interna-
tional B2B markets (e.g., Bruno, Che, and Dutta 2012). We
account for the long-term nature of B2B relationships by adopt-
ing a relational perspective examining the impact of the average
price increase for the entire product portfolio bought. This
allows us to account for potential spillover effects of price
increases on customers’ further purchases. Our results imply
that, in most B2B commodity markets, even small PPIs do
not increase sales revenues with the affected customer
because the PPI hampers customers’ overall demand. Second,
our results indicate differences in the financial consequences
of price increases between B2C and B2B markets. According
to the dual-entitlement principle, consumers should react less
negatively to price increases if these are aligned to cost
increases (e.g., Bolton and Alba 2006; Kahneman, Knetsch,
and Thaler 1986). Our results imply that the dual-entitlement
principle may not hold in B2B commodity contexts as PPIs,
although being justified by cost increases, can harm B2B cus-
tomers’ sales revenues. Third, we contribute to research on
global customer account management and export sales, which
has identified customers’ cultural values as a boundary condi-
tion explaining differences in business customers’ purchasing
behavior (e.g., Habel et al. 2020). We advance this literature
stream by revealing that B2B customers with culture-specific
communal norms (i.e., long-term orientation and low masculin-
ity) are more susceptible to the magnitude of PPIs. Thereby we
identify that B2B customers’ cultural-value based dimensions
also affect their price-related purchasing decisions.
In addition, our findings provide valuable implications for
international B2B companies, customer account managers, and
salespeople. Our insights allow B2B companies to align pricing
decisions with cultural conditions to buffer against negative
effects on future growth. If price increases are inevitable (e.g., in
response to raw material cost increases), global account managers
may use our findings to identify business customers from suscep-
tible cultures and initiate measures to strengthen relationships a
priori or compensate for higher costs ex post.
Literature Review: Boundary Conditions of
the Consequences of Price Increases
Table 1 provides an overview of previous research on the con-
sequences of price increases. Compared with the consequences
 Table 1. Review of Selected Studies on Price Increases.

Financial/
Behavioral Perceptual Independent
Study Sample Outcome Outcome Moderator Variable Key Findings

Kahneman, B2C Price fairness Occurrence of price The rules of fairness permit firms to pass on cost
Knetsch, and increases increases by increasing prices.
Thaler (1986)
Han, Gupta, and B2C Brand choice Deal proneness Magnitude of price Higher own-price volatility makes consumers more
Lehman (2001) increases sensitive to gains and less sensitive to losses.
Intense price promotion by competing brands makes
consumers more sensitive to losses but does not
influence consumers’ sensitivity to gains.
Homburg, Hoyer, B2C Repurchase Customer satisfaction Magnitude of price The effect of the magnitude of price increases on
and Koschate intention increase; perceived repurchase intention is less negative if customer
(2005) motive fairness satisfaction is high.
Bolton and Alba B2C Price fairness Goods vs. services; alignability Occurrence of price Price increases that are alignable to cost increases are
(2006) of costs increase perceived as more acceptable than price increases
nonalignable to cost increases.
When a cost increase is nonalignable, consumers will
be more receptive to a service price increase than to
a goods price increase.
Dawes (2009) B2C Customer Breadth of relationship; Magnitude of price Long-tenure customers are less sensitive to price
retention customer tenure increase increases.
Relationship breadth can exacerbate the adverse
effect of price increases on customer retention.
Homburg, B2C Purchase Customer income; framing of Occurrence of price Customer income attenuates the negative effect of a
Koschate, and intention price increase (absolute vs. increase price increase on the likelihood of a future purchase
Totzek (2010) relative vs. no framing) in a particular expense category.
The framing of a price increase as a percentage versus
in absolute terms leads to a lower likelihood of a
future category purchase.
Bruno, Che, and B2B Quantity Experience the customer has Reference price; Business customers react asymmetrically to price
Dutta (2012) purchased; with the salesperson magnitude of price increases and price decreases.
price outcome change Strong salesperson–customer relationships may
increase the sensitivity of customers to price
increases.
Chen et al. (2018) B2C Fairness Collectivism vs. individualism; Asymmetric pricing; Consequences of price increases on price fairness
perception interdependence vs. occurrence of price perceptions do not differ between collectivistic and
independence; relationship increase individualistic customers and between independent
norms and interdependent customers.
Lu et al. (2020) B2C Behavior Price fairness; Price increase reason (cost, Company’s market Consumer price fairness perceptions decline with
behavioral demand, unspecified) power market power when a price increase is due to costs.
intentions Market power does not affect fairness when prices
rise due to demand or when price increases are
clearly beyond the firm’s control.

(continued)

3
4 Journal of International Marketing 0(0)

of price decreases (i.e., price promotions, discounts), the conse-

Portfolio price increases exert a negative impact on

quences of price increases have received relatively little atten-

orientation and cultures that are more feminine.

This negative impact is attenuated for business
tion in extant research. The main objective of previous
research has been to explore whether the consequences of

customers from cultures with a long-term

price increases are the opposite of the consequences of price
decreases (e.g., Bruno, Che, and Dutta 2012; Han, Gupta, and

business customers’ sales revenue.

Key Findings Lehman 2001; Tarrahi, Eisend, and Dost 2016). Multiple
studies have found support for this notion by finding that the
occurrence (Bolton and Alba 2006; Homburg, Koschate, and
Totzek 2010) and the magnitude (e.g., Bruno, Che, and Dutta
2012; Homburg, Hoyer, and Koschate 2005) of price increases
can have negative consequences on price fairness perceptions
and customer outcomes. However, in their work on the dual-
entitlement principle, Kahneman, Knetsch, and Thaler (1986)
revealed that customer reactions to price increases do not
have to be the opposite of the positive consequences of price
decreases because customers permit firms to pass on cost
increases by increasing prices.
Based on these findings, previous studies have identified
Independent

Magnitude of price
Variable

further boundary conditions affecting how the occurrence and

the magnitude of price increases influence customers’ price fair-
increase

ness perceptions and performance outcomes. These boundary

conditions can be categorized into (1) the reason for the price
increase and how it is communicated, (2) the relationship
between the customer and the company, (3) the consumption
Long-term orientation; power

context, and (4) customers’ characteristics. In addition, there

are initial insights on (5) how the consequences of price
increases differentiate between customers having different cul-
Moderator

distance; masculinity

tural backgrounds, and (6) only one study has investigated the
consequences of price increases in B2B markets (Bruno, Che,
and Dutta 2012). What remains unclear, and is particularly
important for managers and salespeople serving international
customers, is whether and how the consequences of price
increases vary between B2B customers having different cultural
backgrounds. In the following, we describe extant research on
the consequences of price increases and the research gap the
Perceptual
Outcome

current study addresses.

First, multiple studies have expanded on the findings of
Kahneman, Knetsch, and Thaler (1986), who show that price
increases justified by higher upstream costs do not exert a neg-
ative impact on customers’ fairness perceptions. Bolton and
Alba (2006) show that price increases that are aligned to cost
Behavioral
Outcome
Financial/

increases are perceived as fairer, and Lu et al. (2020) show that

Sales revenue

the consequences of price increases differ between price increases

implemented because of cost increases or higher demand and
price increases that were implemented without providing a
reason. Furthermore, price increases based on fair motives are per-
Sample

ceived as fairer (Homburg, Hoyer, and Koschate 2005), and

framing the communication of price increases as a percentage
B2B

increase decreases the likelihood of future purchases to a higher

Table 1. (continued)

extent (Homburg, Koschate, and Totzek 2010).

Second, several studies have focused on how customer–
Current study

company relationships influence the consequences of price

increases. Whereas the detrimental impact of higher price
Study

increases on customer retention is less negative in long-term

customer relationships, this effect is more negative for customers
Friess and Kassemeier
Figure 1. Conceptual Model.
a
Objective company records.
b
Hofstede Insights.
c
The World Bank.
Notes: Superscripts indicate data sources. Sample size: 966 international B2B customers of a leading company chemical company. We account for the nested data
structure (customers in countries) in our empirical analysis using a multilevel mixed-effects linear regression model. GDP = gross domestic product.
having a broad relationship breadth (Dawes 2009). Furthermore,
customers’ satisfaction with the company reduces the negative
impact that the magnitude of price increases has on customer
retention with the company (Homburg, Hoyer, and Koschate
2005), and the strength of salesperson–customer relationships
leads to a greater customer sensitivity in their reactions to price
increases (Bruno, Che, and Dutta 2012).
Third, the consequences of price increases differ between
consumption contexts. The occurrence of a price increase that
is not aligned with costs has a less negative impact on price fair-
ness perceptions when it is for a service than when it is for a
good (Bolton and Alba 2006). Further, in market environments
in which price uncertainty is high, consumers are more likely to
accept price increases (Han, Gupta, and Lehman 2001).
Fourth, further boundary conditions influencing the conse-
quences of price increases are customer characteristics.
Customers having higher deal proneness are more sensitive to
both price increases and price decreases (Han, Gupta, and
Lehman 2001), and customers’ income attenuates the negative
effect of price increases on purchase intention (Homburg,
Koschate, and Totzek 2010).
Fifth, there is initial evidence that the consequences of price
increases differ between customers having different cultural ori-
entations. Chen et al. (2018) conclude that customers’ fairness
perceptions after price increases rooted in cost increases do not
differ between both customers of collectivistic and individualist
cultures and customers having an interdependent and indepen-
dent self-construal. Thus, there is initial evidence that custom-
ers’ individualism and independence do not influence the
consequences of the occurrence of price increases. However,
it remains unclear whether and how the consequences of the
magnitude of price increases differ according to other cultural
value-based dimensions.
Finally, the majority of studies researching price increases
focus on B2C markets, yet there is a limited understanding of
5
the consequences of price increases for business customers.
Initial evidence shows that price increases harm purchase quan-
tities and that business customers respond more strongly to
price increases than to price decreases (Bruno, Che, and Dutta
2012). However, as B2B markets are highly diverse, further
research is needed to understand how price increases influence
B2B customers’ sales outcomes. Consequently, there is only
limited research on price increases in B2B and their conse-
quences for international B2B customers with different cultural
backgrounds.
Conceptual Development
Overview
Figure 1 presents our conceptual model. We investigate how the
magnitude of a PPI influences international business customers’
sales revenues in a B2B commodity market. To conceptualize
the impact of PPIs with varying magnitudes, we refer to
theory on relational norms (e.g., Clark and Mills 1979). We
expect that individual buyers rely on communal norms when
experiencing PPIs with lower magnitudes, potentially safe-
guarding against business reductions. However, PPIs with
higher magnitudes likely limit buyers from relying on commu-
nal norms and pressure them to rely more on exchange norms in
response to the price increase. These make them reduce busi-
ness with the supplier. In consequence, we posit that in
typical commodity contexts, characterized by higher price elas-
ticities and lower switching costs, the magnitude of PPIs has a
negative impact on B2B customers’ sales revenue (H1).
Importantly, we further examine how this proposed effect
varies between customers from cultures that emphasize the
development of communal norms (H2–H4), as indicated by
the respective country’s cultural dimensions. These cultural
value-based dimensions (Hofstede 2011) should influence the
6 Journal of International Marketing 0(0)
extent to which business customers rely on communal norms or
exchange norms when evaluating the magnitude of the PPI.
B2B Buying Decisions and Relationship Norms
Relationship norms differ between exchange relationships and
communal relationships. Whereas exchange relationships
follow exchange norms that are characterized by a high self-
interest among each party, communal relationships follow com-
munal norms that are characterized by a concern for other
parties in the relationship (e.g., Clark and Mills 1979). Our
key rationale is that B2B customers evaluate price increases
based on both exchange norms and communal norms because
industrial buying decisions involve (1) the B2B customer
company and (2) individual buyers employed by the company.
First, B2B customer companies are economic actors aiming
to safeguard performance and increase profits. As a result, B2B
companies should expect their buyers to rely on exchange
norms to evaluate a price increase and to react in line with
the economic principles of markets. According to these princi-
ples, higher prices should be associated with lower demand
(e.g., Bolton and Lemon 1999; Einhorn 1994; Homburg,
Hoyer, and Koschate 2005) because a price increase leverages
the perceived overall (financial) costs of the business relation-
ship and deteriorates the balance between perceived benefits
and costs.
Second, B2B companies employ individual buyers with
bounded rationality who develop personal relationships with
the supplier’s salespeople (e.g., Monroe, Rikala, and
Somervuori 2015). These individual buyers may also rely on
communal norms to evaluate a price increase. The communal
norms they rely on during interactions with representatives of
the selling company make them more likely to accept price
increases, such as those rooted in material cost increases,
because they become more sensible and responsive to the sup-
plier’s need to remain profitable (Clark and Mills 1979). Thus,
B2B customer companies should react to PPIs not only based
on exchange norms but also based on communal norms, as indi-
vidual buyers make decisions for their company and may be
influenced by communal norms.
The Effect of the Magnitude of a Portfolio Price Increase
on B2B Customer’s Revenue
We expect that the magnitude of a PPI influences the impact of
a PPI on sales revenue generated with a customer. Whereas
PPIs with a lower magnitude enable B2B buyers to rely on com-
munal norms when reacting to it, PPIs with higher magnitude
should limit them in relying on communal norms, and oblige
them to react in line with exchange norms. Therefore, the
higher a price increase, the lower the customer demand
should be (e.g., Bruno, Che, and Dutta 2012; Homburg,
Hoyer, and Koschate 2005).
B2B buyers tend to apply communal norms when evaluating
price increases as they aim to secure future cooperation with
sales representatives of the supplier and the stability of their
supply. However, higher PPIs likely pressure individual
buyers to follow exchange norms in making their purchasing
decision. This is because individual buyers of B2B companies
only have limited autonomy to accept higher prices and are
responsible for providing a rational justification for accepting
higher prices (i.e., on the basis of objective criteria; e.g.,
Sheth 1973). Since a price increase is not associated with ben-
efits for the customer, the higher the price increase, the more
difficult a justification based on communal norms becomes,
given that the benefit of maintaining these norms is difficult
to objectively measure. Further, individual buyers need to
ensure their company’s economic success to protect their
employment at the firm. That is, the higher the economic
costs for their own company (resulting from higher price
increases), the less (cf. more) likely may communal (cf.
exchange) norms determine their purchasing decision.1
According to exchange norms, a price increase puts the cus-
tomer at a disadvantage. In response, the customer will likely
decrease engagement in the relationship, harming the revenue
generated with that particular customer. B2B customers may
(1) stop further investments in the relationship, or (2) even
reduce existing business conducted with the supplier.
Regarding the first of these possibilities, customers who per-
ceive business relationships as unbalanced or unfair may be
less inclined to expand the relationship (e.g., Dwyer, Schurr,
and Oh 1987) by increasing their existing business (up-buying)
or to cross-buy other product categories from the company.
Regarding the second possibility, higher prices may reduce
the difference in costs to switch (e.g., search costs) and costs
to maintain the relationship with the supplier, increasing the
risks that customers switch and source substitutes from compet-
itors (e.g., Morgan and Hunt 1994).
In the focal B2B commodity context, we expect customers’
hampered demand to outweigh the benefits from higher prices,
resulting in lower sales revenues (i.e., price times demand). In
these contexts, customers’ demand tends to decrease dispropor-
tionally to an increase in price (i.e., high price elasticities;
e.g., Gallo 2015), as there is often a high supply for substitute
products and more suppliers in the global market, which
makes it more attractive for customers to switch business to
alternative suppliers when confronted with higher costs. That
is, price increases may not compensate for the losses in custom-
ers’ demand, and, as a result, sales revenues likely decline.2
Concluding, we hypothesize:
H1: The magnitude of a company’s PPI negatively influ-
ences business customers’ sales revenue.
1
Although other factors, such as the perceived importance of relational bonds,
may shift the point at which buyers rely on exchange rather than communal
norms in their evaluation of price increases, we still expect that at a certain
point, economic costs are so high that a dominant economic valuation is likely.
2
For individual products, one may assume an inverse U-shaped effect.
However, our relational perspective aggregates purchases of different products
with varying price elasticities. Hence, it is unlikely to approximate one tipping
point(s) (i.e., a particular price increase magnitude) at which customers reduce
their demand for offerings.
Friess and Kassemeier
Hofstede’s Cultural Value-Based Dimensions as
Contingency Factors Influencing Consequences
of Price Increases
We build on Hofstede’s (1984, 2011) cultural value-based
dimensions to explore whether and how the effect of the mag-
nitude of a PPI on customers’ sales revenue differs between cus-
tomers’ different cultural backgrounds. Hofstede’s (1984)
operationalization of cultures has been adopted in numerous
international marketing studies (e.g., Ahmadi et al. 2022;
Dawar, Parker, and Price 1996; Nakata and Sivakumar 2001;
Samiee and Jeong 1994; Søndergaard 1994) and has been
used to explain differences in marketing communications and
consumer behavior (e.g., Ahmadi et al. 2022; Bahadir and
Bahadir 2020; Dwyer, Mesak, and Hsu 2005; Eisingerich and
Rubera 2010; Kim 2020; Pick and Eisend 2016).
We suggest that the effect of the magnitude of PPIs on B2B
customers’ sales revenue differs between customers from
various cultural backgrounds because these differ in the
extent to which they rely on communal norms and exchange
norms to evaluate their relationship with the supplier
(Brockner et al. 2005; Chen et al. 2018; Li and Cropanzano
2009; Shen, Wan, and Wyer 2011). Specifically, B2B buyers
with culture-specific communal norms should be more sus-
ceptible to the magnitude of PPIs than B2B buyers without
such norms. That is because B2B buyers with culture-specific
communal norms should react less negatively to lower PPIs
(than B2B buyers without culture-specific norms), as these
allow them to react in line with their communal norms.
Higher PPIs, in contrast, limit B2B buyers from relying on
their culture-specific communal norms because they have
less discretion to decide about the price based on their indi-
vidual norms. Thus, although B2B buyers who rely on
culture-specific communal norms should react less negatively
to lower PPIs, their communal norms are unlikely to buffer
their reactions to higher PPIs. Hence, the consequences of
higher (vs. lower) PPI magnitude should be more negative
(vs. positive) for customers relying on culture-specific com-
munal norms.
Especially relevant for investigating differences in business
customers’ relationship norms are customers’ short- versus
long-term orientation, power distance, and femininity versus
masculinity. These cultural value-based dimensions should
influence whether B2B customers rely on culture-specific com-
munal norms when evaluating price increases: Business cus-
tomers from long-term-oriented societies engage in business
relationships with a future orientation norm aiming for positive
long-term outcomes (Minkov and Hofstede 2012). Customers
from societies with low power distance have the norm that
power is distributed equally in a business relationship (Begley
et al. 2002; Lee, Pillutla, and Law 2000). Finally, customers
from feminine societies rely on the norm of solidarity in coop-
erative relationships (Chiang and Birtch 2007). In the follow-
ing, we hypothesize on why the consequences of lower (vs.
higher) PPIs are more positive (vs. negative) for B2B customers
relying on these culture-specific communal norms.
7
Short-Term Versus Long-Term Orientation
Long-term orientation describes the extent to which people exhibit
a pragmatic future-oriented perspective rather than a short-term
point of view (De Mooij and Hofstede 2010; Hofstede and
Bond 1988). Compared with individuals in short-term-oriented
societies, individuals in long-term-oriented societies are more
likely to adapt their traditions to changed circumstances, have
higher savings, and place lower importance on actions that rein-
state their personal stability (De Mooij and Hofstede 2010;
Hofstede 2011; Taras, Kirkman, and Steel 2010). Long-
term-oriented B2B buyers should seek positive long-term out-
comes in business relationships as they rely on their communal
norm of future orientation (Minkov and Hofstede 2012).
Due to their future orientation, we expect long-term-oriented
B2B customers to be more susceptible to the magnitude
of price increases than short-term-oriented B2B customers.
Long-term-oriented B2B buyers’ future orientation should
make them more willing to shoulder short-term losses due to
price increases. That is because they prioritize the relationship
over immediate cost savings and should more willingly invest
in the relationship with the supplying firm to reap favorable
long-term outcomes. However, with an increasing magnitude
of PPIs, long-term-oriented B2B buyers are more limited in
relying on their future orientation and have to follow exchange
norms to a higher extent. There are two reasons for this: First,
whereas lower price increases are less likely to threaten the
long-term attractiveness of the mutual relationship so that
long-term-oriented B2B buyers strive to preserve the relation-
ship (e.g., Kaufmann and Stern 1988), higher PPIs significantly
undermine the profitability of the customer company. As a con-
sequence, the application of the communal norm of future ori-
entation may have detrimental consequences for the B2B
customer company itself. Second, higher price increases con-
strain B2B buyers from relying on their communal norm
because they have limited discretion to react to the PPI in line
with it. Thereby their reaction to higher PPIs becomes more
similar to the reactions of B2B buyers having a short-term ori-
entation, who tend to rely on exchange norms when evaluating
business relationships. Hence, we expect that the effect of the
magnitude of price increases on sales revenue is more negative
for customers from long-term-oriented rather than
short-term-oriented societies. Thus, we hypothesize:
H2: The negative effect of the magnitude of a PPI on cus-
tomers’ sales revenue strengthens as long-term orientation
increases.
Low Versus High Power Distance
Power distance reflects the extent to which individuals perceive
it as acceptable that power is distributed unequally. In societies
with a high power distance, subordinates expect to be told what
they should do, and hierarchies are accepted as existential
inequality (Hofstede 2011). High levels of inequality regarding
power, distance, and wealth are more legitimate, and received
outcomes are perceived as something that should not be
8 Journal of International Marketing 0(0)
questioned (Begley et al. 2002; Lund, Scheer, and Kozlenkova
2013). Compared with individuals in societies with a high
power distance, individuals in societies with a low power dis-
tance value fairness to a higher extent and expect contracts to
be fulfilled (Begley et al. 2002; Lee, Pillutla, and Law 2000).
For B2B buyers, the magnitude of a PPI indicates the extent
to which a seller respects the balance of power in the relation-
ship with the customer. Whereas lower PPIs signal to the B2B
buyer that the seller accepts the buyer’s power, higher PPIs
might make the buyer question their legitimacy and perceive
an imbalance of power. Hence, we expect that the effect of
the magnitude of the PPI on B2B customers’ revenue is more
negative for customers with a low power distance.
As buyers with a low power distance place higher impor-
tance on a balanced power distribution, value fairness to a
higher extent, and expect to be heard, they should react less
negatively to lower price increases than to higher price
increases. Furthermore, when the magnitude of PPIs increases,
B2B buyers with low power distance have less discretion to
decide about the reaction to the price increase in line with
their communal norm. B2B buyers with a high power distance,
in contrast, should rely on communal fairness norms to a lesser
extent and, thus, should be less susceptible to the magnitude of
PPIs. Consequently, we expect that the effect of price increase
magnitude on sales revenue is more negative for customers
from low (rather than high) power distance cultures:
H3: The negative effect of the magnitude of a PPI on custom-
ers’ sales revenue strengthens as power distance decreases.
Femininity Versus Masculinity
Masculinity refers to the extent to which individuals value
achievement, heroism, assertiveness, and material rewards
(Hofstede 2011). Individuals in masculine societies admire
the strong, value the continuity of personal relationships to a
smaller extent, have lower solidarity, and care less for the
weak (Hofstede 1994). In comparison, individuals in feminine
societies prefer cooperation, modesty, caring for the weak,
and quality of life (Hofstede 1994).
We expect B2B buyers from masculine societies to rely on
self-interest and, thus, to react to price increases in line with
the exchange norms of the customer company. In contrast,
B2B buyers from feminine societies are more likely to place a
higher value on communal norms and evaluate business rela-
tionships based on the degree of solidarity practiced. They are
more likely to deviate from the exchange norms of the customer
company and, therefore, should be more susceptible to the mag-
nitude of PPIs. How B2B buyers from feminine societies react
to price increases should depend on whether they evaluate the
magnitude of the price increase to be in line with the norm of
solidarity and, consequently, whether a cooperative reaction
is adequate. B2B buyers from feminine societies may more
likely express solidarity and sacrifice their own profits to
ensure cooperation and care for the mutual business relation-
ship. Hence, when facing a lower price increase, they may be
more motivated to shoulder some of the suppliers’ financial
burdens, such as higher upstream costs from an increase in
raw material costs.
However, when the magnitude of the PPI increases, they
might rely on their culture-specific communal norm to a lesser
extent for two reasons. First, B2B buyers might react less coop-
eratively to higher PPIs because they might perceive them as less
cooperative. Second, as their price discretion is limited, B2B
buyers are limited in relying on their culture-specific communal
norm. In consequence, we expect that the negative impact of the
magnitude of PPIs on sales revenue is stronger for customers
from feminine rather than masculine cultures:
H4: The negative effect of the magnitude of a PPI on custom-
ers’ sales revenue strengthens as masculinity decreases.
In addition, Hofstede (2011) identified individualism, uncer-
tainty avoidance, and indulgence as additional cultural value-
based dimensions. These three dimensions are unlikely to
account for culture-specific communal norms making B2B cus-
tomers react differently to price increases. Individualism
reflects the degree to which people in a society are integrated
into groups (Hofstede 2011). Although individualism might
account for different reactions to price increases that are
implemented differently between groups (Bolton, Keh,
and Alba 2010), communal norms are unlikely to differ
between individualist and collectivist customers if there are
no differences between groups. Further, uncertainty avoid-
ance describes a society’s tolerance for ambiguity (Hofstede
2011). Price increases lead to a novel and unknown situation
for customers, which might make business customers in soci-
eties with high uncertainty avoidance feel more uncomfort-
able. However, as business customers can cope with the
novel situation and reestablish stability by either accepting
high prices to maintain the relationship with the supplier or
by switching to another supplier to reestablish stability in
terms of prices, communal norms relevant to their reaction
to price increases are unlikely to differ between low and
high uncertainty avoidance. In addition, indulgence refers to
societies that value the freedom to enjoy human desires and
to enjoy life (Ahmadi et al. 2022; Hofstede 2011). As we
focus on B2B customers, indulgence is unlikely to influence
customers’ reactions to price increases.
Empirical Study
Context
To test our conceptual model, we collected data from a leading
European chemical company. The firm offers a broad variety of
adhesives and composites for business customers across major
industries, such as automotive, metal, industrial, packaging,
construction, and consumer goods. It operates in over 120 coun-
tries worldwide, with key markets in Europe. Most product
lines are typical commodity businesses, and few offerings are
customized to fit individual business customers’ needs and
demands. The firm generates approximately $16 billion in
Friess and Kassemeier
Table 2. Overview of Key Measures.
Construct Definition
Postintervention period Focal observation; reflects 12-month period
(POST) before (T0) vs. after (T1) the time point of
price increases
Portfolio price increase Price of at least one product that the customer
(PPI) has purchased (representing customer’s
product portfolio) has increased
Portfolio price increase Relative increase of prices for products that
magnitude (PPIM) the customer has purchased (representing
customer’s product portfolio)
Sales revenue Amount of sales revenue generated with
customer in focal period (T0, T1)
Long-term orientation The extent to which people exhibit a
(LTO) pragmatic future-oriented perspective rather
than a short-term point of view
Power distance (PD) The extent to which individuals perceive it as
acceptable that power is distributed
unequally
Masculinity (MA) The extent to which individuals value
achievement, heroism, assertiveness, and
material rewards
total revenue annually and employs approximately 50,000
employees worldwide.
In 2014, the company faced rising costs for raw materials,
which then threatened the company’s long-term profitability.
In response, the company calculated new target prices for prod-
ucts that were particularly affected by the cost increase and
implemented a worldwide price increase for those offerings.
The price increase and the reason for it were communicated
transparently and consistently to all customers. As a result,
some customers were confronted with immensely increased
prices for the portfolio bought from the firm, whereas others
were less or not affected by the price increase, yielding a
quasi-experimental research design. This unique research
context allows us to investigate how price increases for
product portfolios affect the future performance of business
relationships with B2B customers across different cultures.
Sample
In 2016, we gathered longitudinal, archival data on 1,068 inter-
national B2B customers from one business unit over 24 months
(12 months before the price increase that was implemented in
January 2014, and 12 months after the price increase).
Considering a period of 12 months after the price increase
also accounts for potential delayed effects. That is, B2B cus-
tomers may need time to find alternative suppliers before reduc-
ing business. We collected transaction data per customer, such
as customer characteristics (name, legal form, origin country),
9
Measurement
Dummy variable; equals 1 if observation is in T1 and 0 if observation
is in T0


K

K
PPI = 1, if PriceT1 > PriceT0 , where Price represents the
1 1
product price per unit and K represents the number of product
lines in the customer’s purchased product portfolio
Percentage increase in cumulative product prices weighted with
volume sold in previous period, defined as

K
(PriceT1 ×VolumeT0 )
PPIM =
1K − 1, where Price represents the
1
(Price 0 ×Volume 0 )
T T
product price per unit, Volume represents the volume of product
units sold in previous period, and K represents the number of
product lines purchased by the customer
Natural logarithm of sales revenues with customer (T0, T1)
Hofstede’s measure for long-term orientation (1–100)
Hofstede’s measure for power distance (1–100)
Hofstede’s measure for masculinity (1–100)
data on the responsible sales rep, sales revenue generated from
a transaction, sales volume, discounts provided, and material
costs. Of all B2B customers in our sample, 585 customers expe-
rienced a price increase in at least one of the products purchased
from the firm, whereas 483 customers did not experience price
increases in any of the products purchased from the firm.
To generate a balanced sample, we drew a random sample of
483 B2B customers with a PPI (similar to a treatment group) and
483 B2B customers without a PPI (similar to a control group),
yielding a final sample of 966 B2B customers. Note that our
results replicate with the full sample of 1,068 customers, as
well as matched samples (see the “Robustness Check” section).
Customers in our sample are from 44 different countries (see
Web Appendix A). To match cultural dimensions, we rely on
the country in which the sourcing firm is located and operating.
Measures
We depict our concepts and measures in Table 2.
Portfolio price increase. Methodologically, we differentiate
between the occurrence of a PPI and its magnitude (PPIM).
First, we coded a dummy variable accounting for whether a cus-
tomer was subject to a price increase (PPI equals 1 if so, or 0 if
the customer is in the control group), that is, whether any of the
sourced products received a price increase. Second, if the cus-
tomer was subject to a price increase, we measure the PPIM
as the percentage increase in the prices for the product portfolio
10
compared between the period before and the period after the
price increase (see also Table 2).
Sales revenue. Sales revenue is measured as the amount of
revenue generated by each customer in the respective period.
We log-transformed sales revenues for the analysis.
Postimplementation period. All price increases were imple-
mented at the same time. This allowed us to specify a variable
indicating whether the observation lies before the time point of
the price increase (POST coded as 0) or after the time point
when the price increases were implemented (POST coded as 1).
Cultural dimensions. From the Hofstede research program, we
gathered national-level indices on the cultural dimensions of
long-term orientation, power distance, and masculinity for
each country represented in our sample (indices ranging from
1 to 100; Hofstede 2011; Hofstede Insights 2022). Note that
we control in our model for Hofstede’s further cultural dimen-
sions: individualism, uncertainty avoidance, and indulgence.
Control variables. As controls, we incorporated the GDP per
capita for each country to control for national-level economic
differences (World Bank 2022). We further included three
sales growth trend variables reflecting the development of
sales revenues before the price increases (Shi et al. 2017),
dummy variables accounting for major product lines of the
business unit, and dummy indicators to account for the sales
rep assigned to the individual customer. To control for hetero-
geneity in business relationships before the price increase, we
control for prior variability in transaction volume (variance of
sales revenue per transaction), average prior discount rate
(average percentage of discounts provided) (Schmitz et al.
2020), and prior interpurchase time (average count of months
between transactions) (Reinartz and Kumar 2003).3
Descriptive Statistics and Model-Free Evidence
Table 3 depicts descriptive statistics and correlations. In Web
Appendix B, we further illustrate that the control and treatment
group customers are widely comparable across key characteris-
tics of their business relationship. Figure 2 shows model-free
evidence for the development of sales revenues generated
with customers who experienced or did not experience a price
increase. For this illustration, we differentiated the treatment
group into customers who experienced price increases of low,
medium, or high magnitude (according to a 33% percentile
split). Customer revenues follow a common trend in the
period prior to the price increase, satisfying a central identifica-
tion condition of a DiD model (discussed subsequently).
Notably, we also perceive first indications that higher price
increases lead to lower sales revenues (H1).
3
We also tested whether relationship characteristics moderate the impact of
PPIM on revenue, yet found no effects.
Journal of International Marketing 0(0)
Procedure
To investigate the impact of a PPI (with varying magnitude) on
future sales revenue generated with international B2B custom-
ers, we employ a series of DiD models (see Schmitz et al. 2020;
Shi et al. 2017 for similar research designs). The DiD design has
key advantages. First, by incorporating longitudinal data from
before and after the price increase (treatment), as well as data
from a group of treated subjects (customers with price increase)
and control subjects (customers without price increase), the
model enables us to establish strong causal inference for the
impact of a price increase. Second, the model enables testing
of average treatment effects, as well as heterogeneity in these
effects, such as a varying magnitude of PPIs.
DiD model specification. To test how the magnitude of PPIs and
customers’ culture affect B2B customers’ response to price
increases, we specified two-period DiD models. Therefore, we
generated the following terms: (1) an interaction between the
occurrence of a PPI and the postintervention-period dummy
(PPI × POST), reflecting the average treatment effect; (2) an
interaction between the average treatment effect and PPIM
(PPI × POST × PPIM), indicating the effect of PPIM (to test
H1); (3) an interaction between the average treatment effect,
PPIM, and each cultural dimension (PPI × POST × PPIM ×
CultureMod), indicating heterogeneity in the impact of PPIM
based on customers’ culture (to test H2–H4); and (4) all relevant
lower-order interactions. Note that we included the magnitude of
price increase (PPIM) only in interaction terms of the average
treatment effect, as values are only valid in the treatment condi-
tion; this is a common practice in DiD applications with hetero-
geneous treatment effects (see, e.g., Shi et al. 2017).
Accordingly, a simplified conditional treatment effect model
with one cultural dimension (e.g., long-term orientation) moder-
ating the heterogeneous treatment effect may be written as
Sales Revenueijt =b0
+b1 PPIi
+b2 POSTt
+b3 PPIi ×POSTt
+b4 PPIi ×POSTt ×PPIMi
+b5 CultureModeratorj
+b6 CultureModeratorj ×POSTt
+b7 CultureModeratorj ×PPIi
+b8 CultureModeratorj ×PPIi ×POSTt
+b9 CultureModeratorj ×PPIi ×POSTt ×PPIMi
+b10 Controlsi
+b11 Controlsj
+ϵijt ,
(1)
where Sales_Revenue is the outcome varying over time t, across
customers i, and across countries j; PPI is a time-invariant
 Table 3. Descriptive Statistics and Correlations.

Variables (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17)

(1) Sales revenue (log)

(2) Price increase (Y/N) −.042
(3) Price increase magnitude −.057* .720*
(4) Long-term orientation −.182* .002 −.004
(5) Power distance .072* −.029 −.016 −.284*
(6) Masculinity −.040 .016 −.028 .333* −.262*
(7) Individualism −.022 .051* −.037 −.003 −.255* −.145*
(8) Uncertainty avoidance −.034 .008 .020 .243* .626* −.007 −.261*
(9) Indulgence −.014 .053* −.007 −.353* .041 −.449* .674* −.190*
(10) Sales growth rate 1 .017 −.036 −.057* −.01 .018 −.007 .055* −.019 .041
(11) Sales growth rate 2 −.093* .023 −.006 .041 .003 .019 −.022 .037 −.021 −.331*
(12) Sales growth rate 3 −.190* −.049* −.017 −.056* .076* −.078* .009 .046* .022 .149* −.122*
(13) GDP per capita (log) −.089* .117* .067* .253* −.534* .203* .628* −.275* .354* −.017 −.008 −.081*
(14) Prior discount rate .347* .03 −.017 .013 −.042 .057* −.033 −.034 −.050* −.051* −.112* −.569* .025
(15) Prior purchase variability .468* −.038 −.011 −.126* .031 −.031 .004 .016 −.020 −.042 −.064* −.283* −.042 .347*
(16) Prior interpurchase time −.228* −.030 −.026 .025 −.022 .025 −.032 .006 −.062* .147* .029 .466* −.073* −.547* −.210*
(17) Inverse Mills ratio .089* −.231* −.144* −.128* .249* −.077* −.326* .012 −.241* .044 −.032 .179* −.682* −.138* .151* .160*
Mean 9.705 .5 .021 75.35 40.85 59.32 68.15 66.64 44.91 .469 .516 .696 10.58 .022 14.53 4.191 .743
SD 1.706 .5 .030 16.44 13.08 15.12 9.251 12.42 11.71 .097 .124 .328 .227 .028 4.361 3.016 .253
Min 3.791 0 0 7 11 5 20 23 4 .012 .007 .001 8.368 0 0 1 .131
Max 14.96 1 .218 88 100 100 91 99 97 .865 1 1 11.29 .181 23.52 14.17 3.542

*p < .05.
Notes: Sample size: 966 business customers; 1,932 observations (pre- and posttreatment periods).

11
12
Figure 2. Model-Free Results and Common Trend Analysis.
Notes: Given the relative growth rate calculated as sales revenues
generated with a customer in the current period divided by sales revenues
generated in the current plus past period, a sales growth rate of .5 reflects
no growth in sales revenues. As illustrated in this figure, sales revenue
growth varies across time, but follows a common trend across all four
customer groups before the price increase (treatment), satisfying a key
condition for the identification of our difference-in-differences model.
Notably, customers that experienced a high price increase show a
comparatively lower growth trend in sales revenues after the price increase,
providing first indications that particularly those customers may reduce
future business with the firm.
dummy variable reflecting whether the individual i pertains to the
control group (coded as 0) or to the treatment group (coded as 1);
POST is a time-varying dummy reflecting whether the observa-
tion is measured before (0) or after (1) the price increase; PPIM is
a time-invariant continuous variable measuring the magnitude of
the price increase; CultureModerator is one of three time-
invariant moderator variables measuring customers’ long-term
orientation, power distance, or masculinity; Controls are time-
invariant control variables on the B2B customer level and on
the country-level; ϵ is the random error component; the subscript
i relates to an individual B2B customer; the subscript j represents
the B2B customer’s country; and the subscript t reflects the
related time period (before or after the treatment) of the observa-
tion. Note that we mean-centered all moderators to ease interpre-
tation and z-standardized our control variables. Accordingly, b3
reflects the treatment effect of a price increase with average mag-
nitude and at an average value of the cultural dimensions, b4
reflects how the average (across cultures) treatment effect of a
price increase varies with higher magnitude (test for H1), and a
significant interaction term b9 indicates that the impact of price
increase magnitude varies with the particular cultural dimension
(tests for H2–H4). Variance inflation factors for included vari-
ables are less than 10, so multicollinearity is unlikely to be a
concern.
Journal of International Marketing 0(0)
Nested data structure. Given that we investigate data of two
periods from customers from different countries, our observa-
tions are nested within customers and within countries. To
account for the nested data structure, we estimate our DiD
models in a multilevel mixed-effects panel regression frame-
work (mixed command in Stata v. 17) and specify cross-level
interaction effects (Level 1: observations: pretreatment/post-
treatment; Level 2: customers; Level 3: countries). Note that
results also remain robust when estimating a random effects
panel regression without accounting for the nested data
structure.
Endogeneity account. The price increase was implemented for
products affected by an increase in raw material costs. Hence,
customers purchasing those products were subject to PPIs.
We account for the potential selection bias by applying a
Heckman selection correction (Heckman 1979) to our model.
To predict the customers’ probability of receiving a price
increase, we gathered and incorporated company data on mate-
rial costs per transaction for the time frame before the PPI.
Specifically, we calculated a growth rate of material costs for
all products bought by each customer over a time frame of 12
months before the price increase. The growth rate in material
costs satisfies the relevance condition, as it indicates the
choice of products to be subject to a price increase; customers
whose product portfolio exhibited higher growth in material
costs may be more likely to receive a price increase. Further,
it satisfies the exclusion restriction, as growth in material
costs is not directly related to sales revenues generated with a
customer, also supported by a weak correlation (r = .02). As
further control variables, we included all key variables from
our main equation, including the cultural dimensions and con-
trols. Results of the first-stage probit regression show that the
prior growth rate in material costs significantly increases the
probability that the respective customer received a price
increase (b = .070, p < .01). We compute and integrate the
inverse Mills ratio as an additional control in our analysis.4
Results
We estimated our models in Stata, version 17. Table 4 depicts
estimation results, and Figure 3 illustrates how the impact of
a PPI varies with price increase magnitude. In Figure 4, we
then depict how the slope of price increase magnitude varies
with cultural dimension. First, we find partial support for H1
that PPI magnitude has a negative impact on future sales reve-
nues with a customer, as indicated by the interaction of the
occurrence of PPI and its magnitude. The effect of PPI magni-
tude on future sales revenues is marginal significant in a model
without higher-order interactions (see Model 2, b = −4.047, p <
.10) and significant at an average level of the cultural dimen-
sions (Model 3, b = −5.07, p < .01). Given our log-transformed
4
Note that estimating our model without the Heckman selection correction and
inclusion of the inverse Mills ratio still widely replicates our key findings (see
estimation results without controls in Web Appendix C).
Friess and Kassemeier 13

Table 4. Estimation Results.

(1) Average Effect of (2) Effect of PPI
PPI Magnitude (3) Full Model
Dependent Variable: Sales Revenue with
Customer (Log) Hypothesis Est. SE Est. SE Est. SE

Difference-in-Differences Specification
Portfolio price increase (Y/N) (PPI) .182 (.113) .177 (.115) .165** (.082)
Postintervention-period dummy (POST) −.132 (.099) −.132 (.098) −.134*** (.045)
Portfolio price increase magnitude (PPIM)
Treatment Effect of Portfolio Price Increase
POST × PPI −.232 (.16) −.145 (.193) −.114* (.062)
POST × PPI × PPIM H1 −4.047* (2.42) −5.07*** (1.353)
Moderator: Long-Term Orientation (LTO)
LTO −.007*** (.002) −.007*** (.002) −.003 (.004)
LTO × POSTCL −.004 (.004)
LTO × PPICL −.011** (.005)
LTO × POST × PPICL .022*** (.009)
LTO × POST × PPI × PPIMCL H2 −.531*** (.183)
Moderator: Power Distance (PD)
PD .001 (.005) −.001 (.005) −.004 (.006)
PD × POSTCL −.002 (.005)
PD × PPICL .01 (.008)
PD × POST × PPICL .004 (.008)
PD × POST × PPI × PPIMCL H3 −.105 (.293)
Moderator: Masculinity (MA)
MA .004 (.004) .004 (.004) .009 (.006)
MA × POSTCL −.011*** (.003)
MA × PPICL −.005 (.006)
MA × POST × PPICL .007 (.005)
MA × POST × PPI × PPIMCL H4 .296** (.151)
Further Cultural Controls
Individualism −.031 (.02) −.031 (.019) −.030 (.02)
Uncertainty avoidance .001 (.007) .001 (.007) .004 (.007)
Indulgence .001 (.005) .001 (.005) .001 (.005)
Controls
Country’s GDP per capita (log) .237 (.16) .241 (.161) .219 (.143)
Sales growth rate 1 .021 (.018) .020 (.018) .013 (.019)
Sales growth rate 2 −.033 (.02) −.034* (.019) −.035* (.02)
Sales growth rate 3 .061 (.066) .060 (.066) .056 (.062)
Prior variance in purchase volume .489*** (.034) .491*** (.034) .486*** (.034)
Prior discount rates .398*** (.019) .393*** (.017) .400*** (.015)
Prior interpurchase time −.182** (.078) −.185** (.077) −.181** (.071)
Dummies for product categories, sales reps Yes Yes Yes
Inverse Mills ratio 1.407** (.582) 1.412** (.582) 1.465*** (.516)
Constant 12.53*** (2.394) 12.57*** (2.409) 12.12*** (2.42)
Akaike information criterion 6,698.95 6,696.50 6,695.50
Likelihood ratio test (p-value) .05 .01

*p < .10.
**p < .05.
***p < .01 (two-tailed).
Notes: Robust standard errors are in parentheses. CL = cross-level interaction. Control variables are z-standardized, and moderators (LTO, PD, MA) are mean
centered to ease interpretation. We estimated a multilevel mixed-effects linear regression using the mixed command in Stata (v. 17) to account for the nested data
structure. The average treatment effect on the log of sales revenues can be interpreted using the transformation of e(coefficient) – 1 = percentage change. For instance,
after a price increase with average magnitude, sales revenues with the affected business customer decrease by e(−.114) – 1 = 10.7% on average.

dependent variable, the percentage of decrease in sales revenues
can be calculated by the formula (e(Estimate) − 1) × 100. That is,
an average price increase of 2.1% (sample average) yields a
10.6% decrease in sales revenues, averaged across cultures.
Second, regarding H2, we find a significant negative moder-
ation between the average effect of a PPI, its magnitude, and
long-term orientation (Model 3, b = −.531, p < .01). That is,
in cultures with low long-term orientation, price increase mag-
nitude attenuates the negative effect of a price increase and
tends to have an increasing slope, although not being significant
(bSlope_low = 3.652, p > .10). In cultures with high long-term ori-
entation, a higher price increase magnitude strengthens the neg-
ative effect of a PPI (bSlope_high = −13.79, p < .01), in support of
H2. Figure 4 shows that at high long-term orientation, a larger
14 Journal of International Marketing 0(0)

Figure 3. Impact of Price Increase Magnitude on Sales Revenue.

Notes: The plot illustrates how the treatment effect of a PPI varies with
magnitude of the price increase at an average level of cultural dimensions.

price increase has a much more negative impact on sales

revenue than a smaller price increase, which can even benefit
future sales revenue when it is below 1.9%.
Third, regarding H3, we do not find a significant interaction
effect between the average effect of a PPI, its magnitude, and
power distance (b = −.105, p > .10); thus, we reject H3.
Figure 4 indicates that for customers with low power distance
a higher PPI may decrease sales revenue to a higher extent
than a lower price increase, yet the slope is not significantly dif-
ferent between customers with low or high power distance. In
an additional analysis, we test a nonlinear interaction effect of
price increase magnitude with power distance.
Fourth, regarding H4, we find a significant positive modera-
tion between a PPI, its magnitude, and masculinity (b = .296,
p < .05). That is, in cultures with lower masculinity, a higher
price increase magnitude further strengthens the negative
effect of a PPI on future sales revenues with a customer
(bSlope_low = −9.554, p < .01). Figure 4 shows that customers
from cultures with low masculinity are highly sensitive to
even small price increases (>1.5%). Note that in cultures with
high masculinity, price increase magnitude has no significant
moderation effect (bSlope_high = −.009, p > .10). Figure 4. Marginal Effect Plots for the Impact of Price Increase
We also tested for higher-order interactions between price Magnitude in Different Cultures.
increase magnitude and combinations of cultural dimensions, Notes: The marginal effect plots illustrate how higher price increase magnitude
leads to a stronger negative impact of a PPI in cultural conditions where B2B
yet found no significant effects. customers more likely rely on communal (than exchange norms). Low (high)
values of each cultural dimension reflect minus (plus) one standard deviation
from the mean of the respective variable.
Robustness Check
As an alternative to our random sampling and to minimize interpurchase time, prior discount rate, and dummies for
potential differences among the treatment and control groups product lines purchased to capture potential differences in the
(see Web Appendix B), we matched one comparable B2B cus- previous business relationships of B2B customers of the treat-
tomer with a price increase to each B2B customer that did not ment or control group. We employed nearest-neighbor match-
exhibit a price increase, using propensity score matching (Li ing without replacement in Stata (v. 17). Each B2B customer
2013). As matching criteria, we incorporated the three sales without a price increase is paired with the closest match regard-
trend variables, customers’ prior purchase variability, prior ing the previously mentioned characteristics. Rerunning the
Friess and Kassemeier
Table 5. Overview of Key Results.
Exemplary Country
(Score According to
Cultural Dimensions Hofstede Insights [2022])
Short-term orientation United States (26)
Long-term orientation China (87)
Low power distance Germany (35)
High power distance Russia (93)
Low masculinity Sweden (5)
High masculinity Japan (95)
Notes: No significant impact (“none”) suggests that the customer relationship becomes more profitable, but beneficial price increase effects are compensated for by
the hampered customer demand (reduced quantities sold).
a
Result derived from analysis of nonlinear effects.
analysis on the matched sample yielded robust results (see
details in Web Appendix D): the negative revenue effect of
higher price increase magnitude (1) negatively interacts with
long-term orientation (b = −.345, p < .01), (2) does not signifi-
cantly interact with power distance (b = .059, p > .10), and (3)
positively interacts with masculinity (b = .174, p < .05). Note
that we also find consistent results when employing a more
restrictive caliper matching, where only those customers
whose propensity scores fall into a particular range are
included, further reducing potential differences across groups.
Hence, our findings are robust against potential differences
between B2B customers with and without a PPI.
Additional Analyses
In an additional analysis, we investigate whether the magnitude
of a PPI has a nonlinear interaction effect with power distance,
instead of the proposed linear relationship (H3). To test this
complex higher-order interaction in a parsimonious model
and ease interpretation, we calculated three dummy variables
indicating whether a customer was subject to a low, medium,
or high PPI (each coded as 1; 0 if no price increase), determined
by splitting the treatment group at the 33rd and 66th percentiles
(see Web Appendix E for details). The three-way interactions
between each price increase dummy, the postintervention-
period dummy, and cultural dimension indicate how the
effect of different PPIs varies with power distance. Results
support a nonlinear interaction of price magnitude with power
distance. At low power distance, a low price increase does
not significantly affect sales revenues with the customer.
However, a medium price increase and a high price increase
reduce sales revenues at a similar level, although only the
former effect is significant (b = −.513, p < .01). At high
power distance, we only find a low price increase to signifi-
cantly reduce (b = −.319, p < .05) sales revenues. We further
elaborate on this finding in our discussion.
Discussion
Although price increases are a relatively common and often
necessary step for many B2B companies, prior research
15
Impact of Lower Impact of Medium Impact of Higher
Price Increase Price Increase Price Increase
Negative Negative None
Positive None Negative
None Negativea None
Negativea None None
None Negative Negative
None None None
investigating B2B customers’ reactions to price increases is rel-
atively scarce. The current study investigates how the magni-
tude of price increases influences B2B customers’ sales
revenue and whether and how this effect is moderated by busi-
ness customers’ long-term orientation, power distance, and
masculinity. In a quasi-field experiment with 966 business cus-
tomers of an international chemical commodity company, we
generated nuanced insights on the impact of the magnitude of
PPIs on B2B customers’ sales revenue in international contexts.
Table 5 provides a brief overview of the study’s key results.
Specifically, we identified three different avenues for the
future development of business relationships depending on
the cultural context. First, PPIs may decrease future revenues
with a business customer. That is, customer demand is drasti-
cally hampered, and PPIs cannot compensate for the losses in
purchase volume. For instance, we found that in cultures char-
acterized by low masculinity (especially Nordic countries, such
as Sweden [score 5]; Hofstede Insights 2022), high price
increases are particularly harmful. A small price increase can
harm future relationships with customer firms from countries
that are short-term-oriented (rather than long-term-oriented),
such as the United States (score 26). In the second scenario,
PPIs have no significant impact on future sales revenue gener-
ated with a business customer. In this situation, a customer’s
demand is hampered, but the positive effect of price increases
may still compensate for potential losses from purchase
volume. Although the price increase does not yield growth in
future sales revenues, higher prices per unit should result in
higher profit with that particular customer (given that costs
remain unchanged after the price increase). For instance, we
found that customer firms from cultures characterized by high
masculinity (e.g., Japan [score 95]; Hofstede Insights 2022)
do not significantly reduce sales revenues when confronted
with a high PPI. Still, the price increase likely renders those
relationships more profitable. Third, in the best possible case,
price increases enhance sales revenues with a customer. In a sit-
uation like this, customer demand is not tempered, and financial
gains from higher prices raise sales revenues. We only found
one condition in which sales revenues with a business customer
truly increase in the aftermath of a (low) PPI, that is, in cultures
with a high long-term orientation. Long-term-oriented cultures
16
include Asian countries, such as China (score 87; Hofstede
Insights 2022).
Theoretical Implications
Our study contributes to research on price increases and has impor-
tant implications for B2B sales organizations and international cus-
tomer account management. First, our study extends previous
research on price increases by adding a relational B2B perspective.
Prior research on price increases has focused particularly on B2C
markets (e.g., Homburg, Hoyer, and Koschate 2005; Lu et al.
2020) and provides initial insights on the consequences of price
increases in B2B markets for single-product price increases
(Bruno, Che, and Dutta 2012). We advance these insights by
investigating the consequences of the magnitude of PPIs on
B2B customers’ sales revenue in a typical B2B commodity
context. PPIs reflect a disruption of the relationship between the
supplier and its customers as these are unlikely to be compensated
for by suppliers granting concessions in other areas of the business
relationship. We find that B2B customers react more negatively to
PPIs with a high magnitude and that even low price increases can
harm customers’ revenues.
We suggest that this finding is in line with the relational
norms that B2B customers and their buyers apply when evalu-
ating the price increase. In addition to exchange norms, individ-
ual buyers should rely on communal norms and, thus, react less
negatively to low price increases. However, when price
increases are high, they are more likely to exceed the buyers’
price discretion or might not be in line with communal
norms. Therefore, high price increases limit B2B buyers’ reac-
tions based on communal norms. Thereby our findings show
that high PPIs can have detrimental effects on buyer–seller rela-
tionships and endanger customer–company relationships.
Second, our results indicate that the consequences of price
increases differ between B2C and B2B markets. Extant research
on price increases in B2C markets supported the dual-
entitlement principle by showing that price increases that are
aligned to cost increases are perceived as fairer by customers
(e.g., Bolton and Alba 2006; Kahneman, Knetsch, and Thaler
1986). Our study provides first insights into the consequences
of price increases that are aligned to cost increases in a B2B
market and reveals that price increases, although these occur
due to cost increases, can have detrimental effects on B2B cus-
tomers’ sales revenue. Thereby our findings indicate that the
dual-entitlement principle may only have limited validity in
B2B markets. This can be explained by the differences in the
relational norms that customers apply when they react to
price increases. Customers who evaluate price increases based
on communal norms are more likely to respond according to
the dual-entitlement principle than customers who evaluate
price increases based on exchange norms (Chen et al. 2018).
In B2B markets, customers are companies that should
respond to price increases rationally, so the reason for a price
increase does not affect their response. Even though B2B cus-
tomer firms employ individual human buyers who make the
decisions, they have limited discretion to react to price increases
Journal of International Marketing 0(0)
in line with their communal norms. Therefore, our results indi-
cate that the dual-entitlement principle is not unconditionally
valid in B2B markets and that price increases have negative
consequences even when they are rooted in cost increases.
Third, we contribute to research investigating how boundary
conditions influence the consequences of price increases and
thereby provide important implications for global account man-
agement and selling in international settings. Prior research on
price increases has investigated multiple B2C-related boundary
conditions affecting the consequences of price increases (e.g.,
Dawes 2009; Homburg, Koschate, and Totzek 2010; Lu et al.
2020). However, little is known about how B2B-related boun-
dary conditions influence the consequences of price increases,
thereby leaving managers unguided on whether and how to
adapt price increases to different customer segments. A key
boundary condition in B2B markets, in which companies
often sell to customers from different countries and cultures,
are customers’ cultural value-based dimensions. This study pro-
vides initial findings on how B2B customers’ cultural value-
based dimensions influence the consequences of price
increases. Importantly, our findings reveal that implementing
price increases uniformly across countries having different cul-
tural value-based dimensions can have undesired consequences.
We suggest that B2B customers’ relationship norms account for
these cultural differences. Specifically, the negative impact of
the magnitude of PPIs on business customers’ sales revenue
can be more pronounced if B2B buyers are more prone to
react in line with communal norms instead of exchange
norms. This is because B2B buyers who react to price increases
by relying on communal norms should react less negatively
when price increases are low (e.g., customers from cultures
with high femininity). Our findings extend prior knowledge
on price increases in B2B markets (Bruno, Che, and Dutta
2012) and on boundary conditions of the consequences of
price increases and reveal that the implementation of uniform
price increases across international business customers can be
detrimental to a company’s sales revenue because conse-
quences of price increases differ between customers’ cultural
value-based dimensions.
These findings not only are important for research on price
increases but also provide important implications for research
on global account management and selling in international
and export settings. This research remains scarce in exploring
the role of customers’ cultural values in the strategic manage-
ment of customers (e.g., Shi and Gao 2016; Shi et al. 2010).
We advance this research stream by showing that B2B custom-
ers’ culture reflects an important factor that needs to be consid-
ered when a company increases its prices. Future research on
how international sales organizations and their salespeople
implement price increases, therefore, needs to consider that
the consequences of price increases vary between customers’
cultural value-based dimensions. A potential avenue for
further research could be to explore whether customers’ cultural
values also explain differences in customer reactions if compa-
nies change further characteristics of their offering (e.g.,
product design, servitization).
Friess and Kassemeier
Managerial Implications
To cope with cost increases for raw materials (e.g., Abdelnour
et al. 2021; U.S. Department of Labor 2022), many companies
adjust prices to remain profitable. Particularly in the focal B2B
commodity sector, prices are exceptionally volatile (Vasishtha
2022). Our findings offer important implications for sales man-
agers and salespeople of international B2B organizations on
how to implement price increases while preventing undesired
consequences.
First, we suggest that B2B sales managers need to be very
careful when implementing price increases for international
customer firms, even when the increases are justified by
higher upstream costs. Our evidence from the B2B commodity
sector suggests that the potential profit effects of higher prices
may not outweigh losses in customers’ demand, particularly
when price increases are high. Managers should carefully
weigh the degree to which they place their financial burdens
on customers by increasing prices or bearing them themselves,
as long-term losses in highly valuable relationships could be
more severe than shortcomings in profitability.
Second, international sales managers should rely on cultural
value-based dimensions to segment customers as well.
Although predominantly reflecting a segmentation variable
for B2C markets, our findings provide further justification
that cultural backgrounds are also decisive in influencing busi-
ness customers. For instance, our results reveal that in markets
wherein customers have a high long-term orientation, low price
increases are an effective means of raising revenues; in cultures
with low power distance, even a medium price increase can
harm future sales revenues; and high price increases should
be particularly avoided in markets in which the customers’
culture has low masculinity, as the price increases severely
harm future sales revenues. Considering these matches prevents
sales managers and salespeople from making the mistake of
implementing price increases uniformly, and enables them to
individually design price increases effectively to not only
improve profit but also safeguard or increase sales revenues.
Third, finding that international B2B customers react very
differently to price increases yields important implications for
personal selling in international markets. On the one hand,
sales managers should train international salespeople to be
more sensitive to communal norms dominant in certain cultural
contexts. For instance, when higher price increases violate
norms of solidarity, salespeople may take the opportunity to
offer appropriate compensation that confirms the norm (e.g.,
in terms of special treatments or particular service, if applica-
ble). On the other hand, sales managers may consider compen-
sating salespeople whose international customer relationships
are threatened by company-wide price increases, particularly
when price increases are strategically mandated. As indicated
by this study, price increases have the power to dissolve
trusted business relationships and hard-won achievements of
salespeople, which may not only limit their financial income
(if compensated on a variable basis) but may also result in dis-
satisfaction and inner withdrawal. Here, too, it is not to be
17
expected that salespeople will be content with high price
increases being justified on the basis of higher upstream costs.
Limitations and Future Research
Our study has certain limitations and provides avenues for
future research. First, the price increase being investigated is
rooted in an increase in costs. Hence, we are not able to differ-
entiate between justified and unjustified price increases. In line
with the dual-entitlement principle (Kahneman, Knetsch, and
Thaler 1986), one may propose that unjustified price increases
yield even stronger, negative effects on future sales revenues.
To explore this matter and how it may be moderated by cultural
dimensions, future research could directly compare justified and
unjustified price increases and their consequences for interna-
tional B2B customers.
Second, given data constraints, we were not able to differen-
tiate products with or without a price increase by qualitative
characteristics, such as their importance to customers’ value
creation, substitutes in the market, or complementarities (e.g.,
Huber, Holbrook, and Kahn 1986; Wakefield and Inman
2003). One may assume that the demand-hampering effect of
a price increase is likely related to customers’ switching
costs, which are (among other factors) defined by the opportu-
nities and costs to source alternatives. The effects that we have
found in the B2B commodity context may be weaker if prod-
ucts are critical for customers and hard to substitute.
Furthermore, while we investigate a single, typical B2B firm
context (chemical commodity supplies), price increases may
have different effects for supplying firms with different strategic
orientations (e.g., cost leadership), from different industry
setups (e.g., mono- or oligopolistic), or with different business
models (e.g., complex, idiosyncratic business). While we
expect these factors to have similar influences across cultures
as they relate to transactional rather than communal factors,
we still propose that future research investigate the potential
moderating impact of product, business, and industry
characteristics.
Third, we matched cultural dimensions according to the
country of the sourcing firm and do not explicitly utilize the
firm’s headquarters as a reference. Although headquarters’
codes of conduct may influence customer decision making,
the culture of the local buying team might be more important
for investigating the impact of a price increase on local purchase
decisions. Still, we conceive it as a promising future avenue to
investigate whether our findings differ when the cultural dimen-
sions of the sourcing firm and its headquarters match (or do not
match).
Fourth, against our expectations, customers from cultures
valuing communal norms sometimes react even more nega-
tively to high price increases. We suggest that these buyers
may not only apply communal norms to a lesser extent when
facing high price increases, but may also feel that the supplier
has violated their communal norms (such as solidarity in cul-
tures of low masculinity). Accordingly, they may react with
hostile, punitive actions against their supplier (e.g., Kaufmann
18
and Stern 1988; Kumar, Scheer, and Steenkamp 1998) and
reduce business with the supplier. Future research could inves-
tigate this unexpected result further.
Fifth, against our expectations, the magnitude of the PPI
does not linearly strengthen the negative effect on sales
revenue for business customers with low (compared with
high) power distance. Instead, we find a saturation effect.
That is, for customers with low power distance, sales revenues
similarly decrease after a medium and a high price increase (see
additional analysis). At this point, we can only make assump-
tions on the potential reasoning for this intriguing finding: On
the one hand, a medium price increase may already cause a
maximum (reasonable) retraction of business with the supplier.
In this case, customers’ power distance could turn out to be a
very sensitive moderating factor for the impact of price
increases. On the other hand, the extent to which PPIs
hamper demand may be less pronounced for these customers,
and the positive profit impact of a higher price increase may
fully counterbalance demand-hampering effects. We call for
future research to investigate more deeply how customers
from low power distance cultures react to PPIs to provide
even more precise guidance for managers on international
pricing decisions.
Special Issue Editor
Alex Zablah
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to
the research, authorship, and/or publication of this article.
Funding
The authors received no financial support for the research, authorship,
and/or publication of this article.
ORCID iDs
Maximilian Friess https://orcid.org/0000-0003-3575-0808
Roland Kassemeier https://orcid.org/0000-0001-9925-1835
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 Consumption Markets & Culture

ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/gcmc20

Decolonizing marketing

Giana M. Eckhardt, Russell Belk, Tonya Williams Bradford, Susan Dobscha,

Güliz Ger & Rohit Varman

To cite this article: Giana M. Eckhardt, Russell Belk, Tonya Williams Bradford, Susan Dobscha,
Güliz Ger & Rohit Varman (2022) Decolonizing marketing, Consumption Markets & Culture,
25:2, 176-186, DOI: 10.1080/10253866.2021.1996734

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CONSUMPTION MARKETS & CULTURE
2022, VOL. 25, NO. 2, 176–186
https://doi.org/10.1080/10253866.2021.1996734

Decolonizing marketing
Giana M. Eckhardta, Russell Belkb, Tonya Williams Bradfordc, Susan Dobschad, Güliz Gere,f
and Rohit Varmang
a
King’s Business School, King’s College London, London, England; bKraft Foods Canada Chair in Marketing, Schulich
School of Business, York University, Toronto, Canada; cPaul Merage School of Business, University of California,
Irvine, CA, USA; dDepartment of Marketing, Bentley University, Boston, MA, USA; eFaculty of Business
Administration, Bilkent University, Bilkent, Turkey; fSkema (MINT Research Center), Lille, France; gBirmingham
Business School, University of Birmingham, Birmingham, England

ABSTRACT ARTICLE HISTORY

In January 2021, the ETHOS Research Center at Bayes Business School, Received 1 September 2021
along with the CRIS Research Center at Royal Holloway University of Accepted 15 October 2021
London, hosted an event entitled Decolonizing the Business School.
KEYWORDS
Over 500 attendees participated, from all business disciplines, testifying Decolonization; marketing;
to the strong levels of interest in this topic. Marketing was particularly colonialism; capitalism;
active, with over 100 participants. In this article, I (Giana Eckhardt, one pedagogy; research
of the organizers of the event) speak with the marketing break out
room facilitators – Russ Belk, Tonya Bradford, Susan Dobscha, Güliz Ger
and Rohit Varman – in a wide-ranging conversation about what
decolonization means to the field of marketing, and what marketing
academics can do if they would like to explore these ideas further. First,
we offer a brief introduction to decolonization. Also, a list of resources
for the interested reader is presented as well as ideas for further
exploration in this nascent domain at the end.

What is decolonization?
Decolonization is a movement which seeks to identify colonial histories that inform our curri-
culum and our pedagogical practices and challenge them (Banerjee 2021). It acknowledges that
colonialism is and was integral to capitalism and seeks to link structures of colonialism to the
curriculum. Capitalism in its different forms- colonial, slave, mercantile, financial, market – has
used racist logic to demarcate whiteness from others and to distribute wealth and privileges
along racial lines. As Dar et al. (2021) observe, capitalism is racist and educational institutions
like universities and business schools within them that reproduce its ideology should be
critiqued.
Western universities are a key site through which colonialism and colonial knowledge are
produced, institutionalized, and naturalized (Bhambra, Gebrial, and Nişancıoğlu 2018). There
is a need to not only deconstruct but also transform such a system of knowledge. Such trans-
formations will require critical reflexivity in knowledge production and dissemination to enable
political praxis. The structural consequences of colonialism and racist capitalism, for example,
can be taught in the classroom in relation to issues like climate change (Banerjee 2021). Deco-
lonization involves a paradigm shift from a culture of exclusion, furtherance of capitalist social

CONTACT Giana M. Eckhardt giana.eckhardt@kcl.ac.uk Professor of Marketing, King’s Business School, King’s College
London, London, England
© 2021 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/),
which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
 CONSUMPTION MARKETS & CULTURE 177

relations, and denial of history, to make space for other political philosophies and knowledge
systems. It is a structural shift to think more widely about why common knowledge is what
it is, and in so doing adjust socio-economic structures and power relations in real and signifi-
cant ways (Keele University 2018).
Decolonizing is not about assimilating new material from non-Western locations into existing
theories. Rather, it is about questioning the underpinning of those theories and acknowledging
that there may be multiple ways of knowing and doing. Bannerjee, Rodriguez, and Dar (2020)
identify the over-representation of white academics in business schools, the use of English as the
dominant language of business, along with the fact that the most powerful business schools are
located in North America and Europe, as some of the ways in which colonialism still manifests
itself within business schools. Decolonizing requires epistemic shifts by interrogating the domi-
nant Eurocentric perspective and critiquing the theoretical canon that reproduces it. It also
requires a critical evaluation of research questions, how such questions are examined, and
who benefits from the knowledge claims. Kelly and Hrenyk (2020) remind us that business
schools and the scholars within them also have fingerprints on climate crises and racial and
social injustice, as they are both a tool for, and a product of, shareholder-centric, profit-maxi-
mizing and extractionist economics. Moreover, as Varman and his colleagues observe, decoloni-
zation is about challenging capitalism and interrogating corporate exploitation (Varman and Al-
Amoudi 2016; Varman and Vijay 2018).
Crucially, decolonization is not only diversity and inclusion. Rather, it seeks to disrupt status quo
ways of thinking and teaching, not simply include a more diverse set of people in the same conver-
sation. Within consumer research, Consumption, Markets and Culture has been a pioneer in this
space, publishing some of the first articles which interrogated whiteness as a marker against
which other cultures become the “other” (Burton 2009) and revealing how contemporary advertise-
ments suggest inferior African “otherness” (Bonsu 2009). In particular, Bonsu (2009) shows how
the brutality of colonialism in Africa is perpetuated in contemporary ads. In light of the Black
Lives Matter movement which has received greater prominence beginning in 2020, conversations
around racial justice have become more prominent within business schools and in the field of mar-
keting (Bruce et al. 2020; Poole et al. 2020). A decolonization perspective suggests that anti-racism
cannot be framed as a diversity project without understanding the colonial structures of racial injus-
tice that created the slave trade, and which continue to underpin the logic of many business
practices.
Ultimately, engaging in decolonizing may be confronting and uncomfortable and involve
unlearning our own privileges as business school educators (Banerjee 2021). Next, we explore
these issues and approaches within marketing in our conversation, recorded over Zoom in Feb-
ruary 2021.

What is decolonizing within the marketing discipline?

GIANA: What does decolonization in marketing mean to you?

GÜLIZ: I want to make a distinction between working, living, teaching, and doing research in the south versus
in the north. Being from the south, first and foremost, I start thinking about what are the things I can do agen-
tically, versus what are the structural restraints and constraints that are beyond my reach. What I can do is first
and foremost is deal with my own colonized mind. I’ve been educated starting from high school in English,
and I teach at an institution where the teaching medium is in English. The top universities in Turkey all teach
in English. The mindset in these universities is that we must use the same textbooks that the top US schools
use, have the same curriculum. There is, in the professor’s and the student’s mind, and the Board of Trustee’s
mind, this notion that the best education is done if it’s in English, and if it follows the norms of top universities
in the U.S. What I try to do first and foremost is find ways to deal with my own colonialized mind and use that
as a way to have an engaging discussion with my students to try to open them up to think about their own
colonialized minds, their parents, and the institutions around them. Students want jobs in global corporations.
178 G. M. ECKHARDT ET AL.

As Erkmen (2018) finds, working in one is a means of distinction at the global level. Reflecting on our colo-
nized minds pertains to teaching materials, teaching examples, the content, as well as the process of teaching.
The process of teaching for me is also very important, because every discussion, every example, every question,
I need to think in terms of not just the content that I want to teach, but also this critical reflexivity about not
just coloniality, but other dominance and power related issues as well, which are obviously related to each
other. I think if we carry this mindset to our research, it will help us in our teaching, and they will feed off
of each other. I try to reflect about coloniality and other power dynamics, which is in almost every piece of
research that I do. Everything that I write, whether it is about coloniality or not. And unless I do that, I
don’t think I can deal with my own colonized mind. Accordingly, I try to engage my students in discussions
and activities which I hope will develop their critical reflexivity. I also frequently ask the question of “who will
benefit and who will lose from the outcomes of what you, as a manager, do or don’t do?,” for example, when
we work on cases.

SUSAN: I think first of all, we need, not a standard definition, but we need a working definition of decolo-
nization that is understood across business schools, or across our areas of interest in business schools. For,
in my mind, if you’re going to export this big umbrella idea, you have to have some anchoring point of
what we mean. The first thing I learned is when I brought it up to other people, they all had different perspec-
tives on what it meant. A colleague who is from one an upper caste in India, and she’s lesbian, and she had a
whole different view of what decolonization meant than what I thought it meant. I thought it was much more
of this north/south thing. The way she described it was more about the diaspora. That there’s a silencing of
thought processes. There’s a silencing of our ontology of how we’re learning as a result of colonization. Like
there used to be this idea of seven genders. And that when India got colonized by Britain, their much stricter
rules about male/female biological sex were imposed on Indian thought to where the seven genders were
silenced. For me, I think going forward, we need some sort of grand vision of what we mean by this, so
that if I start to talk about this in a meeting, and a pricing professor says “What’s that?” I can say in a very
simple way what we mean by this.

GIANA: Good point Susan. I would agree with the idea that it’s not necessarily a north/south thing. Issues of
racial justice for example, which are taking place in the U.S., UK, and many other places, a lot of people would
put under the umbrella of decolonization. The danger, though, of coming up with one definition of decolo-
nization which everyone understands as the same thing could create the opportunity for reification, where
everyone is like “Oh now I have to do 1, 2, 3 in order to decolonize,” rather than giving it the introspection
and critical thinking that it deserves. But at the same time, I agree that being able to explain it to interested
parties who want to know more is important. Rohit, do you want to weigh in?

ROHIT: I completely agree with Susan, that we need to have some idea of what we mean by colonialism. Colo-
nialism is a very complicated and vague term. As Dirlik (2002) points out, all history is colonial history. The
very idea of civilization, the very idea of human settlement is about colonization. People have gone around,
settled in places, and colonized other people. It is something which can be potentially very vague and very hard
to define. I’m assuming that when we talk about colonialism in this setting, and when we have more contem-
porary debates on decolonization, we are talking about European colonialism. In many ways, it goes back to
the north/south question. And surely aspects of transatlantic slavery and racial relationships can be subsumed
under the umbrella of European colonialism. It’s important to understand which colonialism we are talking
about, and we also need to then have a sense of what is it that we mean by decolonization. For me, decolo-
nization is about questioning the role of the West. It’s challenging the kind of Eurocentrism that prevails in the
discipline. But also there’s another important aspect that I would like to highlight, and which is central to my
reading of decolonization–it is the idea of anti-capitalism. European colonialism cannot be understood, it is
incomprehensible without reference to capitalism. And hence any attempt to understand decolonization has
to be simultaneously anti-capitalist.

Moreover, if you really read about colonialism, I mean if you understand some of the historical
moments; for example, if I look into colonialism in India, British colonialism, it was not possible
for the British to come in and to colonize such a large nation without there being a very active par-
ticipation of local interests. If you read somebody like Mbembe (2002) for example, on African colo-
nialism, he rightly points out that colonialism was always a co-invention. Yes, it was western
violence, but also there were all these local interests that contributed to it. And if we start under-
standing some of these local interests, we’ll see that there were aspects of commercial interest,
there were aspects of capitalism, and hence colonialism and capitalism are very closely tied to
each other. In my reading, we need to challenge the hegemony of the West, but also simultaneously
challenge capitalism.
 CONSUMPTION MARKETS & CULTURE 179

Decolonization in the marketing/consumer research classroom

GIANA: To follow up on these issues that Rohit brought up – capitalism being something that is a central
point to understanding colonization and decolonization – how would you bring out a point like that in the
classroom? Or other points which are important from a decolonization perspective?

SUSAN: I just taught semiotics today. Semiotics is a really easy place to incorporate these ideas. When you’re
talking about assigning meaning to objects, cultures have different meanings for different objects. The
example I used in class today was if I hold my fist up like this, what does it mean to you, right? And a Chinese
woman said, “This means I make a pledge.” So that was a great example of if a brand were to use this fist like
this, which in the U.S. has this historic symbolism of black power, then the brand would be buying into one
interpretation of this symbol. I think semiotics is one place that you can unpack some of this when you talk
about how does a brand assign meaning. Vis a vis a celebrity endorser or a symbol or an image. We’re going
through a reckoning of that in the United States. All of our racist brands are changing their symbology. And
pretty quickly too. Given that they’re a hundred years old, you know. It was just this important moment in
time where people are understanding the symbolism of an Aunt Jemima, you know an Uncle Ben, Mrs.
Butterworth.

GÜLIZ: I took your question to mean how do you deal with the issues of bringing in capitalism and coloni-
alism while teaching a marketing topic. What I do is I try to have 15 min on the dark side or dark history of
whatever the topic is. For example, if it’s about promotion/advertising, I bring in the de Beers “Diamonds are
forever” story. And we discuss the advertising story in the backstage of diamond mining in South Africa – use
of black prisoner’s free labor, the occupation of the mining lands by the British empire, and the connections to
the founding of apartheid in South Africa. All the while when diamonds are linked to love and romance in our
minds. I bring in the supply chain and King Leopold. When I talk about supply chain, you don’t have to dis-
cuss it for long, just a little video on how the supply chain has always been global, with slavery, and the cutting
off hands that Leopold did in Congo. Each week’s lead topic has a 15, 20 min dark side of branding, dark side
of promotion, dark side of product development, where I can bring in these things. Child labor, slave labor,
ancient and today, current day slave labor as well. Soap and skin whitening, you know Lifebuoy Men, Lux
Women, Burke’s (1996) work, and many others. I try to weave in the invisible connections of the modern
stage of marketing to (post)colonialism and global capitalism. Whitening products, whatnot.

And I try to use bottom of the pyramid examples. When you use bottom of the pyramid examples,
you get into the social classes, lower classes and upper classes. Then when you begin talking about
classes and bottom of the pyramid, lo and behold, you get into neoliberalism and capitalism. You
bring in how capitalism shapes the class formations within countries, and how capitalism shapes the
power dynamic across countries. National versus local firms. So then I put a tiny little blip of neo-
liberalism, a tiny little thing on capitalism.
GIANA: I wonder how useful it is to characterize the consequences of marketing activities as the dark side.
Obviously they are negative. But rather than framing them as, how can we try and mitigate the consequences,
instead teaching them as fundamental to how these marketing outcomes come to be. Rohit, I know you’ve
done research in this area examining violence in supply chains. Do you try and bring this out in the classroom?

ROHIT: Yes, in my classes I try to consistently raise these issues. For me, the most important task is to create a
certain political grammar which is missing in business schools. And I can tell you, having taught both in India
and in England, that it is a challenge. It’s so completely depoliticized, most conversations that happen. As
somebody who works in the area of critical theory, the biggest challenge is to bring in some consciousness
about ideology. Some recognition of what is dominant and how the current zeitgeist works. And what you
realize is one of the key challenges there is what Gayatri Spivak (1999, 2) would call “the system of sanctioned
ignorance.” For example, while teaching in India, what you realize is that students are keener to know and
learn about the west. They’re keener to learn about the U.S. as compared to their own local setting (see Var-
man and Saha 2009). Because so much of what is seen as legitimate, so much of what is seen as the right way of
learning the tools, whether it’s marketing tools or in any other discipline within business schools, so much of it
is very Eurocentric and very Ameri-centric. That’s a very significant part of the battle where you need to con-
stantly bring in local issues, you need to challenge the dominance of a western thought processes. Güliz talked
about how going to the west, or being educated in the west is an issue. Or English language is an issue. But this
is far more deep-seated. The very sense of self is colonized, there’s a need to refer constantly to the West to
define yourself. Especially when it comes to the Indian elite. It is deeply entrenched. How we challenge it
becomes one of the important questions.
180 G. M. ECKHARDT ET AL.

I teach a course on social marketing. And what I try to do is start by talking about how subor-
dination and exploitation are inherent to capitalism. I try to give various examples. If you look at
how social marketing is structured, as an area of enquiry and how it is taught, most textbooks are
very narrowly focused on the quotidian project of broadening the concept of marketing. It’s all
about, feel free to use marketing to screw the world, but you should smoke with a certain sense
of responsibility, or drink with a certain sense of responsibility. That is the broader agenda. It
becomes important then, within this agenda, to bring in some of the social issues, some of the pol-
itical issues that are of significance. The second element for me which is important is to constantly
historicize what I’m teaching. As bell hooks (1989, 17) points out, much of our “struggle is also a
struggle of memory against forgetting.” We need to somehow get that historical memory back of
what has happened. I try to anchor around an essay on modern slavery, and that gives me an oppor-
tunity to prescribe readings on transatlantic slavery, on colonialism. It opens up conversations on
some of these aspects, some of these historical aspects, and some of these contemporary issues, of
exploitation. This is how I try to bring in some of these issues and to create conversations on the
question of coloniality and related forms of exploitation.
GIANA: To follow up on one of your points, you mentioned that students, and I would say in particular MBA
students who are paying a lot of money to get their degree, wherever they are in the world, often have this
attitude of, what I’m paying for is to understand best practices. How do you think these kinds of conversations
can be brought up in class, and how can we embed these vocabularies and examples in our classes? Beyond
that, how can we get a business school audience to recognize that this is something that they do need to under-
stand in order to be successful in the world after their degree? Things like the Black Lives Matter protests have
made it a little easier for students to see that this is not something that can just be ignored while they figure out
how to make the most money. But at the same time, I struggle with how to overcome that hurdle in the class-
room. I’m wondering if you have any thoughts on that.

GÜLIZ: Well I’m going to be rather pessimistic on that. I don’t think we can move from what I can do in my
class to what I can do in my business school, because the business school is under the hegemony that Rohit has
been talking about, and that I have been experiencing. To get to them, I think we need to get at an even more
powerful set of constituencies. People who write the mainstream books. You know, Phil Kotler himself should
be part of this discussion. Kotler himself should be writing about and discussing coloniality. Only then will
business schools start accepting some of these topics as legitimate topics, or legitimate concerns for a business
school.

RUSS: We have a program at Schulich (Business School, at York University). We have two actually. One is a
series of webinars called Leading Through the Pandemic. What I turned that into is, what can we do in terms
of pivoting to big issues at this point, given the catastrophic disruption. And so, income and equality, Black
Lives Matter, and climate change are the three big ones that I address. The other program we have is particu-
larly addressed to Black Lives Matter. That is particularly focused on what it means to business schools.

Also, I’ve got three types of people in my classes. I teach mostly at the graduate level. I’ve got
about equally represented Canadians, Indians, and Chinese. As well as second generation Indians,
and Chinese, and third and fourth generation, in some cases. Canada had this horrible policy of not
admitting that there was slavery in Canada for over 200 years. And furthermore, they have this
idealistic story that’s in all of the grade school books about the underground railroad. Canada
was the terminus for that, and so Canada was wonderful and the United States was evil. It was paint-
ing this very unrealistic portrait. The real shame these days in Canada is first nations people, indi-
genous people. And that’s a global issue. Australia and Canada are bad, and the U.S. is really bad.
We had residential schools that robbed children of their names. There was lots of sexual abuse; and
it robbed that robbed them of their language, it robbed them of their heritage basically. And that too
is something that is not taught in school. But what I do with those three groups of people, I’ll try to
have Canadians tell their story as best they can, and it’s amazing how many of them don’t know
these basic historic facts. For Chinese and Indians, the situation is a little bit different. I ask the
Indians to tell me about what colonialism was like, what was independence like, what are class
relationships like now. China on the other hand is different because they were officially never colo-
nized, but they had their treaty port cities of Shanghai and Hong Kong. And there the enclaves were
 CONSUMPTION MARKETS & CULTURE 181

horribly racist, they were reportedly signs up in a Shanghai park that said no dogs or Chinese
allowed. The people who were liaisons between the local Chinese and the foreign traders were
seen as being traitors themselves, so the division in society began as it did in India to some degree
with training certain Indians, or in this case certain Chinese, to be pseudo colonialists. That is actu-
ally something that Rohit and I are writing about. But what I try to do after that is compare the
Chinese and the Indian experience, and what it was like. Where the Indians are blind is to class
relationships. And with regard to treatment of lower classes. It’s not always race per se, but it is
class that comes into the Indian context. And in China, it tends to be the treatment of ethnic min-
ority groups by the Han Chinese. Those are some of the things that I do with those primary ethnic
groups that constitute my student population.

GIANA: Thanks Russ; you use tools of self-reflection to facilitate critical thinking in the classroom. Tonya,
would you like to share your perspectives on decolonization and some things that you do in the classroom to
help bring out these issues with your students?

TONYA: When I present in the classroom, I am often, with my presence, causing discomfort to some and
awareness to others. Just that presence is something that I have to introduce to students in a way that they
can accept me. I have to have a credentialing experience with the students, so that they actually can listen
and take whatever I have to say as valid. That is a very different experience, I would imagine, than any of
you have in the classroom. Maybe Rohit if you have something similar, I’m not certain. But that’s where
we start. And, what ends up happening for me is that I tend to bring in examples from non-majority cultures
throughout every lesson. Sometimes students will say things like usually the first week, “I’ve never seen that.”
That begets the conversation of ‘why do you think you’ve never seen that? What do you think the purpose of
this is?’ We do this pretty much every week. By the time we get to segmentation, probably week four, they start
to understand these notions of segmentation and what does that really mean. That’s when we can start having
conversations around what is the implied majority or target consumer, and why is it not spoken of, and every-
one else is a segment.

Then we can bring that through all the rest of the class, which can be challenging. The good news
is that at UC Irvine, we have a very diverse group of people from around the world. I’m able to bring
in things from around the world in a way that allows people to recognize their culture in a positive
way. This makes it easier to ask my students to share things that are negative within their culture, or
perhaps share things that are uncomfortable to talk about. This can be challenging for people that
are from those minority populations. What I don’t want to do is have an individual feel as if they
have to represent the entire voice of their culture, because that’s also uncomfortable. I often will take
on that role of representing different voices, or minority voices in other majority cultures. That
tends to give people permission to talk about it more. I realized when I was teaching at the Univer-
sity of Notre Dame with primarily white students that when there is the rare minority student talk-
ing about their experience, the student could be looked down upon. I never wanted to further
“other” people who already felt othered in the classroom experience.

GIANA: Tonya, one of the things that Rohit brought up was this idea of being able to create a new vocabulary
in the classroom. And introducing new concepts, new ways for people to think and understand how capitalism
can be at the root of a lot of this. Do you struggle with that in the classroom, or have any ways in which you try
and facilitate that?

TONYA: It’s always hard when you have your majority students that are saying things like “well, this is how it
is.” To recast that language and say, for some people, this is the experience of what might be and that there are
other experiences too. The dominant view may be “this is the standard and everything else has to measure to
that.” It’s a very careful way to challenge dominant views, and very subtle. By week five, they start understand-
ing that there are different lenses through which to see the world. I love to bring in examples from places like
South Africa, or even India, where the majority culture is not white or Anglo. They start to see ‘oh wow, okay,
this is, this is how this is positioned in another country.’ And they’re not familiar with those products usually,
182 G. M. ECKHARDT ET AL.

or the cultures. It provides opportunities to talk about topics like what makes that positioning possible or
makes that market possible. It’s really interesting when we speak about capitalism. I know I spent the first
17 years of my career in financial services. And if you think about the basis of financial services and every
financial vehicle that we have has its roots in enslaved labor. When you’re talking about capitalism, you’re
basically talking about financial instruments used to enact trade, which are rooted in stolen people’s labor.
You can bring it up, but again, you have to create an environment where people can embrace that, and it’s
hard to do in a 50-minute class; you need much more time for that. It has to be nuanced in such a way that,
particularly for me as a black woman, I’m not coming to the front of the class saying, “you people did this to
my people.” Rather, “what might be some of these moral considerations,” and “how should we as people
working in organizations trying to address wants and needs, how do we consider all of these other facets
as well?”

The future of decolonization in marketing

GIANA: I want to follow up with point that Güliz made earlier, “Phil Kotler should be here having this con-
versation with us.” What would make our job easier is if these issues can be brought up in the textbooks that
are the standards in business schools around the world. What do we see as the future? Decolonization is some-
thing, at least in the discipline of marketing, that is very much at its inception. Most of our colleagues aren’t
sure what it is, or how to incorporate it into what they’re doing. How it fits into their learning goals. How to
take consideration of these issues into their research. As awareness of decolonization starts to grow, and hope-
fully more people do see how and why this would be important, what are some ways that you think that this
could be facilitated in the future?
SUSAN: I am working on a project where we have developed a framework that we have tested and has
been proven to work. It addresses how you introduce these topics into the classroom. We have found in
our research that from day one, you encourage what we call a balanced frame of reference. And I think
this is what Güliz is doing. At the beginning of her class she’ll say, okay, so there’s this marketing
dilemma, right? So, that there are two sides to the issue that we’re discussing today. There’s the positive
side, but there also is this dark side. And what we found is all the textbooks are all positive. This gets back
to the discussion of Kotler. Students are not given a balanced frame of reference. They’re given a very rosy
frame of reference. Marketing solves problems, and marketing helps with ROI. If you create this environ-
ment in your classroom where you’re showing both sides, it actually stimulates transformative learning,
which is learning with a behavioral intention to change something later on. I encourage people to
think about this. Instead of being like, marketing’s bad, and then let’s talk about marketing. It’s more,
marketing can have positive and negative consequences. It allows us to start to build on a level of trust
with the student, where you’re willing to critique marketing, and they’re learning that at the beginning.
And then you give them the tools to then critique it themselves, which is the third stage, the perspective
gathering.

This is a really important process issue. We’ve talked about three different things, process, content,
and structure. All three of those are equally important. Some of us focus on content. Russ is a big
content person, his content is structured in a way to bring awareness. And then Güliz is talking in
terms of structure. Like okay, I’m going to start the day with this problematizing of a marketing
concept. It’s important to think about it in those three ways. And my second point is, we need
to clean up our own house. I’m getting very annoyed in general with, especially in the Black
Lives Matter movement, people making broad declarations. Like Nike donating $250 million to
end systemic racism. But they’re not cleaning up their own house. I feel like if we don’t clean up
our own house, we don’t really have any right to go out and talk about de-colonialization. If we
don’t decolonize our departments, our admin structures, our dean structures, if we don’t decolo-
nialize ourselves, then it’s very difficult to then go forward and talk about the decolonization of mar-
keting. Instead of saying we’re going to create content that gives students this balanced perspective,
we need to do it ourselves in our own structures.
TONYA: I think we have to do a little bit of both though Susan. I appreciate that notion, but what it takes
to make our institutions look more like the world is a longer strategy than how do we get the students
coming through our institutions to have a broader mindset. We have to do both. The challenge is tapping
those people
 CONSUMPTION MARKETS & CULTURE 183

who might have the good skillset to do it in a way that is not, “this is the cod liver oil they’re making me take.”
The reality is not everybody’s going to be capable. We’re having this conversation as if everyone will be equally
adept at doing this, and it’s not the case. You know some people are going to have a broader world view than
others. Others just aren’t going to care. And there’s some that the comfort of privilege is too great to disrupt.

RUSS: One thing that can help is to sneak up on people. The Neill Blomkamp film District 9 is about a group
of aliens from outer space who come – and this is a South African Director – to earth and they’re basically put
in these prison camps and treated pretty much like slaves. There are derogatory names for them and so forth.
It represents not only the experience of slavery, but the experience of apartheid in South Africa. You’re a third
of they way into this film before it dawns on people. Another way I sneak these issues into classes is talking
about robot rights. Now that may seem pretty far removed from decolonializing the curriculum, but robots are
being used without consent. Sex robots, in sex brothels. There are robots which are particularly made to resist
so that the users can reenact their rape fantasy. There are others that are child robots that can enhance ped-
ophilic activity. Because they’re just robots, people will say well, they’re just things. And yet there’s a move-
ment for robot rights right now. There’s a movement against robot slavery. There’s several eloquent
spokespeople for these things. But people can talk about these openly and can criticize one another and
can argue back and forth. And sometimes sneaking up on people is better than hitting them on the head.
So subtle ways like that can work.

ROHIT: If I can come in. Going back to the point that Güliz is making about how Kotler has to come in and
has to talk about how marketing can be decolonized. As I see it, we can’t really change our classroom conver-
sations without altering or without challenging some of the fundamental structures of knowledge in the dis-
cipline. And if you look at the way the discipline is, it suffers from the problem of whiteness, it suffers from the
problem of western hegemony, it is completely pro capitalist. And these are some of the very fundamental
problems that we need to challenge. Unless we imagine the discipline in a different way, our classrooms
are not going to transform. Our classrooms are reflections of how we imagine the discipline.

GIANA: Do you have any ideas of how we can start that process of transforming the discipline?

ROHIT: Well we need to have more of these conversations. But what I’m trying to say is, these conversations
cannot begin in our classrooms. It’s not a matter of how textbooks are framed, it’s a matter of how the entire
discipline is framed. It’s a matter of how journal gatekeeping happens, what gets seen as a valid knowledge,
who is gatekeeping, how some of those structures of hegemony are existing. Unless we challenge those, I don’t
see our pedagogical process changing in isolation.

GÜLIZ: I agree, and that’s why I began saying there are things that I can do as an agent, and that there are
structures. It’s not that easy to change how you’re doing things, and to change the ways of the business school,
unless you deal with the totality of these forces, ideological structures, as well as institutional structures of pro-
motion, grants, the journals you’re going to be publishing in, national and international rankings, evaluation,
and accreditation systems. As an academic from the global South, perhaps a fruitful practice is to collaborate
and converse with other colleagues from the South. To that end, I have been working with some Brazilian
colleagues; see Ger, Suarez, and Nascimento (2019).

ROHIT: I completely agree with you Güliz.

SUSAN: I don’t want be the token optimist here, because that is certainly not the role I typically play in the
world, but I will say, I think of all the disciplines, marketing is the best suited to embrace this, and to really be
thought leaders within business schools. I’ve heard that the accounting field is really trying to embrace this,
and they’re dedicating a lot of journal space to it. But I think our discipline, by virtue of what we pull from,
anthropology, sociology, critical theory, all this that we borrow so much, I think does put us in a better pos-
ition to be able to address these things versus our colleagues in other departments, except for maybe
management.

TONYA: I do think it’s an “and” right? There’s the agency part, and there are the structures. I think we really
have to challenge our colleagues, even when we’re thinking about who will be admitted to a doctoral program,
for example. So we keep talking about diversifying as if there’s people sitting on a shelf somewhere, waiting to
take up a faculty position. And we know that’s a four to 6 year process. But, you know, we have to figure out
how do we even nurture these people into these programs so we can diversify. If I look at my own degree
granting institution at Northwestern, I am one of seven black people that got a PhD in marketing from North-
western. It’s one of the programs that places a lot of folks in research institutions. There’s only been seven of
us. I know all of them. That’s a problem. So those are the kinds of things we have to look at.
184 G. M. ECKHARDT ET AL.

RUSS: The PhD Project is nice in that regard. And I spoke to it once years ago, and I was the only white guy.
But now I’ve got a mentee, and so I’m glad to see these one-to-one relationships springing up. That’s probably
more productive ultimately than, forgive me, a bunch of black people talking to each other, even though that
mentorship is encouraging, to actually have people from the other side of the academy welcome them and
embrace them is an important part of that too.
GIANA: I like that we’re ending on a note of radical action. Both from our own agency point of view, as well as
challenging structures. Thank you all for your insightful and challenging conversation, and your efforts in
research, teaching and advocacy to start a dialogue and develop tools to allow our field to start down the
path of decolonization.

Further resources and future research

Below are some links to resources which may be helpful for furthering the decolonization conver-
sation. We hope this is the start of more dialogue, research and teaching initiatives within our field.
As emphasized in the introduction to this article, “Business school faculty will always be more com-
fortable in framing racial injustice, racism, discrimination, Islamophobia and colonialism as diver-
sity and inclusion. It is this comfort zone that decolonization tries to disrupt.” (Banerjee 2021).
From a marketing perspective, how can we ensure that our research goes beyond framing these
issues as diversity and inclusion and breaks out of the comfort zone? How can our classrooms,
our hiring practices, our textbooks, and so many other aspects of the marketing discipline go
beyond this comfort zone? We hope that our conversation around these issues inspires research,
teaching innovations, and advocacy work at the structural level to put together a vision of what
decolonized marketing can look like. Is it possible to critique capitalism within marketing, and if
so, what would it look like? Ger et al. (2018) highlight the need for critical reflexivity throughout
the research process, from selection of topics and approaches onwards, as well as the need to always
contextualize market/consumption phenomenon within its political context, if we are to be success-
ful at this.
Decolonization in marketing is in a nascent state, with so much important research to be
done. Ger (2018) reminds us we need to expose historical silences, and her curation of inter-
sectionality research in Journal of Consumer Research foregrounds the macro context and poli-
tics of consumption, crucial for decolonization research. Future research in this space could
include how the marketing of slaves has informed modern marketing practices (Francis
2021), how marketing in subsistence marketplaces (Viswanathan et al. 2021) can be engaged
in from a bottom up rather than top-down way, and what it could look like with a decolo-
nized lens. Can there be an anti-racist form of marketing (Thomas et al. 2020), and if so,
what would it look like? Grier, Thomas, and Johnson (2019) remind us that critical research
on race and the marketplace needs to support liberatory public policies and community
actions. Taking an intersectional approach to marketing research, which is when multiple
dimensions of advertisements or consumers or managers are considered at once, such as
race and gender (Golpadas and DeRoy 2015), is especially promising to achieve this. Golpadas
and DeRoy (2015) outline how this can be achieved in both quantitative and qualitative
research. We look forward to seeing these and other important issues addressed in future mar-
keting and consumption scholarship.

Decolonization resources
Foundational readings in decolonization, outside of the discipline of marketing, are available
here:

https://www.cass.city.ac.uk/faculties-and-research/centres/cre
 CONSUMPTION MARKETS & CULTURE 185

Resources for diversifying the marketing curriculum:

https://docs.google.com/document/d/1EZitki4NSl6dvdtu3b4MdEzBpqzDaAuO2JcBijtk2T4/edit?
pli=1&fbclid=IwAR1PuhKnnf_-aul0RYUzt57FdNFPCXHVMtzJphx09vS9X24-DL5U6te8pL8

Readings on race and the marketplace:

https://www.rimnetwork.net/rim-repository

Readings on gender and consumption:

https://genmacco.wordpress.com/resources/research-guides/research-on-gender/

Teaching materials on gender:

https://genmacco.wordpress.com/resources/teaching-innovations

Disclosure statement
No potential conflict of interest was reported by the author(s).

Notes on contributors
Giana M. Eckhardt is Professor of Marketing at King’s Business School, King’s College London. Her research is in the
areas of consumer behavior, consumer culture, consumer ethics, branding, and the sharing economy. She published
in outlets including as Harvard Business Review, Journal of Marketing, Journal of Marketing Research, and Journal of
Consumer Research.
Russell Belk is Royal Society of Canada Fellow, York University Distinguished Research Professor, and Kraft Foods
Canada Chair in Marketing in the Schulich School of Business, York University. His research involves the extended
self, meanings of possessions, collecting, gift-giving, situational effects, sharing, digital consumption, consumer
robotics, and materialism, and it is primarily qualitative as well as often conceptual, visual, and cultural. He is the
past president and fellow in the Association for Consumer Research and has over 700 publications including
more than 30 in Journal of Consumer Research.
Tonya Williams Bradford, Associate Professor and Inclusive Excellence Term Chair Professor (2021–2024), Univer-
sity of California, Irvine. She researches rituals, communities and identity across phenomenon including gifting (e.g.
registry, organ, charitable), relationships with money, communities (e.g. tailgating and support), acculturation, and
consumer-brand engagement.
Susan Dobscha is Professor of Marketing at Bentley University in Waltham, MA, USA. Her research focuses on sus-
tainability, gender, and transformative leadership. She has published in Harvard Business Review, Journal of Business
Ethics, Journal of Retailing, Journal of Public Policy and Marketing, and Journal of Marketing Management.
Güliz Ger is Professor of Marketing at Bilkent University, Turkey and a part-time professor/mentor at Skema, France.
Her research interests involve the sociocultural and global dimensions of consumption and markets, particularly in
transitional societies/groups. She has published in journals such as the Journal of Consumer Research, Journal of Pub-
lic Policy and Marketing, Consumption, Markets & Culture, California Management Review, and in edited books.
Rohit Varman is Professor of Marketing and Consumption at Birmingham Business School, University of Birming-
ham. He uses interpretive methodologies and his current inter-disciplinary research focuses on violence, exploitation,
and slavery. He has published his research in several outlets that include Journal of Consumer Research, Organization
Science, Journal of Retailing, Journal of Service Research, and Human Relations.

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 Cogent Business & Management

ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/oabm20

Switching costs, customer satisfaction, and their

impact on marketing ethics of medical schemes
in South Africa: An enlightened marketing
perspective

Thabang Excellent Mofokeng |

To cite this article: Thabang Excellent Mofokeng | (2020) Switching costs, customer
satisfaction, and their impact on marketing ethics of medical schemes in South Africa: An
enlightened marketing perspective, Cogent Business & Management, 7:1, 1811000, DOI:
10.1080/23311975.2020.1811000

To link to this article: https://doi.org/10.1080/23311975.2020.1811000

© 2020 The Author(s). This open access

article is distributed under a Creative
Commons Attribution (CC-BY) 4.0 license.

Published online: 25 Aug 2020.

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Mofokeng, Cogent Business & Management (2020), 7: 1811000
https://doi.org/10.1080/23311975.2020.1811000

MARKETING | RESEARCH ARTICLE

Received: 20 May 2020
Accepted: 12 August 2020
*Corresponding author: Thabang
Excellent Mofokeng, Marketing,
University of Johannesburg -
Auckland Park Kingsway Campus,
Kroonstad 9499, South Africa
E-mail: tmofokeng@uj.ac.za
Reviewing editor:
Len Tiu Wright, De Montfort
University Faculty of Business and
Law, UNITED KINGDOM
Additional information is available at
the end of the article
Switching costs, customer satisfaction, and their
impact on marketing ethics of medical schemes
in South Africa: An enlightened marketing
perspective
Thabang Excellent Mofokeng1*
Abstract: The issue regarding the transition of members from their current
medical schemes to the National Health Insurance (NHI) in South Africa has
erupted in much debate. This study, modelled on enlightened marketing philo­
sophy concepts, measures the effects of the perceived costs classified by type
(procedural, financial, and relational) and direction (positive and negative) of this
switch in terms of Customer Satisfaction. It also measures the impact on the
perceived marketing ethics of current medical schemes in South Africa. Data
were collected using a face-to-face survey from 250 consumers of medical
schemes in South Africa. An 83.2% response rate was entered into SPSS Version
26, and AMOS Version 26 to test a two-step modelling approach (SEM). The
results reveal positive significant effects of personal relational loss costs and
benefit loss costs on Customer Satisfaction, which in turn, negatively affects

ABOUT THE AUTHOR PUBLIC INTEREST STATEMENT

Thabang Excellent Mofokeng
Thabang Excellent Mofokeng completed
Baccalaureus Technologiae Degree in Marketing
Management, and Master’s Degree in Marketing
Management, both from Vaal University of
Technology, and his PhD in Marketing
Management from North West University, South
Africa. He completed the Post-graduate Diploma
in Higher Education from the University of
Johannesburg, South Africa. He has been working
in academia for the last 10 years. Moreover, he
has been teaching at Undergraduate and
Graduate programs at the University of
Johannesburg for the last 3 years. He has also
been working as a BCom Marketing Program
coordinator and as lecturer in Marketing
Management at the Department of Marketing,
School of Consumer Intelligence and Information
Systems, College of Business and Economics,
University of Johannesburg, South Africa. His
research interests include services marketing,
e-commerce marketing, retail marketing, and
consumer behaviour. He is an emerging
researcher aiming to publish research articles in
both national and international journals.
The policy on National Health Insurance (NHI)
promotes the principle of social solidarity. It will
eradicate imbalances in South African healthcare
by enabling private-public health sector interac­
tions. Owing to high switching costs, both the
satisfied consumers (who like to try new pro­
ducts) and dissatisfied customers often feel
“locked-in”. Looking ahead, it seems the enligh­
tened marketing philosophy needs to be
embraced to enhance the long-term perfor­
mance of the marketing system of the medical
schemes. However, more knowledge is required
on how switching costs will affect the continu­
ously changing expectations of customers and
the consequent outcome on the currently per­
ceived marketing ethics of medical schemes.
Results show significant positive effects of
Personal Relational Loss costs and Benefit Loss
Costs on Customer Satisfaction, which negatively
affects their perceptions of marketing ethics.
Increasing Benefit Loss Costs enhance the satis­
faction of members contributing large and med­
ium monthly fees, and those with switching
experience. Satisfaction affects perceptions of
marketing ethics for customers who do not have
switching experience.

© 2020 The Author(s). This open access article is distributed under a Creative Commons
Attribution (CC-BY) 4.0 license.

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currently perceived marketing ethics of medical schemes. For customers paying

high and medium medical scheme contributions, and those who have prior
switching experience, the results show that the costs of increasing benefit loss
enhance Customer Satisfaction. Increasing satisfaction then enhances percep­
tions of marketing ethics for customers who do not have switching experience.
The practical implications and recommendations explain marketing strategies to
medical scheme practitioners to enable the enhancement of personal relation­
ships with customers and increase the service benefits, which in turn, removes
the current negatively perceived marketing ethics. This paper, therefore, links
articulation of the disconfirmation Expectation Theory and the General Theory of
Marketing Ethics in the context of medical schemes in South Africa. Limitations
and relevant future research avenues conclude the discussion of the research
study.

Subjects: Economics; Business, Management and Accounting; Public Health Policy and
Practice

Keywords: switching costs; customer satisfaction; marketing ethics; medical schemes; NHI;
South Africa

1. Introduction
The enlightened marketing philosophy involves using the five broader principles of ▪customer-
value marketing; ▪ consumer-oriented marketing; ▪ innovative marketing; ▪ societal marketing; and
▪ sense-of-mission-marketing to support the long-term performance of the marketing system
(Kotler & Armstrong, 2010). The relevant topic of societal issues was introduced by Kotler and
Levy (1971) based on social responsibility, ethics, marketing, ecology, consumerism, the desired
political advertising appeal, and the growing demand for public goods with a focus on the market­
ing problems of non-profit entities (i.e. non-profit, micro, normative). The Normative Ethical Theory
sets the guidelines for ethical behaviour and integrates Positive Ethical Theory and outcomes,
while Distributive Justice is an ethics precept embracing enlightened marketing ethics (Ferrell &
Ferrell, 2008). Distributive Justice, a central concept in the Catholic social tradition introduced by
Laczniak (1999), is another foundation of marketing ethics involving human rights, dignity and
stewardship, and the common good and fair treatment of vulnerable markets.

A recent World Health Organisation (WHO) report acknowledges the “flexibility and enabling
role” of public health law in accomplishing the right to health (A. Gray & Vawda, 2017). In
appreciation of the work by South African activists, Section 27 of the post-apartheid Constitution
(Republic of South Africa, 1996) also endorses the right to health as a human right when it states,
“(1) everyone has the right to have access to (a) healthcare services, and reproductive healthcare”
(Annas, 2003). Consequently, as a fundamental human right, access to healthcare is viewed as
value (Cosma et al., 2020). Groenewoud et al. (2019) have further argued that introducing
a business ethics concept into healthcare seems to erode the essential healthcare values. In
other words, a single-minded focus on Value-Based HealthcareVBHC) may infringe on the four
medical ethics principles; firstly, by neglecting patients’ personal values; secondly, by ignoring the
intrinsic value of the caring act; thirdly, by completely ruining patients’ trust of accountable
professionals; and lastly, by waiving the social solidarity principle. The premise in this paper
includes the argument related to the latter principle in the South Africa’s new National Health
Insurance (NHI) system, whereby all taxpayers will contribute to the benefits to be shared across
the entire population. Enlightened marketing; ▪customer-value marketing; holds that when an
organization builds long-term customer loyalty and relational exchanges by continuously increas­
ing the value customers acquire from its market offering, it can capture value from consumers in
exchange (Kotler & Armstrong, 2010).

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This study uses an enlightened marketing philosophy to revive the long-term performance of the
marketing system of the medical aid (Kotler & Armstrong, 2008) scheme industry in South Africa
(Council for Medical Schemes Annual Report, 2017–2018). The norms of professional ethics are
usually to consider healthcare as a moral obligation in a decent society that embraces a sense of
needs for belonging and caring for the community (Rowe & Moodley, 2013). Holcombe (2015)
recommends the importance to follow the guidelines of ethical marketing set by the American
Marketing Association (2005), and to conduct health-related marketing campaigns that promote
the core principles of fairness, honesty, citizenship, respect, and transparency. Care ethics also
holds that the existing layers must be uncovered below the surface of outcome measurement to
acquire healthcare quality. These layers are:

● Firstly, the quality of accomplishing a health need (caring about);

● Secondly, the quality to care for (hold responsibility for the specified need and responsiveness,
both on physician’s technical care delivery and emotional engagement);
● Thirdly, the quality of caregiving (the direct action involved in facilitating the actual physical
work of the caring responsiveness);
● Lastly, the quality of care receiving (the reactions of the object of care towards the care given
(Groenewoud et al., 2019)).

Clearly, complex ethical implications affect the daily requirements of healthcare services (Rowe &
Moodley, 2013). Latham (2004) examines the complexities faced in marketing the medical services
ethically in the United States. In this context, from the early 1990s, the health insurance market
developed rapidly with products by using above-the-line marketing (i.e. mail adverts and radio
media) to gain popularity in the local market (Erasmus et al., 2016). In another study that examined
the ethics of advertising for healthcare services in the United States, Schenker et al. (2014) have
argued that clinical advertising by healthcare organizations constitutes a fiduciary responsibility to
patients (both healthcare providers and health organizations are obligated to patients). They insist
that the ethics of clinical advertising by healthcare organizations are investigated in isolation from
those that do not impose these obligations. In addition, from a legal and ethical perspective, such
fiduciary exchange relies on patient trust (British Medical Association, 2017).

The healthcare industry probably remains one of the most interrogated industries globally. The
marketing ethics of medical services involving hospitals, physicians, medical groups, and other
mainstream medical caregivers in the United States have been examined by Latham (2004), while
the relevance of the specific “social marketing” element in the development of medical marketing
strategies is commended by Cătoiu et al. (2013) in the international context. Unfortunately, the
growing business of medical schemes in South Africa makes it a pivotal research area due to its
vulnerability to increasing opportunities of unethical marketing. However, issues from unscrupu­
lous parties in this sector (which is a primary area of ethical concern) are rarely explicit. The South
African Lancet National Commission Report shows the gaps in management, ethical leadership,
and governance as determinants of poor healthcare quality, leading to vast consequences (i.e.
overuse of inappropriate care, underuse of evidence-based care, poor patient-driven care, collu­
sion, financial insecurity, patient safety hazards, delay, inefficiency, inequity and corruption), all of
which cause unnecessary loss of lives (A. Gray & Vawda, 2019). Clearly, such corruption contributes
to its high costs and the artificially inflated prices in the South African healthcare sector (Dambisya
et al., 2008).

The use of private hospitals and related health services closely attached to a medical scheme
insurance (A. Gray & Vawda, 2017) coverage; since it secures household members from incurring
unexpected healthcare costs (Dambisya et al., 2008). However, a very high minimum cost of the
medical-aid schemes invites criticism about their lack of affordability to many South Africans
(Erasmus et al., 2016). This then contradicts the notion of managed healthcare as defined in the
Medical Schemes Act (No. 131 of 1998) as:

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Managed healthcare refers to clinical and financial risk assessment and healthcare man­
agement with a vision to facilitate appropriateness and cost-effectiveness of relevant health
services within the framework of affordability, using rules-based and clinical management
based programmes (Kaplan & Ranchod, 2014–2015).

To further cite Erasmus et al. (2016), the Medical Schemes Act (No. 131 of 1998) defines the
business of a medical scheme as:

Undertaking liability in return for a premium or contribution

● to make provision for the obtaining of any relevant health service;

● to grant assistance in defraying expenditure incurred in connection with the rendering of any
relevant health service; and

● where applicable, to render a relevant health service, either by the medical scheme itself, or by
any supplier or group of suppliers of a relevant health service or by any person, in association
with or in terms of an agreement with a medical scheme.

According to the Competition Commission of South Africa, the country’s current medical schemes
fall into two market categories, namely, the open medical schemes and the restricted medical
schemes (which target specific members of the defined group, employer, industry, or union)
(Competition Commission, South Africa. H, 2018). Many large open schemes have high marketing
budgets (i.e. costs embedded into administration fees) and implement tactical and complex
strategies and marketing activities (Erasmus et al., 2016). While these medical schemes finance
the costs of each healthcare benefit package offered to members for a monthly fee, the major
concern includes the increasing high hospital and related costs, where members with a benefit
package from one scheme perceive the switching costs as high (Competition Commission, South
Africa. H, 2018). Conversely, perceived high switching costs are the prohibitive factor for dissatis­
fied customers to divert their loyalty from an organization (Ul Hadi et al., 2019). Hence, together
with brand and customer loyalty, high switching costs remain the barrier for consumers to change
from this product or service that they regularly use (Competition Commission, South Africa. H,
2018).

The purpose of this study is to develop and test the conceptual model of the effects of perceived
switching costs classified by type (procedural, financial, and relational) and direction (positive and
negative), on Customer Satisfaction as well as their effect on perceived marketing ethics of
medical-aid schemes in South Africa. This study, therefore, tests the moderating effects of medical
scheme contributions and customers’ switching experience on the effects of such costs in terms of
Customer Satisfaction. It also examines the satisfaction effects on the perceived marketing ethics
of medical schemes. In the literature, Customer Satisfaction is the primary objective of all orga­
nizations (Gaski, 1999), but its related antecedents for medical scheme customers have not been
investigated in the context of medical schemes, especially in emerging markets such as South
Africa.

In sum, this paper argues that the inability of satisfied and dissatisfied customers to switch their
medical schemes due to higher costs could have a detrimental effect on the perceived marketing
ethics of the medical schemes. The next section discusses the scope of the medical scheme
market in South Africa.

1.1. Market environment of medical schemes in South Africa

To fulfil the main obligation relating to the constitutional right of provision of access to healthcare,
the South African government has enacted a legislative framework in the National Health Act (No.
61 of 2003) (NHA). The purpose is:

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to grow a framework for structured uniformity of health system within the Republic, parti­
cularly consider liability for the responsibility of the obligations imposed by the Constitution
and other regulations guiding health services at the local, provincial and national govern­
ment spheres (Competition Commission, South Africa. H, 2018).

Following the National Health Act (No. 61 of 2003) which authorises medical schemes to hold the
legal powers to finance healthcare (Competition Commission, South Africa. H, 2018), the promul­
gation of the Consumer Protection Act (No. 68 of 2008) has introduced amendments to the Act
(No. 61 of 2003) (Rowe & Moodley, 2013). Medical schemes, therefore, operate under the jurisdic­
tion of the Consumer Protection Act (No. 68 of 2008), which affects the benefit packages in
numerous ways:

(1) all representations made to the clients must be in the preferred language that is clearly
understood by an ordinary person possessing average literacy skills and understanding;
(2) discriminatory marketing activities are forbidden, i.e. exclusion of persons from any goods or
services or target particular communities for exclusive supply of goods or services (Kaplan &
Ranchod, 2014–2015).

In South Africa, as stipulated in the Medical Schemes Act (No. 131 of 1998), the medical schemes
are the primary private health-financing mechanism and similarly managed for the nonprofit trust
funds (Erasmus et al., 2016; Kaplan & Ranchod, 2014–2015). They are regulated by a separate and
independent regulatory authority − the Council for Medical Schemes (CMS) − which aims to
increase access to good quality medical scheme cover and protect the consumer’s best interests
(Kaplan & Ranchod, 2014–2015). The marketing literature also recommends organizations to
perform ethical practices to secure their customers’ best interests (Hunt, 2010). That is, the
marketing decision-making process of enlightened organization; ▪societal marketing concept con­
siders consumers’ interests and wants, the organization’s requirement, and society’s interest in the
long term (Kotler & Armstrong, 2008).

Before the promulgation of the Medical Scheme Act (No. 131 of 1998) in 2000, not all the
medical schemes abided by the responsibility to report to a central body. This increased the
possibility that data and figures reported prior this enactment could have understated the financial
irregularities incurred by the schemes and the number of people who could access medical
schemes (Dambisya et al., 2008). Today, all the medical schemes are obliged to comply with the
requirements of the Medical Schemes Act (No. 131 of 1998), unless the Council for Medical
Schemes (CMS) exempts the medical schemes from certain provisions of the Act (Erasmus et al.,
2016).

Introducing the Medical Schemes Act (No. 131 of 1998) in 2000 brought together the principles
of social solidarity in the medical scheme market, i.e. open enrolment, community rating and it
also mandated all the medical schemes to offer the Prescribed Minimum Benefits (PMBs) (Erasmus
et al., 2016; A. Gray & Vawda, 2017; Kaplan & Ranchod, 2014–2015). Each medical scheme markets
a variety of product portfolios to customers (known as benefit options or benefit packages) which
differ in design, and each medical scheme (approved and registered with the Council for Medical
Schemes (CMS)) has to ascertain if the design meets the prescribed standard set in the Medical
Schemes Act (No. 131 of 1998). The Low-Income Medical Schemes (LIMS) report shows that the
scope of these PMBs requires revision, as they constitute high-base cost; thereby driving medical
scheme cover prices higher (Kaplan & Ranchod, 2014–2015).

According to the World Health Organisation (WHO), “health monitoring must extend beyond the
health sector and realise the economic, social, and environmental factors, including inter-sectoral
initiatives” (A. Gray & Vawda, 2017). In 1992/93 an estimated cost of R30 billion (8.5% of GDP) was
spent on healthcare in South Africa. This varied between the private sector (60.8%) and the public
sector (38.7%) (A. Gray & Vawda, 2017). By 1998/99, up to 59% of the total South African health

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sector resources (i.e. financial and human) were consumed in private healthcare, covering less
than 20% of the population (i.e. people who access and use health services via the medical
schemes) (Dambisya et al., 2008). In 2002, the medical schemes dominated the pre-funded health
finance market in South Africa with the top three administrators holding 49.3% of market share,
driven by industry alliance (e.g., Momentum and Metropolitan formed the union entity of MMI
Holdings) (Erasmus et al., 2016). This rose to 80% in 2014 and as a result, the total medical scheme
expenditure increased (in nominal terms) from R127.2 billion in 2014 to R138.6 billion in 2015, or
R15 822.76 per average beneficiary per year. This accounted for hospital care (37.1%); medical
dispensaries in pharmacies; and health service providers beyond the hospitals (16.1%); supple­
mentary and allied health professionals (7.2%); medical specialists (6.6%); and general practi­
tioners (GPs) (6.2%) (A. Gray & Vawda, 2017). The 2015 General Household Survey revealed that 9
458 000 (17.5%) South Africans had medical scheme cover, while 23.5% of households had at least
one member who was covered (A. Gray & Vawda, 2017). In 2016, the medical scheme's expendi­
ture accounted for 41.8% of the total healthcare expenditure − considered high according to
international standards. However, it should be noted that medical scheme members volunteer
for cover, and the medical scheme contribution is a service condition imposed by employers
(Erasmus et al., 2016).

Consequently, the 2017 increase of Value Added Tax (VAT) from 14% to 15% was a challenge for
medical schemes in South Africa and this slowed the growth in the general numbers of medical
scheme membership. As rising membership is a driver of medical scheme business growth, the fall
in membership was attributed to weak economic growth (i.e. low GDP, negative credit ratings, etc.).
In 2018, members benefited from the lower average monthly contribution of 7.2%, compared to
11.3% proposed in 2017 (Council for Medical Schemes Annual Report, 2017–2018). Despite this, the
cost of pre-funded healthcare in South Africa has since increased to a rate above the Consumer
Price Index (CPI), which has pressurized the medical scheme costs for a while, and more recently,
the cost of health insurance products. Thus, a growth in the usage of medical services among
customers is the key driver of costs (Erasmus et al., 2016).

Presently, the South African population is estimated at 55.5 million (National Department of
Health, 2016), yet over 50% of the total healthcare expenditure serves only 16% of the population
(8.8 million people) covered by the medical schemes in the private sector (Erasmus et al., 2016;
A. Gray & Vawda, 2017; Maphumulo & Bhengu, 2019; National Department of Health, 2014).
Clearly, this raises concerns when the affordability of medical schemes is examined: the relatively
high proportion of the state’s healthcare expenditure flows into medical schemes which only serve
the minority of the population (16%) (Erasmus et al., 2016). Currently, over R200 billion is spent on
16% of the population who currently have a medical scheme cover (A. Gray & Vawda, 2019).
Consequently, in the private sector, an estimated 80% of medical specialists in South Africa serve
the same population (16%) (Maphumulo & Bhengu, 2019; National Department of Health, 2016),
while 84% of the South Africans rely heavily on the government’s under-resourced public health
sector for their health needs (Maphumulo & Bhengu, 2019). The obvious difference, however, is
that the public facilities render free care for most medical conditions while private facilities charge
a service fee (Jacobsen & Hasumi, 2014). Thus, consumers covered by medical schemes are likely
to have a high socio-economic status and their preference is to visit the private facilities that they
perceive offer a higher standard care. Therefore, socio-economic status has been shown to predict
Customer Satisfaction with private healthcare in South Africa (Ayo-Yusuf et al., 2016; Dambisya
et al., 2008).

The Medical Schemes Act (No. 131 of 1998) aims at reducing the discriminatory clauses by
matching the schemes’ operations in accordance with the Constitutional vision of the provision of
more equitable medical care (Dambisya et al., 2008). However, social inequalities in access to
medical scheme cover still persist (e.g., the number of “Africans” on medical schemes has reduced
from 10% in 1996 to 8% in 2003, while coverage for “white” members reflected at over 60%)
(Dambisya et al., 2008). The problems identified by McIntyre (1995), for example, the overall

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maldistribution between the private and public sectors (relative to the populations served); the
overall under-resourcing of the public sector; maldistribution of funds between geographical areas
with relatively affluent (urban) areas acquiring a greater proportion than underdeveloped areas
(rural, ex-homeland); and maldistribution between levels of care, still persist in 2017. The National
Health Insurance (NHI) policy, however, aims to eradicate these imbalances (A. Gray & Vawda,
2017) between the current co-existing private and public health sector systems. This is the premise
of “social solidarity”.

1.2. National health insurance (NHI)

The National Health Act (No. 61 of 2003) together with other laws and policies, e.g., the National
Development Plan (NDP) and the National Health Insurance (NHI) form the regulatory framework
governing the provision of health service in South Africa (Competition Commission, South Africa.
H, 2018). The NHI refers to a series of major health system reforms that aim to promote the
social solidarity principle, as well as to address issues of greater quality and equity in the South
African healthcare sector (Erasmus et al., 2016; Rowe & Moodley, 2013) that is not achieved to
date.

As endorsed by the National Health Plan, the provision of Universal Health Coverage (UHC) aims
to enable a conducive environment for public-private health sector interactions (African National
Congress, 1994). The World Health Organisation (WHO) insists that:

Accelerating the progress in provision of Universal Health Coverage (UHC) depends on three
broad principles to guide health financing reforms. First, [a] shift towards a predominant
reliance on compulsory (i.e. public) funding sources. Second, [to] reduce fragmentation in
pooling to enhance the re-distributional capacity of these prepaid funds. Lastly, [a] shift
towards strategic purchasing, which intends to align funding and incentives with promised
health services (A. Gray & Vawda, 2019).

One key element of the NHI reforms, therefore, is the design of a split between purchaser-to-
provider through the provision of a “single-buyer” services body. This aims to strategically pur­
chase health services despite affiliation with the private or public sector. Such a classic feature is
provided in health services markets in the developing countries (Wagstaff et al., 2016), but is still
absent in the context of South Africa (Competition Commission, South Africa. H, 2018).

The crux of the NHI healthcare system is that the health risk will be cross-subsidised to all the
citizens of South Africa (Erasmus et al., 2016; Rowe & Moodley, 2013). Consequently, all taxpayers
or income earners will make mandatory contributions so that the benefits are shared across the
entire population, including people who are unable to make a direct monetary contribution to the
NHI fund (French, 2012; A. Gray & Vawda, 2018; Rowe & Moodley, 2013).

The potential for NHI to generate additional funds for the healthcare sector and to enhance
equity and efficiency relies largely on the implementation of finance, pools, purchase, and
provision of reforms (A. Gray & Vawda, 2017). Areas of interest for NHI funding include
establishing the interim NHI fund and developing health techno-assessment capacity (A.
Gray & Vawda, 2018). The overall tax subsidy of R15.9 billion in 2014 which equates to 12%
of gross contributions has indicated an improved equity between the medical scheme tax
subsidy and the cost per capita in the public sector. Consequently, this has sparked discussions
on the possible removal of this tax subsidy and redirecting it towards the NHI funds (Erasmus
et al., 2016). A major adjustment to the 2017 Medium Term Budget Policy Statement was the
allocation of R4.2 billion to the NHI fund via the adjustments of medical credits on personal
income tax at a margin below inflation for a three-year period, i.e., R700 million (year one),
R1.4 billion (year two) and R2.1 billion (year three) (A. Gray & Vawda, 2018). Thus, the White
Paper estimates a funding deficit of R72 billion for NHI by 2025/26 due to an expected 3.5%
annual economic growth rate (A. Gray & Vawda, 2019).

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Predictably, the NHI is envisioned to erode many of the health service sector’s challenges
(Erasmus et al., 2016); since the private medical scheme sector can expect vast disputes subse­
quent to the introduction of NHI, such as the separation between health insurance and medical
scheme cover, and the constantly evolving regulatory environment (French, 2012). However,
looking further ahead, if these NHI reforms are implemented successfully, the current high
demand for private over the public healthcare will disappear naturally, with medical schemes
expected to play a substantially reduced role by providing only supplementary healthcare cover
(Erasmus et al., 2016). The NHI services benefit package and the Prescribed Minimum Benefits
(PMBs) will be merged to assist members to transit swiftly from medical schemes to NHI (French,
2012). In addition, a capitation payment system (i.e. the doctor paid a specific amount per enrolled
person for a set period of time) will be adopted to incentivise underprovision of services by doctors.
Thus, extensive consultations with the medical professional groups in South Africa are critical, as
many health workers could migrate to the developed countries (A. Gray & Vawda, 2019). The
rationale for this is that the more services they actually provide, the more a patient is costing them
(Rowe & Moodley, 2013). Capitation payments will complement the performance-based payments
to limit unnecessary referrals and reach targets for preventive services (Competition Commission,
South Africa. H, 2018; A. Gray & Vawda, 2019).

1.3. Objectives of the study

Switching costs in competitive health insurance markets were examined by Lamiraud (2013);
however, a critical area of the ethical marketing is for medical schemes to meet consumers’
expectations. This study, therefore, offers a novel architecture to bridge the gap of limited research
on the effects of perceived switching costs on Customer Satisfaction, and the consequent outcome
on perceived marketing ethics of medical schemes. The objectives developed to measure the
identified marketing research problem include:

● an examination of the effects of perceived switching costs on Customer Satisfaction;

● a proposal to test a conceptual model on the effects perceived switching costs on Customer
Satisfaction, and the resultant effect on perceived marketing ethics.
● an investigation on the moderating effects of the medical scheme contributions and customer
switching experience and the threefold impact of the perceived switching costs on satisfac­
tion, satisfaction effects, and marketing ethics in the South African healthcare sector.

To achieve these objectives requires a rigorous study that answers the following questions:

● What is the role of perceived switching costs on customers’ satisfaction?

● How does satisfaction affect perceived marketing ethics?
● Do the medical scheme contributions and consumers’ switching experience moderate the
effects of perceived switching costs on Customer Satisfaction, and the satisfaction effects on
marketing ethics?

In general, this paper has described the background information critical to develop an under­
standing of the problem investigated in this study and to develop the research objectives and the
research questions. The next section discusses the literature review on the switching costs,
Customer Satisfaction, and marketing ethics, including multiple theories fundamental to the
development of the conceptual model shown in Figure 1. The research methodology applied in
the systematic design, collection, analysis, and interpretation of the findings will be discussed,
including the practical implications and recommendations, and limitations of this study and future
research ideas.

2. Literature review
The issues of ethical principles and social responsibility are guided by two philosophies. The first
philosophy does not oblige organizations and their managers to inherit the responsibility for

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Figure 1. Conceptual model of Procedural Switching Costs

the effects Switching Costs on
Customer Satisfaction, and the Negative Economic Risk Cost
switching Expectation Disconfirmation Theory
resultant effect on perceived costs
H1 (-)

Marketing Ethics of medical-aid Benefit Loss Cost

H2 (-)
schemes in South Africa. Customer
Satisfaction
Financial Switching Costs
H3 (+)

Positive Monetary Loss Cost H4 (+)

switching
costs
Evaluation Cost H6 (-)
H5 (+)

Relational Switching Costs

Positive Marketing Ethics
switching
Personal Relational
costs
Loss Cost
General Theory of Marketing Ethics

making moral decisions, but ethical issues follow and are decided by both the free market and
legal system. The second philosophy rests the responsibility in the hands of the organizations and
their managers, and not on the system, which is an enlightened philosophy that embraces “social
conscience” (reflecting beyond the legal systems and allowed) and which adheres to the standards
of corporate conscience, personal integrity, and long-term customer welfare (Kotler & Armstrong,
2008).

Thus, organizations follow corporate marketing ethics as broad guidelines affecting its product
development, pricing, distribution relations, advertising standards, customer services, and the gen­
eral ethical standards (Kotler & Armstrong, 2010). From the perspective of Marketing 101, Latham
(2004) has examined ethics in the marketing of medical services and has argued that each of the
four P’s (i.e. product, price, place, promotion) have a component of ethical questions. He insists on
the importance of an attempt to determine the selling price at which the product or service will
generate more profit to the seller and still be attractive to the target consumer (e.g., should the
product or service cost less, be a “loss-leader,” or a high markup cost, such as luxury goods?).

In the healthcare sector, the medical schemes use a price-rationing method. That is, goods and
services are sold to consumers who are able and willing to pay the price. The “price” in this view
constitutes the contribution rate and the degree of out-of-pocket payments incurred from levies,
co-payments, tariff shortfalls, and other deductibles (A. Gray & Vawda, 2019; Kaplan & Ranchod,
2014–2015). The 2010 results of the South African General Household Survey (GHS) show that
93.4% of patients who visited a private facility paid for their services via a medical scheme or from
out-of-pocket, while only 6.6% visited a public healthcare facility (Jacobsen & Hasumi, 2014). This
shows that many South Africans use medical schemes to access private hospital care, while those
without medical scheme cover pay out-of-pocket to gain these benefits (Erasmus et al., 2016).

Paradoxically, the research shows the price elasticity of demand for medical schemes as
relatively low (Erasmus et al., 2016). The challenge with price competition in the healthcare sector
is that it reluctantly relies on the private (in terms of quality and expense) rather than public
(government) health insurance to fairly ensure that patients and their doctors determine prices,
and choose the healthcare service they want to purchase (Competition Commission, South Africa.
H, 2018). As the “buyer beware” concept is not acceptable, today’s business laws (anti-trust law,
consumer protection law, etc.) have been promulgated to help consumers to make well-informed
market choices, and enable specialised protection to novice customers (Axtell-Thompson, 2005;
Sirgy & Lee, 2008). The Economic Theory holds consumers to be as well informed as possible about
the key features of goods or services they purchase (Bhattacharya, 2013). Furthermore, Economic

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Theory argues that healthcare markets are destined for failure in ways that have a detrimental
effect on the patients’ interests. For example, the General Practitioners (GPs) are responsible for
a vast number of patient referrals, and have control over the commissioning budget, thereby
generating cost savings. If patients could choose their healthcare providers, and if those providers
are paid a fixed sum for each service episode of care they render, then, from the market logic
perspective, those providers would compete on the basis of service quality and experience, thus,
giving patients more choice (British Medical Association, 2017).

From a legal perspective, all patients are considered “consumers”, which enables them to enjoy
the rights of the consumer, such as the right to choose; the right to privacy; the right to disclosure of
information; the right to fair, just and reasonable terms and conditions; the right to fair and honest
dealing; the right to fair value, good quality and safety; the right to fair and responsible marketing;
the right to equality in marketing; and the right to hold their suppliers accountable (Rowe & Moodley,
2013). For over 30 years, the NHS in England, a developed country, has been subjected to growing
market-oriented supply-side reforms driven by the goal of efficiency savings and the aim to allow
patient choice and enhance healthcare satisfaction (British Medical Association, 2017). Researchers
probing into the ethical limits of choice and responsibility in healthcare (Axtell-Thompson, 2005,
p. 212) have echoed the importance of a well-informed market choice and asks “can consumers
switch to another supplier?”. From a holistic view, the appropriateness of choice relies on the
“switching costs”, intensity of rivalry, and the firm’s market share in the industry.

Further, understanding consumer behaviour has become complex due to the variety of competitive
products and services, and the satisfied customers’ willingness to try new products and those of rivals,
which enhance the temptation to switch (Willys, 2018). Consequently, many firms increase switching
costs to reduce the customers’ desire to switch to competitors (M.A. Jones et al., 2000). Obviously,
switching intentions rarely occur if the incumbent firm satisfies customers (Zeithaml et al., 1996).
Balabanis et al. (2006) have revealed that switching costs are more influential when Customer
Satisfaction is low. Hence, the two primary strategies for retaining customers are by increasing switching
costs and enhancing Customer Satisfaction through a balanced management process. Ethics and
practice applications show that organizations can increase switching costs by adding customer value
(e.g., teach customers to identify the unique product benefits, use the product better, and gain the
valuable rewards and bonus), and by building long-term customer relationships (Burnham et al., 2003).
The consumer values health service provider whose activities engage with and treat customers as
partners in an overall approach to their care, who is honest, listens and acknowledges their varied
conditions, and treats them equally (Hassmiller & Bilazarian, 2018) will satisfy consumers, as they are
generally cared for. This situation further leads them to perceive this provider as either ethical or
unethical (Javed et al., 2019).

When purchasers “buy” the best possible care at the lowest possible cost (Groenewoud et al.,
2019), consumers behave as critical healthcare customers and tend to evaluate the switching
costs and develop various satisfaction responses to these costs (Klemperer, 1995). If switching
costs are higher, Customer Satisfaction is negatively impacted (Nagengast et al., 2014; Willys,
2018; Yen, 2010). This indicates that, in the firm’s short-term defensive marketing strategy, the
positive relationship between switching cost and satisfaction is mixed (Fornell, 1992); however, in
the long term, the organization’s ability to retain the patronage of dissatisfied customers through
switching cost costs is limited. In other words, switching costs and satisfaction may interact
negatively in driving customer intentions (M.A. Jones et al., 2000).

In the literature, Bolton (1998) has identified the significance of Customer Satisfaction for the
cellular communication industry in relation to switching. Biedenbach et al. (2015) found the positive
effect of switching costs on Customer Satisfaction in the B2B setting. Sanjeepan (2017) has confirmed
a moderate positive interaction of switching costs and Customer Satisfaction for Internet banking
services at commercial banks in Batticaloa, Sri Lanka, which is a developing country. Moliner (2009)
found the effect of functional value consisted of monetary costs and non-monetary costs on consumer

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satisfaction in the public and private healthcare sector in Valencia (Spain). Thus, the question of how
switching costs and Customer Satisfaction relate is under-researched in the medical scheme industry,
especially in the context of emerging markets such as South Africa. Given the scant research on
switching costs management, the marketing effort to increase Customer Satisfaction waives the
relevance of switching costs, or worse, the marketing field has “blacklisted” switching costs as very
painful to customers and unworthy to study (Burnham et al., 2003).

A SERVQUAL model developed by Parasuraman, Zeithaml and Berry (1992) is a widely used
instrument measuring customers’ perceptions of service quality in a service industry. It has been
adopted in previous studies that measure patients’ satisfaction about healthcare service quality as
a fundamental factor of the overall performance system evaluation of healthcare (Cosma et al.,
2020; Dambisya et al., 2008; Maphumulo & Bhengu, 2019; Nwobodo-Anyadiegwu et al., 2018).
However, a gap exists in the literature on the impact of switching costs on consumer satisfaction
linked to the medical schemes industry. There is also little insight on the impact of switching costs on
consumer behaviour in the context of medical schemes in South Africa. Consumers’ perception of
marketing ethics of medical schemes in the post-purchase evaluation stage is unknown. This study,
therefore, closes this gap by focusing the enlightened marketing view on the conceptualisation and
testing of the switching costs on Customer Satisfaction, and their effect on the marketing ethics of
medical schemes in South Africa. Enlightened marketing; ▪ Consumer-oriented marketing; means
sensing, serving, and satisfying the consumer needs (Kotler & Armstrong, 2008). A. Gray and Vawda
(2017) report that, in South Africa, 88% of the patients were “very satisfied” or “somewhat satisfied”
with their medical schemes compared to 83% of patients without medical scheme cover. It was
expected that the anticipations of medical scheme members would be high given their higher-
income status and payment for health cover. Their satisfaction could also be potentially affected by
shorter waiting times and better amenities in the private sector. Ayo-Yusuf et al. (2016) confirm that
medical scheme membership has an indirect impact on satisfaction (i.e. if the patient could have
used a private facility rather than a public facility) for the following reasons:

● it reduced the financial burden of out-of-pocket payment for care visit;

● lowered the perceived expensive of the treatment; and
● ultimately, limited customers’ dissatisfaction.

Customer dissatisfaction occurs when a customer has expectations more than the organization’s
level of performance (e.g., perceived quality is lower than Customer Satisfaction) (Nwobodo-
Anyadiegwu et al., 2018). In South Africa, Jacobsen and Hasumi (2014) have reported no variance
in customers’ satisfaction with medical scheme cover (e.g., health insurance plan).

In a study on patients as consumers of healthcare in South Africa, Rowe and Moodley (2013)
highlight the ethical and legal implications for healthcare systems, healthcare providers and the
doctor and patient relations. Gundlach and Murphy (1993) show customer trust, equity, responsi­
bility, and commitment as the necessary ethical and legal foundation for fair and open relational
marketing exchange. An ethical brand is characterised by features of respect, diversity, quality,
honesty, integrity, responsibility, and accountability, and such ethical brands promote themselves
without ruining their consumer’s morale (Javed et al., 2019). Consequently, firms complying with
high standards of organization ethics (social responsibility to act ethically and provide benefits to
society) create a competitive advantage and generate profit by:

● lowering the business transactional cost;

● establishing customer trust;
● building the internal services scope (i.e. teamwork success); and
● acquiring social capital gains endorsed by a positive image in the public eye (McMurrian &
Matulich, 2016; Mohammed & Rashid, 2018).

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2.1. Theoretical foundation, conceptual framework and hypotheses development

Cognitive Dissonance Theory and Self-perception Theory posit that consumers who feel “locked-in”
will be defensive about it and think of themselves as satisfied, while dissatisfied customers
attribute “being locked-in” to actions of a firm and will certainly feel highly dissatisfied
(Burnham et al., 2003, p. 20). They have related to a question investigated in this current study,
by asking: “can switching costs independently impact dissatisfaction”? They contend that studies
which could answer such question would be capable of managing the dynamic and contextual
effects of perceived switching costs. In consideration of this view, this current study develops and
tests a conceptual model (see Figure 1 below) of switching costs as a multi-dimensional construct
using a typology of switching cost categories developed by Burnham et al. (2003). These are the
three switching cost types classified into eight distinct facets:

(1) Procedural switching costs (i.e. facets of economic risk, evaluation, learning, and setup costs)
measure the loss of time and effort;
(2) Financial switching costs (i.e. facets of benefit loss, monetary loss) measure the loss of
financially quantifiable resources; and
(3) Relational switching costs (i.e. facets of personal relational loss, brand relational loss costs)
measure the emotional discomfort from the identity loss and ending bonds.

The multi-dimensional view of the switching costs construct will:

● clarify the theoretical explanatory power of the construct (Whitten & Wakefield, 2006);
● clarify the relevant theoretical and managerial implications across types of switching costs (M.
A. Jones et al., 2007); and
● properly interrogate the interactions of switching costs and other related constructs (Barroso
& Picón, 2012) measured in this study.

Switching costs are not mutually exclusive. As time cost is a key element of setup and learning
costs, switchers often reduce these costs via monetary costs or setup costs (i.e. purchase learning
materials, instructor services or installation services) (Parry & Sarma, 2019).

Further, switching costs fall into two distinct types, i.e. positive switching costs and negative
switching costs (M.A. Jones et al., 2002). Ngo and Pavelková (2017) believe that this classification is
useful for practitioners as it provides detailed guidance for applying switching costs in enhancing
customer loyalty. However, in the light of Attribution Theory, Bhattacharya (2013) argues that
customers should perceive switching costs that reflect high customer value positively. Empirical
evidence shows that positive switching costs positively affect Customer Satisfaction while negative
switching costs negatively affect satisfaction (Julander & Söderlund, 2003). As positive switching
costs are benefits beyond the core service, they may give rise to substantially different emotional
and behavioral responses than do negative switching costs (Marcos, 2018). Nagengast et al. (2014)
have merged the two types of positive switching costs (i.e. financial and relational switching costs)
into a single factor, despite other studies (Blut et al., 2015; Burnham et al., 2003; M.A. Jones et al.,
2007) that have measured financial and relational switching costs as separate constructs.
Surprisingly, however, there are no such research studies in the health services industry that
separate positive and negative switching costs, as recommended in the literature (Burnham
et al., 2003; M.A. Jones et al., 2002, 2007). This raises the question of the need to understand
the varied mechanisms or routes through which various switching costs influence Customer
Satisfaction and how this satisfaction impacts the perceived marketing ethics of medical schemes.

The Disconfirmation Expectation Theory developed by R.L. Oliver (1999) is a dominant theory of
consumer behaviour cited widely in the literature that links the satisfaction outcomes to the differ­
ences in expected and actual product performance. It posits that customers evaluate their satisfac­
tion from an overall evaluation of their perceived services experience in terms of whether the services

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consumption meets or exceeds their prior expectations. Any discrepancy between expectations and
actual performances creates a positive disconfirmation (performance exceeds expectations) or
a negative disconfirmation (expectations exceed performance). Confirmation and positive disconfir­
mation lead to satisfaction, whereas negative disconfirmation leads to dissatisfaction.

Consequently, consumer dissatisfaction has a negative impact on the perceptions of the market­
ing ethics of an organisation (Chonko et al., 1996; Thomas et al., 2002). Hunt and Vitell (1986)
introduced the General Theory of Marketing Ethics as a unified framework that measures ethical
judgements within specific sales situations by depicting a “perceived ethical problem” as a catalyst
of the ethical decision-making process of marketers. The ethical decisions rely on deontological
norms and judgments and on teleological norms and judgements. The deontological norms rely on
hypernorms and local norms of the Integrative Social Contracts Theory (Ferrell & Ferrell, 2008). By
its nature, the definition of marketing is a precept grounded in the utilitarian approach to ethics as
marketers set a deontological approach to marketing (Nantel & Weeks, 1996). In general, the
multiple theoretical approach guides the theoretical explanatory power of constructs and their
interactions as shown in the conceptual model (see Figure 1).

2.2. Switching costs

From his seminal work of strategic management literature of “Competitive Strategy”, Porter (1980,
p. 10) defined switching costs as “onetime” costs, rather than the ongoing costs in the repeat purchase
with an organization. This definition guides the formation of switching costs typology by Burnham
et al. (2003). The switching cost definition measures the monetary cost, psychological and emotional
costs incurred in facing the uncertainty of dealing with another firm (Dick & Basu, 1994).

The management, economics, and marketing literature view considers switching costs as indus­
try-specific and consumer-specific (Fornell, 1992; Klemperer, 1995). In the service industry, switch­
ing costs refer to consumers’ subjective evaluation of perceived costs incurred in changing
a service firm (Burnham et al., 2003). In the medical scheme industry, switching costs refer to
the subjective evaluation of perceived costs that the customer incurs in leaving a medical scheme
services provider.

2.2.1. Procedural switching costs

Procedural switching costs are viewed by Burnham et al. (2003) as the traditional view of what
switching costs that involve the following:

● the consumers’ perceived complexity of effort in the search for information prior switching
a firm (pre-switching costs),
● evaluation of the relevant steps (uncertainty costs); and
● learning the procedures and routines of a new firm (setup costs).

Higher perception of procedural switching costs affects the switching barrier (M.A. Jones et al., 2000).
The literature has emphasized that the procedural switching costs often making it difficult for
customers to switch a firm (e.g., the time and effort in the search for a new firm, and challenges
incurred in terminating a contract) derive from the negative sources of constraint, hence, falling in the
domain of negative switching costs (M.A. Jones et al., 2007; Ngo & Pavelková, 2017). While Burnham
et al. (2003) have measured procedural switching costs consisting of the economic risk costs, evalua­
tion costs, set up costs, and learning costs, this study examines economic risk costs (i.e. perceived
alternatives’ risk or uncertainty) and evaluation costs (i.e. time and effort costs to find new medical
scheme and the challenges incurred in terminating a contact) due to the nature of the business of
medical schemes. Nagengast et al. (2014) have found that customers perceive even small procedural
switching costs as painful and do not switch even when they are dissatisfied. Burnham et al. (2003)
and M.A. Jones et al. (2007) refer to this condition as “being locked-in” and it completely forces
customers to stay in the relationship, thus forming perceived calculative commitment.

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2.2.1.1. Economic risk costs. Economic risk costs refer to perceived psychological costs faced with
the “perceived alternatives’ risk or uncertainty of the potential negative consequences that may
occur when adopting a new firm whom a customer has less information” (Burnham et al., 2003,
p. 111), as unused brands may not meet his or her expectations due to uncertainty. This study,
therefore, hypothesises that:

H1: Economic risk costs have a significant direct negative effect on Customer Satisfaction.

2.2.1.2. Evaluation costs. Evaluation costs refer to “the time and effort costs in the search and
analysis required to make a switching decision” (Aydin & Özer, 2005), and require the mental effort
to analyse and restructure information to arrive at a meaningful decision (Burnham et al., 2003,
p. 111). This study, therefore, hypothesises that:

H2: Evaluation costs have a significant direct negative effect on Customer Satisfaction.

2.2.2. Financial switching costs

Financial switching costs are financially quantifiable costs that customers incur in transitioning
from an incumbent firm (Aydin et al., 2005). These switching costs involve structural bonds
imposed by the incumbent firm, capturing costs stemming from the specific benefits lost when
switching (costs of lost performance), and loss of investments (sunk costs) (Burnham et al., 2003).
Burnham et al. (2003) have also classified financial switching costs as the benefits loss and
monetary loss costs. The benefits loss costs and monetary loss costs are viewed as positive
switching costs (foregone gains) that derive from the positive sources of constraint and reflect
the positive value and behaviours that customers sacrifice when leaving a firm (Burnham et al.,
2003; M.A. Jones et al., 2002).

2.2.2.1. Benefit loss costs. Benefit loss costs refer to “the costs incurred in the contractual bonds
that establish economic benefits for staying with a firm” (Burnham et al., 2003, p. 111). The net
effect of switching efforts relies on the perceived strength of switching costs against the corre­
sponding benefits (Yang & Peterson, 2004). Benefits involving membership programs and frequent
flier discounts, for example, show an increment’s core service relationship (Aydin & Özer, 2005).
Hence, a customer who switches the firm loses these benefits and prerequisites accrued from past
services patronage (M.A. Jones et al., 2002). Positive switching costs (social and lost benefits)
impact Customer Satisfaction (Julander & Söderlund, 2003; Meng & Elliott, 2009). This study,
therefore, hypothesises that:

H3: Lost benefits costs have a significant direct positive effect on Customer Satisfaction.

2.2.2.2. Monetary loss costs. Monetary loss costs or “the onetime financial outlays [that] incur
when switching a firm instead of costs spent in purchasing a new product itself” (Burnham et al.,
2003:111; Klemperer, 1995). Monetary switching costs include penalties for switchers to lose the
monetary benefits acquired from long-term membership and the costs required by a new firm (Kim
et al., 2019). In the medical scheme market, for example, monetary loss costs include not only the
costs of purchasing a new benefit package but also the sunk cost of a switched benefit package
(Porter, 1980). Hence, switchers will incur onetime costs such as a deposit or initiation fee from
a new firm (Burnham et al., 2003). In the health sector, Moliner (2009) reports that monetary costs
and service quality are critical determinants of Customer Satisfaction in private sector, while in
a public sector, in terms of Customer Satisfaction, all the factors of perceived value are equally
relevant, though the non-monetary costs stand. This study, therefore, hypothesises that:

H4: Monetary loss costs have a significant direct positive effect on Customer Satisfaction.

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2.2.3. Relational switching costs

Relational switching costs represent “the onetime costs that customers incur for switching
a firm and the subsequent costs need to re-establish a new relationship” (Burnham et al., 2003,
p. 111). The literature suggests that switching costs are the customers’ perceived magnitude of
additional costs incurred to break the bond with the firm and expenditures incurred to secure
a place in a new firm (Ram & Wu, 2016; Willys, 2018). Relational switching costs occur if
comfort, faith, understanding, and affection in the firm create a switching barrier for customers
(M.A. Jones et al., 2007), since they reflect relationship-specific assets (e.g., learnt procedure,
proprietary system, brand preference, etc.) valued by exchange parties (Bhattacharya, 2013;
Tuu, 2015). Value refers to customer’s perceived variances between the personal revenue
generated (results and process quality) and the personal cost (price and acquisition cost)
(McMurrian & Matulich, 2016). Hence, instances of leaving a firm’s brand (brand relations
costs) or contact staff (personal relations loss costs) may cause emotional discomfort for
that customer (Burnham et al., 2003). In retail banking, Ngo and Pavelková (2017) report
that customers treat positive switching costs as good initiatives from their banks and that
they enhance the emotional relationship to their banks. Burnham et al. (2003) measured
relational switching costs consisting of the brand relations costs or contact personnel (personal
relations loss costs). The nature of the business of medical schemes makes it relevant to
examine personal relational loss costs incurred in breaking the bond.

2.2.3.1. Personal relationship loss costs. Personal relationship loss costs are “the affective losses
involving psychological or emotional discomfort due to identity loss or breaking the relationship
and acquaintance with the firm and its staff” (M.A. Jones et al., 2000, p. 262). Blut et al. (2014)
found a positive effect of relational switching costs on customers’ cross-buying behaviour across
the firm’s product categories, and its share of the wallet. Relational benefits focus on the
relationships rather than on performance and positively increase Customer Satisfaction (Hennig-
Thurau et al., 2002). Higher levels of Customer Satisfaction are a significant antecedent of
relational switching costs, as customers avoid breaking bonds that meet their expectations
and satisfy them (Gounaris & Boukis, 2013; Tuu, 2015; Yoon & Suh, 2003). This study, therefore,
hypothesises that:

H5: Personal relationship loss costs have a significant direct positive effect on Customer Satisfaction.

2.3. Customer satisfaction

Satisfaction is defined as “a state of pleasurable fulfilment response from a judgment that
a product or a service provides a pleasurable consumption-related fulfilment, including under- or
over-fulfilment” (R.L. Oliver, 1997, p. 27). The consumer’s response is an outcome of a cognitive
evaluation process of whether a service meets a pleasurable level, thereby fulfilling a need and
want after single or multiple contacts (R.L. Oliver, 1993). The consumer senses that the medical
scheme is fulfilling a need, goal, desire, or so forth and that this forms a state of pleasurable
fulfilment. Thus, satisfaction is the customer’s sense that the medical scheme services offer
outcomes forming a standard of pleasure as opposed to displeasure state.

The philosophy of “marketing concept” views Customer Satisfaction as the key factor in achieving
organisational goals (Gaski, 1999). Customer Satisfaction is a critical determinant of keeping long-term
patient loyalty and achieving a competitive advantage (Chang, Chen & Lan, 2013; Moliner, 2009;
Nwobodo-Anyadiegwu et al., 2018; Shan et al., 2016; Tang, 2011). The most commonly selected
criteria for measuring Customer Satisfaction with health services include the hospital servicescape,
service type (public or private), health condition, politeness of the service contact staff, core service (i.e.
the policy), and insurance provider, among others (Cosma et al., 2020; Crosby & Stephens, 1987; Singh,
1991). This study examines satisfaction in the medical scheme context to enhance the knowledge on
how customers evaluate overall healthcare and make judgements.

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Customer Satisfaction is defined as “positive affective responses resulting from the post-
purchase evaluation of all relationship aspects with a firm” (Geyskens et al., 1998, p. 224). This
study examines satisfaction as the consumers’ evaluation of the overall core services of medical
schemes, as each service contact may positively or negatively affect satisfaction. Thus, even if
consumers evaluate overall in a summary, or judge its separate features, either way, satisfaction
with healthcare experience is a multi-dimensional construct, derived from the judgment of varied
features (Crow, Gage, Hampson, Hart, Kimber, Storey & Thomas et al., 2002). Moliner (2009) has
applied Agency Theory in healthcare to examine the theoretical base and concepts of post-
purchase perceived value and relationship quality among hospital users. Patient satisfaction was
regarded as evaluation between the outcomes of cumulative service transactions; both consumed
and prior to expectations. A cumulative satisfaction cumulates customers’ satisfaction in a long-
term, sequential series of episodes forming overall satisfaction, and it is a key fundamental factor
in the firm’s past, current and future performance (Lam et al., 2004). Thus, a transaction-specific
satisfaction defines a consumer’s emotional response into a single pleasant transaction experi­
ence (R.L. Oliver, 1993), which shows that satisfaction is achieved by cultivating long-term custo­
mer relationships with the objective to retain valuable customers rather than pursuing single
transactions (Tuu, 2015). Hence, for a customer’s satisfaction to affect loyalty, a cumulative
satisfaction is needed for satisfaction episodes to be blended (R.L. Oliver, 1999).

2.4. Marketing ethics

Marketing ethics refer to “the systematic inquiry into the nature and grounds of standards, moral
judgments, and rules of conduct focusing on marketing decisions, behaviours and institutions”
(Eastman et al., 1996, p. 952). Ethics is an Aristotelian moral philosophical tradition for judging the
rightness not of an action per se, but of an action of one person relative to others, based on the
evaluation of the personal interactions (Gaski, 1999; Román, 2003; Thomas et al., 2002). Marketers
must be subjective on every policy and strategy to test for fairness, and ask not only “is it legal?”,
but also “is it right?” (Berry, 1995). Instead of measuring what is right or wrong, the research has
examined the ethical issues and concerns that occur in marketing and how customers and firms
behave when they encounter such issues (Diacon & Ennew, 1996).

Bartels (1967) developed the first conceptualisation of the factors affecting marketing ethical
decisions. Since then, the research has evolved by reflecting on the increased public concern on
unethical marketing activities (i.e. dangerous products, misleading pricing, and deceptive advertis­
ing). Ferrell and Gresham (1985) have since incorporated ethical issues such as price, collusions,
bid rigging, bribes, falsifying information, and deceptive advertising into a contingency framework
for understanding ethical marketing decision-making. The traditional marketing concept uses the
4Ps (e.g., product, price, place, and promotion) to manipulate the mass market (Ferrell & Ferrell,
2008). Relative to this, Eastman et al. (1996) have identified the following as areas of ethical
concern:

● the product (i.e. sell products that lack customer benefits),

● price (i.e. charge higher prices to claim superiority over rivals selling similar service),
● fairness (i.e. bribery, honesty, misrepresent service benefits), and
● confidentiality.

Holcombe (2015) uses the argument that the ethics of marketing cancer by the cancer centres and
hospitals aims at the “emotions more than facts” of consumers and it could be misleading and
imply a perception that new equipment or new services will improve the outcomes without
substantial evidence on such a claim. Latham (2004) believes that the pitfalls in medical marketing
ethics (e.g., the nature of the medical product and price, fairness and quality problems, deception,
problems with placement, lack of information, and conflicting interests in promotion, agency and
access) can be resolved by professionalism as the fifth P in the medical marketing mix. Thus,
marketing ethics applied in the medical services must encompass all the extended services in the

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marketing mix elements (Murphy, 2002). Marketing ethics assumes more relevance and complex­
ity in the services marketing context where the ethical behaviour of marketers is essential to the
realization of marketing effectiveness and satisfaction (Singhapakdi et al., 1996).

Given the increased frequency of their boundary spanning contacts (Nantel & Weeks, 1996), the
contact staff is a suitable example for ethical abuse linked to the activities of the marketing
department (Ferrell & Gresham, 1985). These activities often include products and customer
situations without a proper set of guidelines (Donoho et al., 2013). Examples would include
when they exaggerate or lie about the benefits, or communicate misleading information, use
manipulative tactics, and high-pressure selling techniques (Román, 2003). Previous studies
(Chonko et al., 1996; Thomas et al., 2002) indicate that the perceived high ethics of salespeople
has declined, and consumers have a negative perception of salespeople as they perceive them to
have low ethical standards (i.e. false promises or coercion into a purchase).

Unethical sales behaviour, as perceived by consumers, is defined as the short-term salesperson’s

conduct to generate a sale at the expense of customers and has a profound impact on the public
image about the firm (Pezhman et al., 2013). Consumers’ have subjective beliefs and their source
of unethical behaviour may distort their buying behaviour (Brunk, 2010). The perceived vicarious or
personal, unethical marketing behaviours that relate negatively to the customers’ expectations
(Creyer & Ross, 1997) are:

● attitude (Babin et al., 1999);

● satisfaction (Alexander, 2002); and
● Behavioural Intention (Creyer & Ross, 1997).

Thus, the ethical behaviour of salespeople positively affects Customer Satisfaction (Mulki &
Jaramillo, 2011; Pezhman et al., 2013; Thomas et al., 2002). Consequently, when the overall
Customer Satisfaction is negative, the perceived marketing ethics of a firm will be affected
negatively by the overall dissatisfaction (Chonko et al., 1996; Thomas et al., 2002). “In a real
world, consciously dissatisfying customers contradicts with the definition of marketing” (Gaski,
1999, p. 319). This study, therefore, hypothesises that:

H6: Low Customer Satisfaction has a negative impact on perceived marketing ethics.

3. Research methodology

3.1. Measures
A quantitative research study (Malhotra, 2007), was conducted by using structured self-administered
questionnaires used to measure Economic Risk Cost (six-items), Evaluation Cost (four-items), Benefit
Loss Cost (three-items), Monetary Loss Cost (three-items), Personal Relationship Loss Costs (four-
items), and Customer Satisfaction (four-items). Section A captured the demographic data involving
age, gender, medical scheme affiliations, monthly contribution, number of covered households,
customer switching experience, and the length of membership. Section B comprised validated scale-
items sourced from the typology of switching costs developed by Burnham et al. (2003), to the Ethical
Marketing Issues (nine-items) scale (sourced from Murphy et al., 1992) to measure the marketing
ethics in this study.

All the 33 scale-items formed statements suitable for collecting primary data needed to answer
the research questions and achieve the objectives of this study. Responses were measured using
a five-point Likert-scale varied from strongly disagree (1) to strongly agree (5). The questionnaire
was pre-tested on a sample (n = 50) with similar traits to the initial sample to eliminate survey and
measurement errors, thus, improving the overall quality of the survey.

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3.2. Sampling and data collection

A cross-sectional study (Malhotra, 2007), collected data only once from a targeted population of
medical scheme clients ranging between 18 to 60 years of age, who resided in South Africa, Gauteng
Province. In 2016, the population of South Africa was estimated at 55.91 million, with the highest
proportion (24%) or 13.5 million people residing in Gauteng Province (A. Gray & Vawda, 2017) and
therefore, the largest proportion of medical scheme beneficiaries reside in Gauteng province (40%).
While the proportion of medical scheme membership has declined in other provinces, Gauteng has
recorded an increase of 1.4% (Council for Medical Schemes Annual Report, 2017–2018).

A non-probability judgment sampling method (Hair et al., 2017) ensured the inclusion of
(n = 250) beneficiaries directly paying monthly contributions, whose medical scheme memberships
exceeded 6 months. This sample size corresponds with prior similar studies (Edward & Sahadev,
2011; Li, 2015; Ngo & Pavelková, 2017).

In May 2019, primary data were collected using a face-to-face survey over a period of a month,
in the public locations near the public and private healthcare facilities by a team of skilled
fieldworkers. Each respondent self-administered a structured questionnaire written in English
language, which captured objective responses about perceived switching costs, satisfaction and
perceived marketing ethics of medical schemes. The ethical conduct of the researcher and ethical
treatment of the participants in the study, (i.e. consent, debrief the respondents about the study
purpose, rights to refuse or to withdraw from participation, assure them about disclosed data
privacy, data storage safety and thank them for their participation) were addressed.

The University of Johannesburg, College of Business and Economics (CBE) Ethical Committee
issued the Ethical Clearance Certificate.

4. Analysis and findings

4.1. Descriptive statistics

A total of 208 completed questionnaires were returned, yielding 83.2% response rate, which was
processed (i.e. coded, edited, tabulated) into SPSS Version 26 for multivariate statistical analysis,
and AMOS Version 26 tested the latent variables with their causal structure using a structural
equation modelling (SEM). The descriptive statistics of the sample profiles shown in Table 1
indicate that most respondents (24.0%) had 25–29 years of age. Many subjects were females
(53.4%) and 40.4% of respondents contribute up to R3 000 per month. Many subjects (41.8%) have
been members of their medical schemes for more than a period of 5 years, and most respondents
(65.9%) indicated that they have not switched before. The majority of the respondents are
members of the Discovery Health Medical Scheme (55.3%), followed by BankMed (20.2%),
Momentum (11.1%), and Bonitas (4.8%). Table 1 presented below is useful for understanding the
economic and socio-demographics of the target sample in this study.

4.2. Exploratory factor analysis (EFA)

In EFA, the Bartlett’s Test of Sphericity (Bartlett, 1954) and the Kaiser-Meyer-Olkin (KMO) measure of
sampling adequacy (Kaiser, 1960), determine the number of variables capturing the underlying relation­
ships of the factors (Pallant, 2010). Table 2 below shows that the model with Kaiser-Meyer-Olkin Measure
of Sampling Adequacy =.815; Bartlett’s Test of Sphericity, approximately Chi-Square = 3914.174;
df = 528, is significant p < .000, and explained 72.39% of the total variance.

The varimax rotation, as the traditional orthogonal approach, was used to minimise the number
of variables with high loadings on each factor (Pallant, 2010), and determine the suitability of all
33-item scale in the context of medical schemes in South Africa. Ethical Marketing Issues had one
item (EMI1 = .531) that cross-load with two items (ERC1 = .828; ERC2 = .688) of Economics Risk
Costs. Ethical Marketing Issues also had two items (EMI5 = −.698 and EMI9 = .497) that cross-load
with one item (SAT2 = .578) of Customer Satisfaction. These cross-loading items were deleted. The

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Table 1. Descriptive profiles of sample

Demographics n = 208 Percentage
Age
18–24 39 18.8
25–29 50 24.0
30–34 43 20.7
35–39 37 17.8
40–45 16 7.7
46–49 10 4.8
50 and more years 13 6.3
Gender
Male (%) 94 45.2
Female (%) 114 54.8
Monthly payment
Up to R3000(%) 84 40.4
R3000—R4000(%) 74 35.6
R4000—R5000(%) 31 14.9
R5000—R6000(%) 11 5.3
R6000—R7000(%) 4 1.9
More than R8000(%) 4 1.9
Duration of use
1 year < 2 years(%) 59 28.4
2 years < 3 years(%) 29 13.9
3 years < 4 years(%) 16 7.7
4 years < 5 years(%) 17 8.2
More than 5 years(%) 87 41.8
Have you ever switched service provider?
Yes(%) 71 34.1
No(%) 137 65.9

remaining items loaded above 0.50 on their expected factors, showing good reliability (Hair et al.,
1998). The eight iterations rotation procedure for refinement of the measurement scale explored
the 27 scale-items that tested the split-half reliability of the factors using Cronbach alpha
(Cronbach, 1951), with coefficients recommended above 0.7 (Malhotra, 2007), and closer to 1
representing a greater internal consistency reliability (Pallant, 2010).

A check for assumptions shows that multicollinearity (r = .9 and above) does not exist in this study as
the independent factors are not highly correlated, and Tolerance Value is greater than .10 and
Variance inflation factor (VIF) value is less than 10, indicating no sign of multicollinearity (Pallant,
2010). Table 3 below shows descriptive statistics of the constructs. Six-items of Ethical Marketing
Issues had alpha of .872 (M = 2.0507; St. Dev = .72563). Four items of Personal Relation Loss Costs had
alpha of .921 (M = 2.6454; St. Dev = 1.16830). Four-items of Evaluation Costs had alpha of .8663
(M = 3.5120; St. Dev = 1.06910). Four-items of Economic Risk Costs had alpha of .830 (M = 3.2917;
St. Dev = .94473). Three-items of Benefit Loss Costs had alpha of .912 (M = 3.5449; St. Dev = 1.29291).
Three-items of Monetary Loss Costs had alpha of .857 (M = 3.2821; St. Dev = 1.05792), and three-items
of Customer Satisfaction had alpha of .792 (M = 3.3471; St. Dev = .72181). The negative skewness
values ranging from Economic Risk Costs (−.323), Monetary Loss Costs (−.437), Customer Satisfaction
(−.514), Benefit Loss Costs (−.588), and Evaluation Costs (−.608) show that the values cluster at the
upper right-hand side of the standard normal distribution. The positive kurtosis values for Marketing

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Table 2. Item loading and factor analysis

Items EMI PRLC EC ERC BLC MLC SAT
EMI1
EMI2 .831
EMI3 .773
EMI4 .819
EMI5
EMI6 .802
EMI7 .669
EMI8 .733
EMI9
SAT1 .745
SAT2
SAT3 .821
SAT4 .781
ERC1
ERC2
ERC3 .757
ERC4 .777
ERC5 .775
ERC6 .590
EC1 .752
EC2 .843
EC3 .845
EC4 .744
BLC1 .931
BLC2 .908
BLC3 .861
MLC1 .839
MLC2 .841
MLC3 .753
PRLC1 .848
PRLC2 .861
PRLC3 .889
PRLC4 .893
Note I: KMO measure: 0.815 BTS = (Approx. Chi-Square = 3914.174) (df = 528) (Sig. = 0.000) Total variance explained:
72.39%. Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.
Rotation converged in 8 iterations.

Ethics (1.381) and Customer Satisfaction (.899) show the peaked distribution (i.e. clustered in the
centre), and kurtosis value for Customer Satisfaction (.899), below zero shows a distribution curve that
is relatively flat with many extreme cases in the data. This can be corrected by increasing “sample size
to exceed 200+ cases” (Pallant, 2010, p. 57).

4.3. Confirmatory factor analysis (CFA)

A CFA (Anderson & Gerbing, 1988), tested the reliability of the measurement model using Cronbach
alpha (Cronbach, 1951), Composite reliability (Fornell & Larcker, 1981), and Average Variance
Extracted (Fornell & Larcker, 1981) to confirm the discriminant validity (Fornell & Larcker, 1981)
of the interactions between the seven factors extracted in EFA.

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Table 3. Descriptive statistics of the constructs

Constructs Item Mean Std. Skewness Kurtosis Cronbach
Deviation alpha
Marketing Ethics 6 2.0507 .72563 1.093 1.381 .872
Personal Relational 4 2.6454 1.16830 .190 −.870 .921
Costs
Evaluation Costs 4 3.5120 1.06910 −.608 −.156 .866
Economic Risk 4 3.2917 .94473 −.323 −.117 .830
Costs
Benefit Loss Costs 3 3.5449 1.29291 −.588 −.790 .912
Monetary Loss 3 3.2821 1.05792 −.437 −.146 .857
Costs
Satisfaction 3 3.3471 .72181 −.514 .899 .792

A maximum likelihood estimation tested the covariance matrix in AMOS Version 26 to identify
the estimates of various parameters (Jöreskog et al., 1999). Data had no missing values. The
factor loading of the items in the constructs verified the convergent validity (see Figure 2 below),
with values above 0.5 showing a positive correlation among the scale-items of each factor
(Pallant, 2010). The size of the correlation coefficients for EMI7 = .64 below (>.70) was deleted
(Low λ). Subsequently, EMI8 = .69 below (>.70) was also deleted (Low λ). Satisfaction had only
three items, therefore, SAT1 = .69 below (>.70) was not deleted. The smaller correlations may be
accepted, but as a general rule of thumb, the size of the correlation coefficient must be .70 and
above (Hair et al., 2017). The measurement model with one covariance added between PRLC3
<-> PRLC4, which improved the measurement model with .38 (see Figure 2), showed good fit
indices as recommended by Schreiber et al. (2006). With Chi-square = 373.019; degrees of
freedom (df) = 230, the measurement model is significant at p < .000, with satisfactory (CMIN/
DF = 373.019/230 = 1.622, Goodness-of-fit index (GFI) = .877, Adjusted GFI (AGFI) = .840,
Comparative Fit Index (CFI) = .950, Tucker–Lewis index (TLI) = .940, Incremental Fit Index
(IFI) = .951, Normed Fit Index (NFI) = .881, Standardized Root Mean Square Residual
(RMR) = .084, and Root Mean Square Error of Approximation (RMSEA) = .055.

The Measurement Model tested the possibility existence of outliers or negative error variances
(also known as Heywood cases) and the standardised factor loadings above 1.0 or below −1.0 (Hair
et al., 1998). The residual covariance of −2.779 between BLC1 and ERC4 represents standard error,
and all the other standardised residuals had values less than two, showing appropriateness of the
measurement model (Jöreskog et al., 1999). Table 4 below shows the standardised regression
weights of CFA.

Table 5 below shows that the AVE is greater than shared variance with other variables as
recommended by Fornell and Larcker (1981). All the AVE values were above (>0.50), support­
ing convergent reliability (Fornell & Larcker, 1981), and composite reliability (CR) values were
all above (>0.70) verifying discriminant validity of the measurement model (Fornell & Larcker,
1981). The values of the square root of the AVE (bold values on Table 5) are greater than the
correlation coefficients, which allow for continuation of the structural model testing.

4.4. Structural model

The structural model in Figure 3, tested the path estimates and overall model fit, wherein it was
hypothesised that Economic Risk Costs (H1) and Evaluation Costs (H2) have direct negative
significant effects on Satisfaction, while Benefit Loss Costs (H3), Monetary Loss Costs (H4), and
Personal Relational Loss Costs (H5) have direct positive significant effects on Satisfaction.
Lower Satisfaction levels (H6) will negatively affect perceived Marketing Ethics of medical
schemes.

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Figure 2. Measurement model.

Notes II: EMI = Ethical

Marketing Issues;
SAT = Satisfaction,
ERC = Economic Risk Costs;
EC = Evaluation Costs;
BLC = Benefit Loss Costs;
MLC = Monetary Loss Costs;
PRLC = Personal Relationship
Loss Costs

The structural model in Figure 3 with one covariance added between PRLC3 <-> PRLC4 (to enhance the
structural model with .38); another one added between EC1 <-> EC2 (to improve the structural model
with .31); and the last one added between EMI2 <-> EMI3 (to improve the structural model with .19);
showed good fit indices as recommended by Schreiber et al. (2006). With Chi-square = 370.934; degrees
of freedom (df) = 233, the structural model is significant at p < .000, with satisfactory CMIN/DF = 370.934/
233 = 1.592, Goodness-of-fit index (GFI) = .877, Adjusted GFI (AGFI) = .841, Comparative Fit Index
(CFI) = .952, Tucker–Lewis index (TLI) = .943, Incremental Fit Index (IFI) = .953, Normed Fit Index
(NFI) = .882, Standardised Root Mean Square Residual (RMR) = .098), and Root Mean Square Error of
Approximation (RMSEA) = .053.

Table 6 shows that Economic Risk Costs had positive significant effect on Customer
Satisfaction (.236; p < .025), and Evaluation Costs had negative insignificant effect on
Customer Satisfaction (−.034; p < .736). Benefit Loss Costs had positive significant effect on
Customer Satisfaction (.221; p < .004) and Monetary Loss Costs had negative insignificant effect

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Table 4. Standardised regression weights (CFA)

Items/constructs Estimate
BLC1 <— BLC .896
BLC2 <— BLC .967
BLC3 <— BLC .784
EC1 <— EC .743
EC2 <— EC .836
EC3 <— EC .811
EC4 <— EC .768
EMI2 <— EMI .742
EMI3 <— EMI .734
EMI4 <— EMI .799
EMI6 <— EMI .809
ERC3 <— ERC .781
ERC4 <— ERC .726
ERC5 <— ERC .807
MLC1 <— MLC .812
MLC2 <— MLC .909
MLC3 <— MLC .737
PRLC1 <— PRLC .844
PRLC2 <— PRLC .894
PRLC3 <— PRLC .813
PRLC4 <— PRLC .854
SAT1 <— SAT .692
SAT3 <— SAT .712
SAT4 <— SAT .852

Table 5. Discriminant validity of the constructs

Constructs CR AVE SAT EMI ERC MLC BLC PRLC EC
SAT 0.798 0.571 0.755
EMI 0.855 0.596 −0.195 0.772
ERC 0.815 0.596 0.319 −0.078 0.772
MLC 0.862 0.676 0.148 0.136 0.519 0.822
BLC 0.915 0.784 0.284 0.000 0.200 0.320 0.886
PRLC 0.913 0.725 0.493 0.027 0.287 0.201 0.147 0.852
EC 0.869 0.625 0.185 0.161 0.542 0.533 0.309 0.163 0.790

on Customer Satisfaction (−.117; p < .232). H1, H2, and H4 were rejected. Personal Relational
Loss Costs had positive significant effect on Customer Satisfaction (.416; p < .001). Lastly, lower
Satisfaction levels had negative significant impact on perceived Ethical Marketing Issues of
medical schemes (−.184; p < .028). Therefore, H3, H5 and H6 were accepted.

Figure 3 above, also shows the squared multiple correlation (SMC) coefficients. Satisfaction
had 0.32, which suggests that 32% of the variance in Customer Satisfaction is explained by
customers’ perceptions of personal relationship loss costs and benefit loss costs. Marketing
ethics had 0.3, which suggests that 3% of the variance in customers’ perception of ethical
marketing is explained by overall satisfaction of customers with the medical scheme services.

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Figure 3. Structural equation

modelling (SEM).

Notes III: EMI = Ethical

Marketing Issues;
SAT = Satisfaction,
ERC = Economic Risk Costs;
EC = Evaluation Costs;
BLC = Benefit Loss Costs;
MLC = Monetary Loss Costs;
PRLC = Personal Relationship
Loss Costs. Moderation: inter­
action effect Sig. Not Sig.

Table 6. Structural path results

H Hypothesised Standardised Observed p < . p<. Result
paths path coefficients
H1 SAT <—ERC .236 .025 0.05 Rejected
H2 SAT <—EC −.034 .736 0.05 Rejected
H3 SAT <—BLC .221 .004 0.01 Accepted
H4 SAT <—MLC −.117 .232 0.05 Rejected
H5 SAT <—PRLC .416 .001 0.001 Accepted
H6 SAT <—EMI −.184 .028 0.05 Accepted
Notes IV: *p < 0.05, ** p < 0.01, *** p < 0.001

4.5. Moderation
The study tested moderation effects of medical scheme contributions and customer switching experi­
ence on the effects of personal relational loss costs and benefit loss costs on Customer Satisfaction, and
on satisfaction effects on the perceived marketing ethics, using the Johnson Neyman’s regression
technique.

4.5.1. Medical scheme contributions

When the South African government delivers the NHI fund through tax funding, rather than via
health insurance contributions, the entitlement to use health services will not be directly tied to
contributions (A. Gray & Vawda, 2017, 2019). Currently, many income taxpayers belong to medical
scheme and face the contributions that account for a large percentage of their income (A. Gray &
Vawda, 2019). Many South Africans earn below R6 000 per month per household, and those with
income levels above R15 000 per month are subsidised for the medical scheme cover. This means
people earning above the threshold (Erasmus et al., 2016). Recently, estimates show that medical
scheme contributions in South Africa are regressive across the members from different socio-
economic groups. Monthly contributions range from 15.8% of income before tax credits (and 9.2%
after tax credits) for the lowest income medical scheme members to 5.5% before and 4.7% after
tax credits for the highest income scheme members (A. Gray & Vawda, 2019). As the medical
scheme contribution is still a service condition imposed by employers (Erasmus et al., 2016), this,
therefore, necessitates the investigation of the following hypotheses:

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H7: Medical scheme contributions moderate the relationship between personal relational loss
costs and Customer Satisfaction.

H8: Medical scheme contributions moderate the relationship between benefit loss costs and
Customer Satisfaction.

H9: Medical scheme contributions moderate the relationship between Customer Satisfaction and
marketing ethics.

Table 7 below shows that the results of the interaction effect (γ = .1354; t-value = 2.1686) of
medical scheme contributions on the relationship between Benefit Loss Costs and Customer
Satisfaction (LLCI = .0123; ULCI = .2585), is significant at p < .0313. H8 is accepted while H7 and
H9 were rejected. Knowledge is required on the conditions under which this moderation effect is
significant (i.e. is it when medical scheme contributions are either low, medium, or high?). Table 7
shows that the moderation effect under the condition of low contributions (LLCI = −.1246;
ULCI = .1535), is not significant, p < 0.8382. The moderation effect under the condition of medium
contributions (LLCI = .0488; ULCI = .2469), is significant at p < .0036. The moderation effect under
the condition of high contributions (LLCI = .1131; ULCI = .4854), is highly significant at p < .0018.

Figure 4 below shows that the development of satisfaction is important for customers paying
medium monthly contributions and it is even important for those paying high monthly contribu­
tions. The difference is that an increase in benefit loss costs does not increase Customer
Satisfaction of customers who pay low contributions, but increasing benefit loss costs enhance
satisfaction of customers who make medium contributions, and increasing benefits loss costs
strongly enhance the satisfaction of customers who make high contributions per month.

4.5.2. Customer switching experience

Enhancing consumers’ perceived switching costs contribute to the entry barriers, especially if the firm’s
products and quality lack transparency to consumers do not provide meaningful and comparative
information (Competition Commission, South Africa. H, 2018). While consumers who perceive low

Table 7. Conditional effect of benefit loss costs on satisfaction at values of the moderator(s)
Monthly Effect Se t-value p-value Lower Upper Results
contribution
Interaction effect .1354* .0624 2.1686 .0313 .0123 .2585 Accept
Low .0144 .0705 .2044 .8382 −.1246 .1535 Reject
Medium .1479*** .0502 2.9436 .0036 .0488 .2469 Accept
High .2993*** .0944 3.1698 .0018 .1131 .4854 Accept
Notes V: 95% level of confidence; *p < 0.05; **p < 0.01; ***p < 0.001

Figure 4. The moderating effect Impact of Benefit Loss Costs on Customer Satisfaction
of medical scheme contribu­ under the influence of medical scheme contributions
tions on the link between 4
Customer Satisfaction

Benefit Loss Costs and 3.8

Customer Satisfaction. 3.6
3.4
3.2
3
0 0.5 1 1.5 2 2.5 3 3.5
Benefit Loss Costs

Low Medium High

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switching costs, and do not perceive additional value on the service they receive from a medical scheme
will switch to competing brokerages; however, many of them are reluctant to switch despite the limited
switch barriers imposed by medical schemes on consumers (Competition Commission, South Africa. H,
2018). The market complexity is that many consumers have a considerable apathy (i.e. emotions) and
consider it serious to switch medical schemes as those who switch lose credit points and are, therefore
disincentivised from switching (Competition Commission, South Africa. H, 2018). Furthermore, some
health professionals have violated the Constitution and other related laws, disregarded their profes­
sional code of ethics, and thus have demonstrated disrespect for patients’ rights including their families
(A. Gray & Vawda, 2018). Such unethical behaviour has a profound effect on the public image about the
firm (Pezhman et al., 2013). Negative ethical image and socially irresponsible behaviour will repel
customers from an organisation and its products (Mulki & Jaramillo, 2011), which therefore necessitates
the investigation of the following hypotheses:

H10: Customer switching experience moderate the relationship between personal relational loss
costs and Customer Satisfaction.

H11: Customer switching experience moderate the relationship between benefit loss costs and
Customer Satisfaction.

H12: Customer switching experience moderate the relationship between Customer Satisfaction
and perceived marketing ethics.

Table 8 below shows that the results of the interaction effect (γ = .2246; t-value = 2.1197) of
customer switching experience on the relationship between benefit loss costs and Customer
Satisfaction (LLCI = .0157; ULCI = .4334), is significant at p < .0352. H10 is rejected while H11
and H12 were accepted. Knowledge is required on the conditions under which this moderation
effect is significant (i.e. is it when customers have switching experience or do not have switching
experience?). Table 8 shows that under the condition where customers do not have switching
experience, the moderation effect (LLCI = −.1465; ULCI = .1719) is not significant, p < .8756, but
under the condition where customers have switching experience, the moderation effect
(LLCI = .1020; ULCI = .3724) is significant at p < .0034.

Figure 5 below shows that the development of Customer Satisfaction is important for customers
who have switching experience. The difference is that increasing benefit loss costs does not
increase the satisfaction of customers who do not have switching experience, but increased
Benefit Loss Costs enhance the satisfaction of customers with prior switching experience.

Table 9 below shows that the results of the interaction effect (γ = .2900; t-value = 2.6278) of
customer switching experience on the influence of Customer Satisfaction on perceived marketing
ethics (LLCI = .0724; ULCI = .5075) is significant at p < .0092. Therefore, H11 is accepted. Knowledge is
required on the conditions under which this moderation effect is significant (i.e. is it when customers
have switching experience or do not have switching experience?). Table 9 shows that under the

Table 8. Conditional effect of benefit loss costs on satisfaction at values of the moderator(s)
Switching Effect Se t-value p-value Lower Upper Results
Experience
Interaction effect .2246 .1059 2.1197 .0352 .0157 .4334 Accept
No switching .0127 .0807 .1568 .8756 −.1465 .1719 Reject
experience
Switching .2372*** .0686 3.4591 .0007 .1020 .3724 Accept
experience
Notes VI: 95% level of confidence; *p < 0.05; **p < 0.01; ***p < 0.001

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Figure 5. The moderating effect Impact of Benefit Loss Costs on Customer Satisfaction
of customer switching experi­ under the influence of switching experience
ence on the link between ben­ 4

Customer Satisfaction
efit loss costs and Customer 3.8
Satisfaction. 3.6
3.4
3.2
3
0 0.5 1 1.5 2 2.5
Benefit Loss Costs

No switching experience Switching experience

Table 9. Conditional effect of satisfaction on marketing ethics at values of the moderator(s)

Switching Effect Se t-value p-value Lower Upper Results
Experience
Interaction effect .2900 .1103 2.6278 .0092 .0724 .5075 Accept
No switching −.3118 .0818 −3.8117 .0002 −.4732 −.1505 Accept
experience
Switching −.0219 .0740 −.2956 .7679 −.1679 .1241 Reject
experience
Notes VII: 95% level of confidence; *p < 0.05; **p < 0.01; ***p < 0.001

condition where customers do not have switching experience, the moderation effect (LLCI = −.4732;
ULCI = .1505), is significant, p < .0002, but under the condition where customers have switching
experience, the moderation effect (LLCI = −.1679; ULCI = .1241), is not significant at p < .7679.

Figure 6 below shows that the development of perceived ethical marketing is important for
customers who do not have switching experience. The difference is that an increase in Customer
Satisfaction enhances perceptions of marketing ethics for customers who do not have switching
experience; however, increased satisfaction for customers who have switching experience does not
enhance their perceived marketing ethics of medical schemes.

5. Discussion and conclusion

This study provides insights regarding the management of perceived switching costs on Customer
Satisfaction, and the effect on perceived marketing ethics of medical schemes in the South African
healthcare sector. The study has profiled a large segment (24.0%) of consumers ranging between the
ages of 25 to 29 years old, the majority of whom are female consumers (53.4%). Many customers (55.3%)
identify with the Discovery Health Medical Scheme, and about 40.4% contribute over R3 000 per month.
The large membership (41.8%) exceeds a period of 5 years, and 65.9% of the consumers report having no
switching experience.

Figure 6. The moderating effect Impact of Customer Satisfaction on marketing ethics

of customer switching experi­ under the influence of customer switching experience
ence on the link between 3
Marketing ethics

Customer Satisfaction and 2.5

2
marketing ethics.
1.5
1
0.5
0
0 0.5 1 1.5 2 2.5
Customer Satisfaction

No switching experience Switching experience

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This study finds that economic risk costs positively impact Customer Satisfaction, which was an
unintended outcome. This result, therefore, supports the findings by Blut et al. (2014) who reported
that procedural switching costs positively relate with important relationship outcome of satisfaction.

It appears, therefore, that customers do not view themselves as “being locked-in” to the medical
scheme. Instead, customers perceive switching costs may attribute the view of “being locked-in” to
their own inability state to switch, as indicated by Burnham et al. (2003). This study, therefore, does
not find evidence supporting the direct negative impact of economic risk costs and evaluation costs
on Customer Satisfaction, therefore, support the findings by Burnham et al. (2003) who also did not
find this evidence. By contrast, M.A. Jones et al. (2000) used a holistic measure of switching costs and
observed supportive evidence showing the negative interaction effect.

The findings, therefore, show that Benefit Loss Costs have a positive significant effect on Customer
Satisfaction. This result supports the findings by M.A. Jones et al. (2007). Monetary loss costs do not
have significant effect on Customer Satisfaction in this study, and as Moliner (2009) reports, monetary
costs and service quality are fundamental factors for a private healthcare satisfaction. Moreover,
personal relation loss costs have a positive significant impact on Customer Satisfaction. This result
corroborates with the literature, (Julander & Söderlund, 2003; Meng & Elliott, 2009), showing the
impact of positive switching costs (social and lost benefits) on Customer Satisfaction. Lower satisfac­
tion levels were found to affect perceived marketing ethics of medical schemes negatively, which
confirms the results by Chonko et al. (1996) and Thomas et al. (2002).

The moderation effects of both medical scheme contributions and customer switching experi­
ence, as control variables on the interaction of personal relational loss costs and Customer
Satisfaction were not supported. However, evidence shows that these control variables moderate
interaction of Benefit Loss Costs and Customer Satisfaction. Results also show that increasing
Benefit Loss Costs enhance satisfaction of customers who contribute high and medium monthly
fees and for consumers with switching experience. The moderation of medical scheme contribu­
tions, as control variables on the negative interaction of Customer Satisfaction and perceived
marketing ethics, was not supported. The findings support the moderation effect of consumers
switching experience on the negative interaction of Customer Satisfaction and perceived market­
ing ethics. Increasing satisfaction of customers who have no switching experience enhances their
perceived marketing ethics of medical schemes.

5.1. Theoretical contribution

This paper contributes insights to the body of knowledge embracing the enlightened marketing
philosophy intended to enhance the long-term performance of the marketing system of the
medical schemes. This study also contributes to the literature on services marketing in various
ways. It has tested the structural model that uncovered insights on:

● the effectiveness of switching cost typology developed by Burnham et al. (2003) which
classified switching costs by type (procedural, financial, and relational) and direction (positive
and negative);
● Customer Satisfaction (R.L. Oliver, 1997); and on
● the resultant impact on perceived marketing ethics (Murphy et al., 1992) of medical schemes.

This approach is useful for various reasons. Firstly, Burnham et al. (2003) recommend the research
on the relationship between switching costs and satisfaction to examine whether, or when,
switching costs lead to customer dissatisfaction. Secondly, it clears the empirical evidence
shown in the literature regarding the overall effects of perceived switching costs on Customer
Satisfaction (Biedenbach et al., 2015; Chang & Chen, 2008; Sanjeepan, 2017). Thirdly, results
confirm the direct positive impact of switching costs (Personal Relationship Loss Costs and
Benefit Loss Costs) on Customer Satisfaction (Julander & Söderlund, 2003; Meng & Elliott, 2009).

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Lastly, the study confirms that lower satisfaction contributes negatively to perceived ethical
marketing activities, which supports the results by Thomas et al. (2002).

This study has uncovered knowledge regarding the moderation effects of the medical scheme
contributions and customer switching experience on Benefit Loss Costs and Customer Satisfaction.
Increasing Benefits Loss Costs impact satisfaction under conditions where members contribute
high and medium monthly fees and when customers have switching experience. Clearly, consu­
mers who do not have switching experience perceive a negative interaction of satisfaction and
marketing ethics. In general, this research study recommends the service firms to view switching
costs as an ethical problem instead of one of the economic costs incurred in switching a firm. This
view, therefore, embraces Distributive Justice as an ethics precept necessary to understand
enlightened marketing ethics (Ferrell & Ferrell, 2008).

5.2. Managerial implications

The medical scheme industry in Southern Africa should constantly monitor and evaluate strategies
and adapt swiftly to the rapidly changing needs of the emerging market. As a practical recom­
mendation in this study, it is advisable for managers of the medical schemes in South Africa to
coordinate a strategy of increasing Customer Satisfaction and switching costs. To improve
Customer Satisfaction, managers must also closely monitor and increase Personal Relations Loss
costs and Benefit Loss Costs by increasing additional services, rewards, discounts, special deals, or
savings, among others. By increasing the Benefits Loss Costs, managers will satisfy members who
contribute high and medium monthly fees and those with switching experience. Increasing service
benefits lead to lower perceived costs, and managers can improve service benefits and raise costs
with an ethical approach (i.e. assume the responsibility to improve customer value).

Julien Le Grand, LSE economist, states that in the choice and competition model, customers
choose between services offered by competing providers, whereas in the voice model, customers
express satisfaction (or dissatisfaction) through complaints directly to a service provider, or
a higher manager or an elected representative (Groenewoud et al., 2019). Resolving customers’
complaints is considered the proper means to avoid customer dissatisfaction, which in the norma­
tive paradigm of the marketing concept, is a strategy that resonates strongly with the marketers’
self-interests (Gaski, 1999). Managers should monitor the evolution of satisfaction among custo­
mers and avoid situations that could lead to dissatisfaction.

From enlightened marketing perspective, realizing marketing ethics, societal marketing, custo­
mer value, and suchlike factors can enhance Customer Satisfaction. Lower satisfaction levels
predict perceived unethical marketing practices by medical schemes; hence, managers must set
a higher standard of professionalism and ethical behaviour, and control inappropriate selling
through an intensive training of their salesforce and via newly appointed salesmen. The recruit­
ment of qualified salesmen and their subsequent training is crucial.

Enlightened marketing; ▪ innovative marketing; requires organizations to continuously seek new

and better ways of improving its products and services to avoid losing customers (Kotler &
Armstrong, 2008). The medical scheme practitioners in South Africa should develop marketing
strategies linked to the National Patients’ Rights Charter developed by the Department of Health,
which promotes the entitlement of members to information about their medical scheme and to
challenge, where necessary, the decisions of such a medical scheme (Health Professions Council of
South Africa, 2016).

Contact staff should do more to help customers make wise and informed decisions, and provide
relevant information in a range of languages, instead of coercing them to purchase. Clearly, the
medical schemes can position themselves as ethical brands in the market by endorsing features of
quality, integrity respect, honesty, diversity responsibility, and accountability. Enlightened market­
ing; ▪ sense-of-mission marketing; advocates for an organization to define its mission in broad

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social terms to serve best interests of both the consumers and the brand in the long-run (Kotler &
Armstrong, 2008).

Marketing practitioners in healthcare must ensure fair and balanced promotion of health ser­
vices, and avoid exaggerating claims in the context of reputable marketing. Oh and Yoon (2014)
recommend that ethical businesses adopt new marketing tactics reflecting ethical principles to
reinforce the consumers’ belief in ethical consumerism (e.g., using promotions to demonstrate
ethical obligations). Thus, in healthcare, a Consumerist Model may view patients as consumers,
whereas in the Socialist Model of the NHI, patients are viewed as beneficiaries or as entitled
“users”—the term used in the National Health Act (No 61 of 2003) (Rowe & Moodley, 2013). This
study highlights the potential introduction of the NHI in South Africa to directly improve satisfac­
tion with health service and not only reduce the role of medical schemes but also to propel them
to promote the prevention of unethical marketing practices. The NHI will make a provision for the
measurement of patient satisfaction, the results of which (according to the NHI White Paper, as
amended), will help the Office of Health Standards Compliance (OHSC) to identify gaps and put
corrective measures necessary to sustain patient satisfaction (Competition Commission, South
Africa. H, 2018). In developed nations like the UK, the beneficiaries to private medical schemes
were found to be less satisfied with the NHS than non-beneficiaries, and most had enrolled as
a condition of employer (Crow et al., 2002).

A clarity is required on the misunderstanding of the natural features of the proposed NHI
reforms. In particular, the misconception regarding expansion of medical scheme coverage to all
South Africans (A. Gray & Vawda, 2019). It is important for health practitioners in South Africa to
realize that even with a fully operational NHI, the supplementary health insurance products will
still have to be regulated (French, 2012), because “if the burden of cost containment is incurred by
consumers who already have limited healthcare access, then the quality of healthcare will erode”
(Furrow, 1988, p. 188). Consequently, what is likely to be an area of contestation is the idea of
consumers duplicating cover (i.e. by contributions to NHI and ongoing purchase of private cover)
(Erasmus et al., 2016).

The NHI fund faces hurdles before it can fulfil the role of private healthcare funding in South
Africa. As a potential solution, the Government must accept the critical role of and collaborate with
the private healthcare sector in facilitating NHI. This requires the private sector to be prepared and
willing to render health services beyond the boundaries of medical scheme target market; to assist
the government in serving higher volumes of patients from the public sector, and people who
cannot afford monthly contributions; and to charge more affordable prices (A. Gray & Vawda,
2019). Thus, through regular meetings and follow-up, involvement, and extensive consultations
will be necessary via the Quality Standards (QS) development process to ensure commitment and
buy-in at appropriate levels (A. Gray & Vawda, 2019). Clearly, the first step in the implementation
of the NHI reforms will necessitate the amendments to the Medical Schemes Act (131 of 1998) (A.
Gray & Vawda, 2017).

6. Limitations and future research directions

The limitations of external validity (e.g., generalising the findings to the broader population) can be
corrected by including the medical scheme beneficiaries in other provinces of the country. The
measurement error and scale improvements can include the eight facets of switching costs
proposed in the literature. Qualitative method can be adopted to gain more insights on the daily
personal and sensitive ethical issues facing members of medical schemes in South Africa.

A further point of investigation includes the consumers’ perceived value and concerns in relation
to higher hospital and related increasing costs that make the medical scheme membership to be
viewed as highly expensive and less accessible. Investigations should expand on the issue of
marketing ethics in the various services contexts with strong competition, high, and low switching
costs (e.g., telecommunication, banking, insurance, etc.). Research views the effect of switching

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costs as a “lock-in” strategy (Nie et al., 2018). Increasing switching costs by the affective dimen­
sion can avoid negative word-of-mouth by customers generated in a “lock-in” situation. Future
research can examine the possibility of increasing switching costs via anti-lock mechanisms to
increase satisfaction. Interestingly, the nature of satisfaction–loyalty interaction moderated by
switching costs in the medical scheme sector can be examined, as satisfaction alone is insufficient
to create loyal customers. In health services, Customer Satisfaction rates alone cannot be con­
sidered as evidence of high-quality care (Jacobsen & Hasumi, 2014).
Funding
The author received no direct funding for this research.
Author details
Thabang Excellent Mofokeng1
E-mail: tmofokeng@uj.ac.za
1
Marketing, University of Johannesburg - Auckland Park
Kingsway Campus, 1978 gelukwaarts, Kroonstad 9499,
South Africa.
Citation information
Cite this article as: Switching costs, customer satisfaction,
and their impact on marketing ethics of medical schemes
in South Africa: An enlightened marketing perspective,
Thabang Excellent Mofokeng, Cogent Business &
Management (2020), 7: 1811000.
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Academic research into marketing: Many

publications, but little impact?

Tim Hughes, Merlin Stone, Eleni Aravopoulou, Len Tiu Wright & Liz
Machtynger |

To cite this article: Tim Hughes, Merlin Stone, Eleni Aravopoulou, Len Tiu Wright & Liz
Machtynger | (2018) Academic research into marketing: Many publications, but little impact?,
Cogent Business & Management, 5:1, 1516108, DOI: 10.1080/23311975.2018.1516108

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Hughes et al., Cogent Business & Management (2018), 5: 1516108
https://doi.org/10.1080/23311975.2018.1516108
Received: 23 January 2018
Accepted: 22 August 2018
First Published: 24 August 2018
*Corresponding author: Tim Hughes,
Faculty of Business and Law,
University of the West of England, UK
E-mail: Tim.Hughes@uwe.ac.uk
Reviewing editor:
Femi Olan, Northumbria University,
UK
Additional information is available at
the end of the article
MARKETING | REVIEW ARTICLE
Academic research into marketing: Many
publications, but little impact?
Tim Hughes1*, Merlin Stone2, Eleni Aravopoulou2, Len Tiu Wright3 and Liz Machtynger4
Abstract: This article reviews some issues associated with the way in which aca-
demic research into marketing is evaluated by UK education authorities using their
research excellence framework (REF), in particular the impact component of the
assessment. It discusses the extent to which research by marketing academics
published in leading academic journals is relevant to the concerns of marketing
management and how this relevance or lack of it may be reflected in the relative
paucity of impact submissions in marketing. It considers the model of impact
assessment used in the REF and how this differs from how marketing academics
work in practice, giving three examples of significant impact that would not be
acceptable under current rules. It concludes by suggesting that alternative models
for impact should be investigated and suggests that using more practical models
might result in better engagement of marketing academics with business, leading
to greater relevance in teaching and employability of marketing graduates.
Subjects: Marketing; Marketing Research; Higher Education
Keywords: research excellence framework (REF); marketing; research; impact; training;
university; funding
1. Introduction
This article was prompted by analysis of the impact case studies from the UK’s 2014 Research
Excellence Framework (REF), one of the bases for allocating government funding to universities
and for rating universities. This analysis reveals the presence of very few marketing case studies
relative to other management fields. Given that marketing is an applied subject, covering both
marketing management and areas relevant to consumer and social policy, this lack of impact case
studies is considered by the authors to be surprising.
A review of recent literature also demonstrates a long-standing concern about the practical
relevance of academic research into marketing. While various proposals have been made to
PUBLIC INTEREST STATEMENT
This article relates to the allocation of public funds raised from taxation to the funding of academic
research into marketing at UK universities. It demonstrates that in a discipline whose justification is
fundamentally practical, i.e., that it helps organisations of all kinds, whether private, public or voluntary
sector, academic research is drifting away from practicality, creating a body of knowledge without much
impact and serving mainly to further the careers of marketing academics. This situation is considered
inappropriate, as it would in any discipline, whether practical or not, in the sense that it constitutes a
compromise in the mission of the discipline. If academic researchers into marketing believe that their
work is designed to train students to be more rigorous in analysis, for example, other disciplines—the
source disciplines of marketing, such as economics, statistics, psychology or sociology—might be better
equipped to do it.
© 2018 The Author(s). This open access article is distributed under a Creative Commons
Attribution (CC-BY) 4.0 license.
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increase the impact of academic research into marketing, there is little evidence of successful
implementation of these proposals or of increased impact of academic research into marketing.

One methodological contribution of this paper is analysis of the marketing case studies sub-
mitted to the Business and Management (B&M) Unit of Assessment (UoA) for REF 2014a and
comparison of these with those submitted by other disciplines to this UoA. We then analyse the
articles produced in the last year for top marketing journals to identify how relevant they might be
to different areas of marketing practice.

We then pose two questions: (1) Why has publishing in academic journals had such limited
influence on practice, to the extent that there is a paucity of impact case studies in marketing? (2)
Can marketing academics influence practice more directly? In exploring this second question we
provide examples of case studies from the authors’ consultative experiences of working with
private-sector firms.

We provide a partial answer to the above questions by suggesting that there are alternative
models of impact that could have been used. Three of these are suggested and investigated.

The article concludes with identification of how the situation can be improved, both in terms of
ensuring that academics do engage more with the practical agenda of business and of ensuring
that government funding of research is directed appropriately.

Finally, we suggest conclusions on the nature of the problem and recommendations for the
future.

2. Disclaimer
This article’s senior authors have no interest in the outcomes of the next government assessment
of university research, research excellence framework 2012 (REF2021), as they are all likely to be
retired by the time its results are announced. The article is a critique not of the publication of
research into marketing in academic journals, which are a necessary part of the advance and
codification of knowledge and its translation into teaching and eventual use in practice (McDonald,
2003). We acknowledge that many journals have tried to attract more articles with practitioner
impact, while asking authors of the more “academic” articles to be much more specific about
implications of their findings for practitioners. Nor does the article seek to criticise the efforts of
many marketing academics to engage with industry—indeed it provides examples of several
different modes of engagement outside academic journals. Rather, the article raises the question
of the extent to which the body of marketing academics, as a whole, engage with practice and
whether the approach to assessing the practical impact of research into marketing of the UK’s REF
is effective in capturing this. This is important because the behaviour of academics will be strongly
influenced by the way their work is assessed.

3. The practical relevance of academic research into marketing

Concerns over the practical relevance of management research have been raised since the 1940s
(Caswill & Wensley, 2007). There is a gap between academia and practice (Pfeffer & Fong, 2002;
Rynes, 2007). University research and teaching is criticized as irrelevant to business needs
(Bartunek & Rynes, 2014; Bennis & O’Toole, 2005; Huff, 2000; Mintzberg & Gosling, 2002; Starkey
& Madan, 2001). Marketing has also been criticized in this respect. Baker and Erdogan (2000)
quoted a survey of UK academics that suggested that the most pressing issue facing marketing
theory was integration of theory and practice. The problem is said to stem from research, teaching
and practice being seen as separate domains by academics (Mentzer & Schumann, 2006; Piercy,
2002), while marketing executives require research focused on solving problems in specific con-
texts (Storbacka, 2014). The widening divergence between marketing academia and practice is
seen to damage the field’s health (Reibstein, Day, & Wind, 2009). While much criticism relates to
relevance to marketing management, marketing has responsibilities to stakeholders other than

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https://doi.org/10.1080/23311975.2018.1516108

practitioners (Hunt, 2002). Research into marketing may be relevant to many areas of social and
economic policy and so should make an impact in these areas.

The point about practical relevance goes to the heart of the question of what makes for good
quality theory. Theory should be based on both originality and practical utility (Corley & Gioia,
2011; Piercy, 2002) and so should be based in the reality of the human experience of practice
(Jarzabkowski, Mohrman, & Scherer, 2010; Knights & Scarborough, 2010; Mason, Kjellberg, &
Hagberg, 2015). Collaboration with practitioners, customers and stakeholders is an important
element in theory development (Brodie, 2017) and in marketing management. This requires
understanding of how research is relevant to practitioners’ roles in their organizations (Jaworski,
2011). Sheth and Sisodia (1999) suggest that marketing is more context-dependent than many
fields of scientific enquiry and that its context is changing due to electronic commerce, market
diversity, new (post-industrial age) economics and a stronger focus on cooperation instead of
competition. Since the article of Sheth and Sisodia (1999), the marketing communications envir-
onment has changed greatly (Keller, 2009), with the proliferation of digital commerce changing
how suppliers and customers transact (Keller, 2009) and social media and blogging changing how
suppliers and customers communicate (Kietzmann, Hermkens, Mccarthy, & Silvestre, 2011; Valos,
Fatemeh, Casidy, Driesener, & Maplestone, 2016). The impact of changing context on theory
development is therefore very significant. Harrigan and Hulbert (2011) suggest that the curriculum
of marketing courses does not reflect how technology has changed the context.

Another contextual argument relates to how far research into marketing covers different
sectors. Ankers and Brennan (2002) research with business-to-business (B2B) managers found
little awareness of current research and thinking, with any awareness being based on a
previous generation of textbooks. Lilien (2016) argues that with a similar economic weight of
B2B and B2C transactions, the two sectors might expect similar levels of academic attention.
However, that is not the case, with B2B marketing accounting for a small fraction of academic
research attention.

The divide between marketing academia and practice has been linked to a decline in marketing’s
strategic influence in organizations (McDonald, 2009; Webster, Malter, & Ganesan, 2003, 2005).
Marketing’s role in organizations is ill-defined and marketers fail to use tools that could make them
more accountable (Baker & Holt, 2004). Yet according to McDonald (2003), only 4% of articles in
the foremost academic marketing journals addressed the top 10 issues of concern to practitioners.
As Jaworski (2011) observes, the academic marketing community is split on the desirability of
collaboration with practice.

4. Marketing impact case studies in REF 2014

The UK’s REF periodically reviews each university’s research, with implications for future funding.
REF 2014b included a new element requiring universities to provide case studies demonstrating
the wider impact of their research. Impact was defined as “any effect on, change or benefit to the
economy, society, culture, public policy or services, health, the environment or quality of life,
beyond academia” (REF, 2014b) and published a report analysing the REF impact case studies
(King’s College, London, 2015). The process was specified as follow:

An impact case study is a short four-page document which has five sections:

(1) Summary of the impact

(2) A description of the underpinning research
(3) References to the research
(4) Details of the impact
(5) Sources to corroborate the impact.

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Each case study was assessed by using two criteria: (1) Reach—“the spread or breadth of influence
or effect on the relevant constituencies” and (2) Significance—“the intensity or the influence or
effect” (REF, 2014b).

The guidelines for the case studies stressed that they needed to demonstrate that a change
beyond academia had taken place as a result of the research (REF, 2014b Report).

This latter approach may be problematic, for marketing and perhaps for other disciplines. In the
authors’ view, some of the best academic marketing writings either document recent changes in
marketing, providing a basis for enhancing and modernising marketing teaching and learning, and
for training future generations of marketers, or provide concepts and findings which may be used
by many marketers, who may be unknown to the writers. Indeed, one of your authors has engaged
in many projects with commercial clients, the first stage of which was a review of academic
literature and its translation into useful material for the project (Stone, 2013). However, given
that impact case studies are the basis of assessment, it is interesting to note the divergence
between marketing and other management disciplines in terms of the number of impact case
studies submitted. However, it is not the purpose of this article to examine areas outside market-
ing, which is not within the competence of the authors, though such an examination seems
sensible.

The model adopted seems at variance with thinking on the development of knowledge and its
relationship with innovation, particularly in areas involving emergent concepts, where interaction
between the agents involved should be a key focus, particularly but not exclusively in manage-
ment disciplines (Snowden, 2003). It is also at variance with current thinking of innovation, which
has moved away from the simplistic linear model (whether based on supply-push—simplistically,
innovators produce innovations which are then applied, or demand pull—simplistically, customers
require change and innovators respond by innovating) to a model based on much more compli-
cated relationships and feedback and communication and other processes, taking place between
the different stages of the innovation process and the different participants, with different types of
process at work in different disciplines and sectors (Freeman & Soete, 1997; Pavitt, 1984). This
applies particularly to the marketing ecosystem (Stone, 2014). This view of the creation of knowl-
edge might lead to questioning of the use of the term “impact”, as it implies a linear view—
research is done and then it has an impact. In addition, the ecosystem view questions the focus on
the application of university research outcomes in the impact cases, rather than how a team works
across the boundaries between academia and industry. We could even argue that where these
boundaries do exist, it is evidence of failure in the research process.

5. What the marketing and management impact case studies covered

The impact cases covered in this article were submitted to the B&M UoA. They are publicly
available (REF 2014a Impact Case Studies Database) and evidence the economic, policy, environ-
mental and societal impact of B&M research (Pidd & Broadbent, 2015). A total of 410 studies are
included in the B&M UoA REF Impact Case Study database (See Table 1). A significant sub- area
within this is “Commerce, Management and Tourism services” containing 228 cases and within this
Marketing, containing 9 cases. Commerce, Management and Tourism services also include a B&M
category with 167 cases. So rather confusingly, within the overall B&M UoA there is a sub-category
called B&M, covering areas such as Human Resource Management, Operations Management,
Organisation Studies, Strategy and some other subjects (Hughes, Webber, & O’Regan, 2017).

Table 2 lists the nine impact case studies classified as Marketing. Four mainly relate to practice,
four mainly to policy impacts and one, “Improving the lives of ageing consumers through products
and service innovation”, could be said to have both policy and practice impact.

This is a low number for a subject so widely represented in B&M departments—Marketing

represents just 2.2% of the 410 cases in the B&M UoA, compared with, say, the 153 cases

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Table 1. Impact cases in B&M UoA

Number of cases classified as: Number of cases
Business & Management UoA 410
Sub-category classified as: Commerce, Management 228
and Tourism services
Sub-category classified as: Marketing 9
Sub-category classified as: Business & Management 167*
*Hughes et al. (2017) also found 4 more cases studies that could have been classified as Marketing within the
Business & Management sub-category.

Table 2. Impact cases classified as marketing in REF 2014

Case Practice Policy Type of impact
(1) Telstra switching study x Marketing strategy for a
company
(2) Influencing policy on alcohol marketing to x Social policy
young people

(3) Digital Signage for shopping malls & retail x Technology & advertising
stores

(4) Improving consumer decisions & outcomes x Consumer behaviour &

through regulatory decisions regulation

(5) Improving lives of ageing consumers x x Social policy

through products & service innovation

(6) Measuring the power of emotion in adver- x Advertising

tising

(7) Shaping town-centre policy & strategy x Social policy & town planning
through consumer-based research

(8) Sustainable growth for farming & small x Marketing practice

food businesses through use of consumer
insight

(9) Young people & alcohol policy: informing a x Social policy

critical evidence-based debate that chal-
lenges popular stereotypes

classified as Economics. This should be of concern to marketing academics. It prompted the

authors to write this article. In the next section, we review the content of leading marketing
journals and the role of journals in research impact.

It is also worth noting that only three of these cases (numbers 1, 3 and 6) related purely
to commercial marketing, with the others relating primarily to social policy or regulatory
matters. Of course, it is true that marketers have become increasingly and productively
involved in such matters, partly due the focus on behavioural economics and the benefits
of using marketing techniques to “nudge” citizens to make the “correct” decisions, but that
is neither the primary activity of marketers nor the central focus of marketing teaching.

6. Journal review
We now turn to the question as to whether the lack of relevance apparently demonstrated by
REF14 is reflected elsewhere, by analysing the situation in leading marketing journals.

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The leading marketing journals are significant because academics are expected to show
that they can publish in these journals (Seggie & Griffith, 2009). This is a contentious issue as
there are still a hard core of academics even in top universities (the Russell Group) who
choose not to publish, but do teaching, administration and mentoring of students—hence the
debate in universities as to what to do with those who do not publish. We chose marketing
journals rated 4 and 4* in the Association of Business Schools (ABS) list––to represent leading
journals. While all articles submitted for the REF are reviewed and rated on their own merits,
the ABS list is often used as a proxy measure of quality in UK Business Schools, and as a
target and method of assessment for staff. Table 3 shows the description of each journal
from their website.

Most journals state the aim of reaching practitioners as well as academics. The Journal of
Marketing states that its target market is “thoughtful marketing academicians and practitioners”.
The Journal of Marketing Research is aimed at “technically oriented research analysts, educators,
and statisticians”. Marketing Science seeks “to reach a diverse audience well beyond academics in
quantitative marketing”. International Journal of Research in Marketing targets “marketing scho-
lars, practitioners (e.g., marketing research and consulting professionals) and other interested
groups and individuals”. The Journal of Retailing does not state its target readership but is
concerned with “application with respect to all aspects of retailing, its management, evolution,
and current theory”. The Journal of Marketing Science “serves as a vital link between scholarly
research and practice”. Two of the journals (Journal of Consumer Psychology and Journal of
Consumer Psychology) do not make a claim to reach practitioners.

The authors analysed articles published in these leading journals in the 12 months to October
2017—a total of 431 articles. We focused on the content of the articles in relation to their
relevance to different groups of marketing practitioners and also in the contexts covered. Our
analysis showed that the nearly all articles contained information of potential use to different
practitioners. Table 4 lists the practitioners to whom there were articles of potential interest.

Our analysis suggests that articles published in leading journals do cover information of rele-
vance to different practitioners, but the low level of impact case studies in REF 2014a suggest that
either that little of this research is having a direct influence on practice or that the methodology for
assessing practical impact is imperfect in the case of marketing. This raises key questions:

● Why does publishing in academic journals have limited direct influence on practice?
● How can marketing academics influence practice more directly?

7. Why does publishing in academic journals have limited direct influence on practice?
Despite the claims of many of the journals to reach practitioners, evidence suggests that journal
publication has little direct influence on practice. Few marketing practitioners read marketing
journals (Ankers & Brennan, 2002; Crosier, 2004; Gray, Ottesan, & Matear, 2005). First and fore-
most, journal articles are written in a style that is challenging to read for non-academics. Most
practitioners do not have the time or culture of referring to journals to find something that might
be relevant/actionable. While many journal articles have a section on managerial implications, this
section is often the weakest part of an article because it can be difficult for an academic to
understand and write about the implications if they are not engaged with practising managers in
discussions about the research. The result is often recommendations that are weak, e.g., “practi-
tioners should pay more attention to this area” and unspecific.

It is possible that the practical impact takes place through other channels than journal
publication, more in the case of marketing than in other disciplines, but this would need
researching. While our analysis suggests that articles in leading journals do cover subjects of

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Table 3. Journal descriptions and number of articles published in the 12 months to October
2017
Journal and description No. of articles
Journal of Consumer Psychology 51
“. . ..publishes top-quality research articles that contribute both theoretically and
empirically to our understanding of the psychology of consumer behavior.”
Journal of Consumer Psychology 73
“. . ..publishes scholarly research that describes and explains consumer behavior. Empirical,
theoretical, and methodological articles spanning fields such as psychology, marketing,
sociology, economics, communications, and anthropology are featured in this
interdisciplinary journal. The primary thrust of JCR is academic, rather than managerial,
with topics ranging from micro-level processes (such as brand choice) to more macro-level
issues (such as the development of materialistic values).”
Journal of Marketing 46
“. . . editorial objectives. . . are (1) to advance the science and practice of marketing (to
make a difference by adding to what we know about marketing phenomena and changing
how we study and practice marketing) and (2) to serve as a bridge between the scholarly
and the practical, each of which has a vital stake in what’s happening on the other side.
The target audience . . .. are thoughtful marketing academicians and practitioners. The
word ‘thoughtful’ in the statement of target audience has important implications. It
implies that the reader, whether academician or practitioner, is knowledgeable about the
state of the art of the topic areas covered in JM.”
Journal of Marketing Research 60
“Journal of Marketing Research concentrates on the subject of marketing research, from
its philosophy, concepts, and theories to its methods, techniques, and applications. This
bimonthly, peer-reviewed journal is published for technically oriented research analysts,
educators, and statisticians.”
Marketing Science 51
“. . .. an Institute for Operations Research and the Management Sciences (INFORMS)
publication (SSCI indexed). We invite authors to submit for peer review their best
marketing-oriented research. We accept many types of manuscripts. Please consider us as
an author-friendly outlet for your research. We are THE premier journal focusing on
empirical and theoretical quantitative research in marketing. Ultimately, we seek to reach
a diverse audience well beyond academics in quantitative marketing. It is unnecessary,
however, for every article to reach a diverse audience. However, in evaluating individual
manuscripts, we will consider the ultimate audience for the article (e.g., marketing
managers, general managers, public policy makers, regulators, consumers, consultants,
market research professionals, other disciplines, etc.) and require evidence that the
research can impact at least that audience.”
International Journal of Research in Marketing 62
“. . .. aims to contribute substantially to the field of marketing research by providing a high-
quality medium for the dissemination of new marketing knowledge and methods. Among
IJRM’s targeted audience are marketing scholars, practitioners (e.g., marketing research
and consulting professionals) and other interested groups and individuals.”
Journal of Retailing 34
“. . .. devoted to advancing the state of knowledge and its application with respect to all
aspects of retailing, its management, evolution, and current theory. The field of retailing
includes both products and services, the supply chains and distribution channels that serve
retailers, the relationships between retailers and members of the supply channel, and all
forms of direct marketing and emerging electric markets to households.”
Journal of the Academy of Marketing Science 54
“. . .. devoted to the study and improvement of marketing and serves as a vital link
between scholarly research and practice by publishing research-based articles in the
substantive domain of marketing. Manuscripts submitted for publication consideration in
JAMS are judged on the basis of their potential contribution to the advancement of the
science and/or practice of marketing.”
Total 431

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Table 4. Practitioners who might be interested in material from articles

Expert/specialist in consumer behaviour perhaps in large agency/consultancy/market research
Marketing directors/managers
Customer management
Data analytics specialists
Marketing communications management
Brand management
Sales management
Digital marketing specialists
Providers of marketing systems and data, whether internal or external
Corporate communications specialists
Public relations specialists

potential interest to practitioners, the question remains as to whether they are covering the
questions of contemporary importance to marketing managers.

One problem relates to the nature of academic articles. The focus on narrow research questions
and the search for generalisability leads to a common formula—take a concept, narrow it to make
it researchable, find a sample—often not representative of any market—which is researchable,
and produce conclusions which are only valid for that sample, but which the researchers try to
generalise. They are forced to do this because of the methodological emphasis of many, though
not all, journal editors.

In informal discussions between the authors and editors of several journals, it has emerged that
some marketing journals are trying to break away from this paradigm, to include articles which
might be classified as “thought leadership” or indeed theoretical innovation, but the journals may
be hampered in this process by lack of appropriate expertise on editorial boards to judge the value
of such articles, though several now have editorial boards with significant numbers of
practitioners,

Academic journals are in competition with many other sources of influence and information for
the attention of time-poor practitioners, particularly the growing volumes of content provided by the
many types of companies trying to influence them, e.g., management consultants, marketing
agencies, marketing systems and data providers (Ankers & Brennan, 2002; Crosier, 2004; Piercy,
2002), so it is unsurprising that practitioners may not spend time looking for relevant academic work.
While journals may be an important route to sharing research among marketing academics, they
may not be the best route to widening the impact of academic research on marketing management.

A final issue which one of the authors has focused on is whether the journals’ practice of
focusing on citations by other academics as evidence of impact, and of ranking agencies using
resulting “impact” factors as contributor to their ranking of journals is leading to an incestuous
cycle which is becoming increasingly detached from the reality of business (Stone, Spero, &
Aravopoulou, 2017b)

8. How can marketing academics influence practice more directly?

So, what can academics do to influence practice more directly? One option is to take their research
out to practice, even integrate it with practice. This involves identifying to whom it might be
relevant, promoting their work in general, and creating a dialogue, from which research projects
may be defined or finding ways to use previous research done by the initiating academics or
indeed other academics.

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One of the keys to impact is understanding a particular role in the organization and selecting a
specific “route to impact” for executives in that role (Jaworski, 2011). This means that integrating
research and impact depends on identifying the practitioner community, as Hughes, Bence,
Grisoni, O’Regan, and Wornham (2012, pp104) suggest: “What is needed is a debate on how
marketing academia can more effectively engage with the wider field of marketing practice, for
example managers involved in customer service; customer relationship management; sales and
key account management, to name but a few. This may also require some consideration of the
marketing field’s overlapping areas of interest with certain sectors such as technology, innovation,
entrepreneurship and others. Also, consideration of the different contexts in which aspects of
marketing are practised, such as smaller businesses (SMEs), family businesses, not-for-profit
organisations and the public sector”.

Integrating research and practice has the added benefit that the “customers” for the
research may also be its funders. It also has the advantage that the research is fully funded
by clients, so that perhaps paradoxically it should not require public funding. In the remain-
der of this article, we provide three case studies of how research and impact can be
integrated.

9. Integrating research and practice: case studies

9.1. Case 1 marketing agencies and their clients’ research

Tim Hughes and Mario Vafeas have been researching various aspects of how marketing agencies
co-create with clients. The results have been published in the conventional way through academic
conferences and academic journals (Hughes & Vafeas, 2014, 2015, 2017; Hughes, Vafeas, & Hilton,
2018; Vafeas & Hughes, 2016; Vafeas, Hughes, & Hilton, 2016). However, Hughes and Vafeas were
keen to take their research findings more directly to practitioners. The first step was to identify
groups of practitioners who might be interested in the results. In this case the target practitioners
were obvious—the marketing agency professionals, particularly those on the client facing side of
the business and clients working with agencies. Table 5 summarises the engagements with
practice in sharing and discussing the research results:

The route to engaging with practice was through professional practitioner networks, as they
have established channels for communicating with their members and have firmly established
relationships. The professional networks promoted and endorsed the events and gained good
numbers of participants. For the professional network, the benefit was that they were providing
access to relevant and leading-edge research relating to their members’ needs.

The first three workshops run with Bristol Media and Chartered Institute of Marketing were paid
for events and were financially self-sustaining. The June 2017 workshop with Bristol Media was
also a paid for event. The presentation events all fitted into regular meetings that professional
associations put on for their members. During these presentations, Hughes and Vafeas offered to
work with individual agencies and this resulted in individual agency workshops, running between
January 2015 and October 2017. In total, the events led to engagement with 525 practitioners in
sharing the research and discussing the implications for practice.

It is not easy to demonstrate that engagement with practice leads to impact because of the
practical difficulties in attributing cause and effect. The numbers of practitioners attracted to the
workshops and presentations suggests a high level of interest in the research subject area. A
proviso to this is that it proved much easier to attract agency practitioners than client practi-
tioners. This may be that the subject is perceived to be key to the future success of agencies, but is
less of a priority to clients, who may feel that they can change their agency if things go wrong.
Feedback from the workshops provided evidence of what the participants thought were important
and evidence of intention to make changes in practice, as a result of the research. The workshops

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Table 5. Engagement with practice in sharing research results

Event Timing Collaborator(s) Participants
Series of three workshops July to November 2014 Bristol Media and 103 agency & client
based on original dyadic Chartered Institute of practitioners
client agency research Marketing
Presentation at Bristol July 2015 Bristol Media 84 agency practitioners
Media Masterclass. Based
on original research a
feedback from first three
workshops.
Presentation at Bath & September 2015 Bath & Bristol Marketing 30 agency & client
Bristol Marketing Network Network practitioners
(Bath). Based on original
research a feedback from
first three workshops.
Presentation at Bath & September 2016 Bath & Bristol Marketing 50 agency & client
Bristol Marketing Network Network practitioners
(Bristol) event. Based on
original research a
feedback from first three
workshops.
Presentation at Design February 2017 Design Business 50 agency & client
Business Association Association practitioners
breakfast meeting
(London). Based on
original research a
feedback from first three
workshops
Presentation/discussion May 2017 Bristol Media and 25 agency & client
sessions at Business Business West practitioners
West/Bristol Media
breakfast meeting. Based
on further stage of client
research.
Workshop based on June 2017 Bristol Media 54 agency practitioners
further stage of client
research
Presentation and September 2017 Direct Marketing 17 agency practitioners
discussion at Direct Association
Marketing Association
evening event. Based on
further stage of client
research.
Nine separate workshops August 2015–October Individual agencies 112 agency practitioners
with individual agencies 2017
and follow-up with each
agency.
Total number of 525
practitioners engaged
across all events

with individual agencies provided the opportunity to revisit many of the agencies to get feedback
on change that had been made, following the initial workshops.

Hughes and Vafeas have systematically collected this evidence with a view to compiling an
Impact Case Study for REF 2021. It will be interesting to see whether this is accepted and if
so how it is rated. It represents only one approach to the engagement of industry in
research. One interesting aspect is the difference in engagement between the agencies
and the clients. However, this may be partly because in the authors’ experiences, agencies
and other third parties (such as management consultancies) are increasingly asked by

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clients to take on roles relating to determining the direction of marketing strategy (either
overall or for areas such as marketing communications, particularly digital marketing and
customer insight). Therefore, they are more “thirsty” for engagement with academics whose
thinking might be useful.

9.2. Case study 2 using published research to support marketing strategy and training
Merlin Stone’s career has over 40 years combined academic teaching and research work with
industrial consultancy and training. His projects range from advising on marketing strategy, help-
ing implement new directions in marketing, providing thought leadership content for B2B market-
ers to use with their clients and for public relations work, and marketing and sales training.
Because of his familiarity with the academic literature, this is always one of the first starting
points for work in all these categories, to identify whether academics (not just in marketing) can
make a useful contribution to the work in which he is involved. In some cases, the thought
leadership output is documented later as an academic publication. In other cases, the article is
written as part of a review process, to bring together thinking from many different academic and
commercial areas, to develop new concepts or adapt existing ones for use in consultancy and
other projects.

Recent examples of work of this kind are given in Table 6.

The authors’ relationships with senior marketing academics around the world has enabled them
to identify many other examples of such work, visible in the “white papers” or thought leadership
articles published by academics with commercial sponsorship, so it is clear that this phenomenon
is not confined to your present authors.

The impact of this kind of approach varies according to the use made of the subsequent material
by the client, and so might not be easy to measure by current methods. However, given that
measurement of impact in this area is largely dependent on evidence supplied by the commercial
client for this work, it would not be hard to devise a measurement process, perhaps using
predefined criteria concerning use of the work.

9.3. Case study 3: using research to support the development of industrial training material
Another way to apply academic research is in development of industrial training programmes,
in this case, a programme run by Customer Essential Ltd. (https://www.customeressential.
com/), involving two of the authors of this article, for training key account managers, with the
aim of transforming key account managers into managing directors of accounts. The pro-
gramme included research, training, events and projects supported by mentoring with the
objective of rapidly improving the leadership skills and performance of key account managers
at Royal and Sun Alliance Insurance, in their management of their intermediated insurance
customers—retailers, banks and others—who resold the company’s insurance. Royal and Sun
Alliance’s B2B relationships were strong, but the company wanted to strengthen and develop

Table 6. Examples of academic marketing research applied in recent articles different ways
Thought leadership work Consultancy work Review process to generate/
subsequently published as an subsequently published as an adapt concepts
academic article academic article
Stott, Stone, and Fae (2016) Stone and Laughlin (2016) Stone et al. (2017a)
Stone (2012) Stone (2014) Parnell, Stone, Stott, Aravopoulou,
and Timms (2017)
Stone (2011b) Stone and Woodcock (2013) Stone and Woodcock (2014)
Stone (2009) Stone (2011a) Stone (2016)

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these relationships, with the aim of becoming the “most trusted and admired partnership
business in UK Financial Services”.

Previously published academic research, in marketing, sales, strategy and organisational devel-
opment, was used at every stage of the design and delivery of the programme, to provide the
conceptual foundation of the programme. Consultancy practice, documented in commercial
research (Dalglish, 2016), had demonstrated the existence of a gap in strategic and leadership
skills in B2B customer management, leading to focus on short-term outcomes and tactical account
activity, with little long-term impact on the strategic relationship between suppliers and clients
and therefore lower impact for both the organisations involved.

Many customer management assessments and research papers (Stone, Gamble, Woodcock, &
Foss, 2006) have highlighted “leadership buy-in”, “continuity”, “engagement”, “clarity of strategy”
as central to the delivery of successful customer strategies. For many organisations, resulting
programmes of activity have been focused on communicating and selling programmes of activity
to leaders, rather than focusing on the leaders themselves, which was therefore adopted as the
aim of the training programme, which involved the creation of an academy, designed to unlock the
leadership potential of leaders of the account management teams.

The consultants of Customer Essential used analysis of each account director’s situation, their
consultants’ experience of success in other customer management leadership situations, and
research into the success factors of strong and successful leaders, particularly in innovation
(Miller, Klokgieters, Brankovic, & Duppen, 2012), to identify five key that were required to take
leadership to the required level:

(1) Thinking like a CEO—recognising different leadership styles, unlocking the thinking styles
and approach of the account directors and managers involved. Enabling them to broaden
their horizons and consider the challenges of their market and customers from all angles,
and set their own vision for the future.
(2) Cross-functional leadership—formally recognising the challenge of operating and commu-
nicating across functions/matrix and cultures, building stories and communicating in differ-
ent ways to engage, taking on board and channelling feedback from the team, building
effective teamwork.
(3) Strategic leadership—providing a more inspiring future for their customers, understanding key
levers to pull to address the issues they face, taking control of their own targets and plans.
(4) Innovation—using strategies and tools to create new ideas, understanding how to channel
insight into new propositions or changes, creating an approach to innovating with their
customers.
(5) Delivering partnerships—business for business—understanding what partnership means,
understanding where they are with their customers, what it takes to influence NPS/satisfac-
tion, building joint goals, influencing relationships and stakeholders, driving change.

Literally hundreds of academic sources were consulted for each of the above areas, so it would be
inappropriate to cite them—further details can be obtained from Customer Essential.

The design principles of the programme were as follows:

● Ensure a strong research base—review of publications and business articles—many academic

and grey literature sources on customer relationship management, leadership, account man-
agement and sales training were consulted
● Focus on tangible outcomes for business and individuals
● Incorporate the programme into the business strategy and calendar

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● Ensure events/face-to-face sessions were maximised with targeted, short content and reality-
based working sessions
● Provide real and relevant customer and internal research into the programme
● Ensure that there was a preparation, event, follow up and link to next stage in each phase of
the project
● Ensuring all material was published, memorable and interesting.
● Provide individual mentoring/coaching for each participant
● Link in other training and knowledge material to the schedule
● Gain accreditation for the programme

A learning journey was created by Customer Essential for the participants, linked to a skills
development programme created through online/webinar and lunchtime sessions. There were
individual and business-related deliverables at each stage of the programme, with the option
(taken by two participants) of progressing to a Master’s degree in sales management at the
University of Portsmouth, with their work on the course being used to gain credits through an
Accreditation of Prior Experience and Learning initiative, others may follow.

The programme’s main objective was success with customers. In the first year of the pro-
gramme, RSA saw big improvements in their clients’ Net Promoter Scores across their clients—
more than 30 points. In total, 80% of their partners were extremely happy with their account
managers. More than 40% of customers were active promoters of the company. Many participants
in the programme were promoted or took on exciting projects for the business. The approach of
embedding the learning firmly in the company’s requirement to be market leaders in account
management ensured that individuals applied their learning and thinking to their work. Partnership
between the consultant responsible for programme design and one of the authors as academic
lead proved to be a critical factor in the success of the programme.

This focused programme was developed because, before contracting with Customer Essential,
the consultant, Royal and Sun Alliance had rejected the option of generic key account training
from a source at a university or for the individuals to be trained by taking their own individual
Masters courses, due to lack of focus and lack of link with the company’s business priorities.
Programmes in which individuals work independently of the company can lead to a high attrition
rate. The company’s own research led them to discount the option for individuals to study for their
own degrees due to the lack of focus and the risk of a weak link to the company’s business
priorities. As a result, a high percentage of the talented team stayed with the company, in a
situation where it is difficult to retain the most talented and where education and training
programmes which work independently often encourage them to leave.

The impact of this type of approach could be formally evaluated in the REF by modifying the
assessment process to include not just the academic’s own research but that of other academics.
The funding resulting from this impact might then be split rather as authors’ royalties are split,
perhaps using the services of the Authors Licensing and Collecting Society.

10. Conclusions and further research

Achieving wider impact from academic research is a global policy issue (Dowling Review of
Business-University Collaborations, 2015; LERU—League of European Research Universities, 2012;
Watson, Hollister, Stroud, & Babcock, 2011; Wilson, 2012; Witty, 2013). It raises questions about
the role of an academic and where they invest their effort. Evaluating the overall impact of
research is challenging because impact comes in many forms (Martin, 2011). However, the system
for assessment must be workable and equitable and therefore rules-based. A further challenge is
that generally the number of academic researchers willing or able to demonstrate impact is small
(Watermeyer, 2014b), while there has been little engagement of research evaluation specialists

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with the academic community (Donovan, 2011). For non-science subjects, a problem has been a
focus in the past on commercialization of ideas and technology transfer, ignoring other academic
interactions with external organisations (Hughes & Kitson, 2012).

This article tries to explain the complexity of impact across the range of academic research
(Bornmann, 2013). But how far do the impact case studies in the REF tell story of academic impact
and how far are they about game playing and the way the story is told (Watermeyer, 2014a)? This
is important because the behaviour and culture of academics will be driven by the REF and other
such exercises. As long as publication, particularly in certain types of journals, is still prioritized
over engagement with practice, it is a publication in these journals that will still be the main focus
of academics’ attention. So, the problem identified by Lilien (2016), in this case of lack of B2B
marketing research because of the domination of the quantitative/positivist model, will persist.

In our view, in an applied field such as marketing, far greater attention to engaging in a
sustained and ideally integrated way with the field of practice is required. This can be done in
many ways, for example through industry associations, management and broad interest publica-
tions and through consulting companies and associated publications. However this activity is not
recognised unless it is within the model of application suggested by the impact case study
approach of the REF (Snowden, 2003). It is not clear to the authors why this rather narrow
interpretation was adopted. This opens the possibility that there are two distinct and completely
opposite reasons for the low number of marketing impact case studies in the 2014 REF. One is that
marketing academic are poorly engaged with practice. The other is that their mode of engagement
is very different from that envisaged by the REF, as shown in the examples given in this article,
implying that the REF model is inadequate for marketing and possibly for other management
disciplines. The latter is a topic that clearly needs more research.

The over-reliance on academic publication as a metric is said to have skewed the work of
academics in management fields away from practice (Adler & Harzing, 2009). The inclusion of
impact cases in REF 2014a was designed to redress this by requiring demonstration of wider
impact, but our evidence suggests this is not enough. For an applied subject like marketing, we
would like to see a requirement to submit fewer academic publications, but more evidence from
individual academics and teams of academics on how they have engaged outside of academia to
disseminate their research findings and on how this activity has had an impact. This might also
help marketing teach their students using more applied material, perhaps enhancing the employ-
ability of marketing students (a topic worthy of separate research) and greater satisfaction of
employers with the output of universities.

It is clearly understood by the authors that the assessment of impact by the REF is at its earliest
stages, and that those involved—both researchers and assessors—are on a steep learning curve. The
REF is more than a database of research achievements, capabilities and impact. It is in its fullest
sense a B2B or inter-organisational information platform (Stone et al., 2017a), an important basis for
the government as customer on behalf of the wider community—industry, citizens, students etc.—to
determine who should be funded and by how much. It has much in common with other platforms
used in the public sector to validate suppliers, such as the university’s own JISC (https://www.jisc.ac.
uk/), founded in 1993 as the Joint Information Systems Committee, which focuses on digital solutions
for education and research, and Scape (www.scapegroup.co.uk/), which focuses on procurement for
the built environment and is used by local authorities and other public-sector purchasers. Research
into both these and comparison with the REF forms part of the (so far unpublished) work of one of
your authors. The REF was founded as the Research Assessment Exercise in 1986 and Scape was
founded in 2006. The REF seems to be a little behind the curve of the other two frameworks, at least
as far as our research indicates, in that there is still some debate about what information should be
included in the platform. The difference between REF and these two other platforms is that they start
with a different question, how to improve value for money for the client, rather than the question the
REF starts with, which is how to allocate funds between suppliers by evaluating the quality of their

Page 14 of 18
Hughes et al., Cogent Business & Management (2018), 5: 1516108
https://doi.org/10.1080/23311975.2018.1516108
research. In the authors’ view, the REF for the years beyond 2021 should begin with the former
question, and therefore have much stronger participation of the clients, as do the other two frame-
works. This of course raises the question as to who the final clients are and indeed what value they
are seeking through which outcomes—the subject for more research.
Finally, there are also significant implications for the publishers of marketing journals, especially
that they would do well to consider broadening the type of article published to include one or more
practical articles in each issue, and finding new ways of disseminating business-friendly versions of
the more academic articles.
Funding
The authors received no direct funding for this research.
Author details
Tim Hughes1
E-mail: Tim.Hughes@uwe.ac.uk
Merlin Stone2
E-mail: merlin.stone@stmarys.ac.uk
Eleni Aravopoulou2
E-mail: eleni.aravopoulou@stmarys.ac.uk
ORCID ID: http://orcid.org/0000-0002-8780-919X
Len Tiu Wright3
E-mail: lentiu11@outlook.com
Liz Machtynger4
E-mail: liz@mythumb.com
1
Applied Marketing, Bristol Business School, University of
the West of England, Bristol.
2
School of Management & Social Sciences, St Mary’s
University, Twickenham, UK.
3
De Montfort University, Leicester.
4
Customer Essential Ltd, East Horsley, UK.
Citation information
Cite this article as: Academic research into marketing:
Many publications, but little impact?, Tim Hughes, Merlin
Stone, Eleni Aravopoulou, Len Tiu Wright & Liz
Machtynger, Cogent Business & Management (2018), 5:
1516108.
Group research activities
This article is produced by a group of researchers who
have a strong interest in ensuring the practical application
of academic research into marketing. The disciplines
which are the foundation of much of their published
research include qualitative marketing research, market-
ing communications, business-to-business marketing,
customer relationship management, marketing informa-
tion management and digital marketing. They have sig-
nificant track records of engagement and employment in
industry and of generating thought leadership, whether in
disciplines or different sectors of industry. They are pas-
sionate about the student experience and about the
employability of their students, about engaging industry
in academia and vice versa. Their involvement in industry
in not purely strategic, like that of many marketing aca-
demics, but also deeply operational, and so they stand or
fall by the relevance of the work that they do, not just in
producing theories and ideas, but also in helping industry
deal with its practical problems and opportunities.
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 Journal of Marketing Management

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Empowerment in social marketing: systematic

review and critical reflection

Tanja Kamin, Krzysztof Kubacki & Sara Atanasova

To cite this article: Tanja Kamin, Krzysztof Kubacki & Sara Atanasova (2022) Empowerment in
social marketing: systematic review and critical reflection, Journal of Marketing Management,
38:11-12, 1104-1136, DOI: 10.1080/0267257X.2022.2078864

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JOURNAL OF MARKETING MANAGEMENT
2022, VOL. 38, NOS. 11–12, 1104–1136
https://doi.org/10.1080/0267257X.2022.2078864

Empowerment in social marketing: systematic review and

critical reflection
a b c
Tanja Kamin , Krzysztof Kubacki and Sara Atanasova
a
Social psychology research centre, Faculty of Social Sciences, University of Ljubljana, Ljubljana, Slovenia;
b
Marketing, Auckland University of Technology, Auckland, New Zealand; cCentre for Methodology and
Informatics, Faculty of Social Sciences, University of Ljubljana, Ljubljana, Slovenia

ABSTRACT ARTICLE HISTORY

This paper analyses how social marketing scholarship engages with Received 15 October 2021
the concept of empowerment and reflects critically on its usage and Accepted 6 April 2022
conceptualisations. Based on a systematic literature review, the KEYWORDS
paper discusses the importance of empowerment theory for Social marketing;
increasing the emancipatory potential of social marketing in pursuit empowerment; systematic
of community betterment and social change. The paper offers review; critical social
a definition of empowerment for the social marketing discipline, marketing; social change
constructs a conceptual framework of empowerment for social
marketers, and clarifies the main aspects and principles of empow­
erment theory relevant for the development of critical social mar­
keting, thereby providing sources for future research, continuing
critical reflections and critique.

Introduction
Critical social marketing scholarship has thus far been primarily concerned with issues
external to the discipline of social marketing and associated with negative impacts of
commercial marketing on individuals and society (see, for example, the first definition of
critical social marketing provided in Gordon, 2011). However, that approach has recently
been widened, encouraging social marketers not only to engage critically with activities of
the commercial sector, but also to direct focus inwards, into the social marketing dis­
cipline and practice itself. As Gordon (2019, p. 86) stated, critical social marketing ‘exam­
ines the impact of commercial marketing and business on society and/or critically
analyses social marketing theories, concepts, discourses and practice, to generate critique,
conflict and change that facilitates social good.’ Hence, we consider critical social market­
ing as a sub-discipline of social marketing.
In this paper, we engage with the second part of the definition of critical social
marketing and contribute to analysis and evaluation of the ways in which social marketing
practitioners and scholars study and apply concepts and theories in pursuit of change that
facilitates social good. Critical analysis and reflexive engagement with commonly used
and increasingly studied concepts is important to provide a shared intellectual foundation
for social marketing, which is a relatively young discipline (Andreasen, 2003; Gordon &

CONTACT Tanja Kamin tanja.kamin@fdv.uni-lj.si Social psychology research centre, Faculty of Social Sciences,
University of Ljubljana, Ljubljana, Slovenia
© 2022 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License
(http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any med­
ium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way.
 JOURNAL OF MARKETING MANAGEMENT 1105

Gurrieri, 2014; Peattie & Peattie, 2003), as well as being practical and problem-oriented.
Young and rapidly evolving disciplines are often criticised for relying on concepts bor­
rowed from more theory-based fields without sufficient consideration of the rich and
complex traditions behind those concepts (Rissel, 1994), which may lead to confusion and
inconsistencies within the theoretical base of social marketing (Peattie & Peattie, 2003).
The concept of empowerment is one popular and increasingly used concept that
warrants more rigorous and critical reflection. For example, in the marketing discipline,
empowerment may be employed to capture the degree to which consumer sovereignty
can be carried out and measured with concepts such as self-efficacy, involvement and
autonomy in choice making (Denegri-Knott, 2019). Empowerment is also an increasingly
popular concept in contemporary behaviour and social change discourse. One will
struggle to find social change programmes or policy proposals that do not seek to
empower somebody (Chaudhuri, 2016; Kriznik et al., 2018), and social marketing is firmly
following that trend. For example, in 2018, two leading social marketing events included
the concept of empowerment in their titles (namely, the Change 2018 conference in
Australia and the 4th European Social Marketing Conference), contributing to the bur­
geoning popularity of the empowerment discourse among social marketing scholars and
practitioners. However, as previous analysis of the use of the concept of empowerment
among social marketing scholars and practitioners has indicated, empowerment-related
terminology remains undefined, and hence is frequently used as a vague goal in itself
(Kamin, 2019).
Empowerment theory provides a useful framework for social marketers to contemplate
and demonstrate the effects of social marketing programmes on behaviour and social
change. Yet, a lack of systematic research and ad hoc conceptualisations of empower­
ment in the social marketing literature, which often result in the use of the concept
without an understanding of its (complex) meaning, do not allow the concept to fulfil its
potential. On the contrary, the concept of empowerment often functions in social market­
ing as an empty signifier that allegedly conveys something positive, a socially desirable
value that a programme (or the discipline) wishes to be identified with. A recent study
(Szablewska & Kubacki, 2019) highlighted the need for critical reflections and systematic
re-examination of popular concepts, in this case ‘the social good,’ to provide a rigorous
foundation for their use in social marketing. The present paper adds to this stream of
research and contributes critical reflection on the concept and theory of empowerment
by exploring the ways in which they are embedded in the social marketing scholarly
literature. Since empowerment is a concept that is inherently concerned with power
issues with regard to social problems, their (re)production and elimination, it provides
a useful lens that needs to be explicitly conceptualised and critically reflected on in the
field of critical social marketing to encourage social marketers to make a meaningful
contribution to the emancipatory social justice agenda.
The multilevel, complex and polysemic nature of empowerment provides social mar­
keters with a challenge to explore it beyond its superficial use. Although empowerment is
often an underlying goal of behaviour change programmes, it is rarely included in
behaviour change research models, and it is even more uncommon for empowerment
to be measured and tested empirically (Kamin, 2019). This raises the question: How can
we evaluate the contribution of particular social marketing programmes to empower­
ment outcomes? There is a paucity of research with a focus on how empowerment is
1106 T. KAMIN ET AL.

experienced per se (Atanasova et al., 2017; Suárez Vázquez et al., 2017) and even less
scholarly work on how social marketing programmes can affect the empowerment
experience of the people who are their target audience.
The main objectives that we pursue in this paper are as follows. Firstly, we seek to identify,
synthesise and analyse how social marketing scholarship engages with the concept of
empowerment. To achieve this objective, we conducted a systematic review in which studies
that refer to both social marketing and empowerment were identified. Secondly, we seek to
critically reflect on, evaluate and compare the definitions and conceptualisations of empow­
erment identified in our systematic review with the conceptualisation in empowerment
theory. With these two objectives, the paper aims to foreground the potential of the concept
and theory of empowerment to leverage the emancipatory function of social marketing, and
to generate practical and scientific knowledge relevant for challenging various forms of
human oppression and creating conditions in which people can thrive. We also propose
a working definition of empowerment for the social marketing discipline, construct
a conceptual framework of empowerment for social marketers, and clarify the main aspects
and principles of empowerment theory relevant for the development of critical social
marketing; these contributions will serve as sources for future research and reflections.
We start by defining the concept and theory of empowerment, presenting its origins,
levels and dimensions, and proposing a working definition of empowerment for the social
marketing discipline. Then, we describe the methodology and sample of our systematic
literature review. After presenting the results of our analysis, we discuss and critically
evaluate existing research on social marketing and empowerment. In conclusion we
provide a conceptual framework of empowerment for social marketers, together with
guidance and implications for future critical social marketing research.

The concept of empowerment: origins and conceptualisation

Across the diverse and multidisciplinary intellectual traditions of the behaviour change
discipline, empowerment theory has been most frequently elaborated on, studied and
measured in community psychology (Rappaport, 1981; Zimmerman, 2000). Although
popular as a general concept, empowerment has proven to be rather intangible as
a research construct (Koren et al., 1992). The elusiveness of the construct of empower­
ment is particularly problematic in light of an increasing number of programmes and
policy documents that feature empowerment as a major goal (Chaudhuri, 2016; Kriznik
et al., 2018), yet fail to define and operationalise it. There is emerging evidence that
empowerment is being used to refer to increasing people’s responsibilities for their
behaviour change (Feste & Anderson, 1995; Zharekhina & Kubacki, 2015). When empow­
erment is used to emphasise people’s will to handle their problems, it becomes
a convenient neoliberal excuse for holding individuals responsible for their life circum­
stances (Zimmerman, 2000) and, in turn, for supporting reproduction of the status quo. An
approach that light-heartedly emphasises individual responsibility remains in contradic­
tion with the principles of empowerment theory and, for that matter, with the normative
core of social marketing, which is obliged to assess individual behaviours in their social,
cultural, political, and structural contexts and develop effective solutions for social (beha­
vioural) problems at the upstream, midstream and/or downstream levels (French &
Gordon, 2019).
 JOURNAL OF MARKETING MANAGEMENT 1107

The underlying assumption of empowerment theory is well attuned with more systemic
thinking among social marketing scholars (e.g. Domegan et al., 2016; Kubacki et al., 2020)
who have argued that an individual’s well-being should always be considered in relation to
the larger socio-political context (Rappaport, 1981; Zimmerman, 2000) and the resources
that people have at their disposal (Kamin & Anker, 2014). It takes into account that people’s
behaviours are related to communal or societal power relations, struggles for gaining
power and efforts to influence or exert control. Thus, empowerment theory assumes that
not all people have the same opportunities, abilities or interests to behave in a particular,
recommended way, regardless of how socially desirable that behaviour may be.
Empowerment is a multilevel and open-ended construct (Zimmerman, 1995) and its
definition is hardly uncontroversial, since it depends on particular circumstances and
particular groups of people (Rappaport, 1987; Rissel, 1994); it can be observed at the
individual, collective or organisational levels (Rissel, 1994; Zimmerman, 1995), as an out­
come or as a process (Perkins & Zimmerman, 1995; Rissel, 1994); it can be experienced by
people in different ways, influenced by high levels of irrationality and emotion (Atanasova
et al., 2017; Kamin, 2006; Suárez Vázquez et al., 2017); it can never be granted from outside
by someone else (Rappaport, 1987); and, last but not least, it should not be assumed to
lead automatically to desired behaviour and social change, since it can also be dysfunc­
tional (Petrič et al., 2017a, 2017b).

Origins and emergence of the concept of empowerment

The core of the concept of empowerment derives from the French word pouair, which in
the thirteenth century meant power, being able to and powerful and was associated with
ownership and possession (Hermann, 2003). The verb to empower is of later origin, from
the seventeenth century; it meant ‘to impart or bestow power to an end or for a purpose;
to enable, permit’ and was used primarily in legal contexts (Lincoln et al., 2002, p. 272).
The contemporary use of the concept of empowerment is in most cases related to the
proliferation of the term that emerged during social movements in the 1960s and 1970s
(Carstensen & Winker, 2007; Fortunati, 2009). Its use in the social sciences is embedded in
the legacy of the social and political activism and academic civil rights discussions of the
1960s, and it was increasingly used during the women’s movements of the 1970s
(Fortunati, 2009; Stromquist, 1995).
The social movements at that time emphasised the importance of citizen participation
in decision-making in various fields of human life. These contexts presented the frame­
work of an approach to empowerment as increasing social power, concerned with the
participation processes of people in marginalised positions in which they developed their
own sources of power that helped them to articulate their interests, participate in political
processes, and gain social power in order to change their disadvantaged position
(Carstensen & Winker, 2007). This idea was most clearly captured in Paulo Freire’s 1970
book Pedagogy of the Oppressed. Freire proposed a participatory education process in
which individuals are actors who are able to understand, be aware of and address their
personal and social problems, and identify possible solutions in order to change them­
selves and the oppressive circumstances they are living in (Wallerstein & Bernstein, 1994).
1108 T. KAMIN ET AL.

Freire recognised the importance of empowerment as a process of recognition or con­

sciousness that can lead, through improving individual lives, to wider social change (Shor
& Freire, 1987).
Freire’s ideas gradually spilled over from the discipline of education to the disciplines
of black studies, social work, political science, health, organisational studies, and women’s
studies (Fortunati, 2014). Similarly, in the early 1980s, Rappaport adopted and introduced
the concept of empowerment in the American discipline of community psychology,
which is today considered a founding discipline of the concept of psychological empow­
erment. He argued that the practices of social and community institutions had become
paradoxical, meaning that ‘the institutions and organisations developed by well-meaning
scientists and professionals – and often “solutions”—create more problems than they
solve’ (Rappaport, 1981, p. 8). He also advocated using community psychology more as
a social movement than a profession of prevention, urging that the concept of empower­
ment should become a central ideology that aims to enhance the possibilities for people
to control their own lives:
We will, should we take empowerment seriously, no longer be able to see people as simply
children in need or as only citizens with rights, but rather as full human beings who have both
rights and needs. We will confront the paradox that even the people most incompetent, in
need, and apparently unable to function, require, just as you and I do, more rather than less
control over their own lives; and that fostering more control does not necessarily mean
ignoring them. Empowerment presses a different set of metaphors upon us. It is a way of
thinking that lends itself to a clearer sense of the divergent nature of social problems.
(Rappaport, 1981, p. 15)

In the 1990s, the concept of empowerment increasingly became a direct response to calls
for paradigm shifts in many areas of social life and human behaviour. The emphasis was
on the need to rethink the core issues at various levels of human society, such as health,
well-being, social inclusion, education, and employment, to name just a few (Prilleltensky,
2005). Thus, the concept of empowerment gradually became central to the content of
various social reforms, especially in Western countries, emphasising individual (citizen)
and community participation, involvement and engagement in co-creation processes,
and co-design and delivery of human services. As the term empowerment has gained in
popularity, often being used as a buzzword, fears have been expressed that the concept
may legitimise ‘the offloading of responsibilities to vulnerable and dependent citizens in
the name of self-determination’ (Rushing, 2016). This trend is in part due to the dispersion
of the concept of empowerment, which has appeared in various forms and with different
meanings across theories and disciplines. Thus, it is crucial to focus next on the con­
ceptualisation of empowerment.

Conceptualisation of empowerment
Empowerment is a cross-disciplinary concept that has been established and used across
various scientific disciplines (Hur, 2006). The current dispersion of the concept, whereby it
appears in a range of forms and with different meanings across disciplines, has made it
impossible to provide a single overarching definition. This polysemic nature shapes one of
empowerment’s main characteristics, namely its contextual dependence (Zimmerman,
1995; Zimmerman et al., 1992). This means that (1) empowerment differs across
 JOURNAL OF MARKETING MANAGEMENT 1109

populations, due to the characteristics of individuals, whether related to socio-

demographic or cultural characteristics, significantly influencing the meaning and process
of empowerment; (2) empowerment varies across settings; and (3) empowerment is time-
dependent, increasing or decreasing over time, and cannot be observed as a static
condition, (Zimmerman, 1995). Further, if the passage of time brings changes in the
characteristics of settings and individuals, the indicators of empowerment are likely to
change as well. As such, empowerment is a concept that is contextually embedded, and
different levels of empowerment are interdependently connected. Moreover, empower­
ment includes features of both process and outcome (Zimmerman, 1995), which will be
discussed in the next section.

Empowerment as process and outcome

In its broadest sense, empowerment includes processes and outcomes that enhance
possibilities for people to control their own lives, processes in which power relations
between those who design change and those who depend on it are challenged, and
processes in which people are able to be seen as ‘full human beings who have both rights
and needs’ (Rappaport, 1981, p. 15).
The empowerment process is defined as a participatory-developmental process
through which individuals, organisations and communities gain greater control, self-
efficacy, access to and control over resources, social justice, personal, interpersonal or
political power, and awareness of the socio-political environment to address issues of
powerlessness and to influence decisions that affect their lives (Perkins & Zimmerman,
1995; Zimmerman, 1995). The empowerment process is always transactional, as it consists
of interactions between individuals, groups, organisations or communities (Gibson, 1991).
It concerns a sequence of stages that have been defined differently by different scholars
(Carr, 2003; Gutierrez, 1994; Hur, 2006; Kieffer, 1984). For instance, Hur (2006) charac­
terised the empowerment process in five stages. The first stage is the existence of
powerlessness and alienation, which proceeds into a stage of conscientising in which
individuals learn and gain awareness about their disadvantaged position and develop
a willingness to change their limited power and position in a specific setting. Next,
individuals enter the stage of mobilisation in which, by interacting with other people,
they collectively engage in and organise a social action or movement. The fourth stage is
the maximisation stage, through which individuals share their power and build on their
desires, competences and abilities to potentially bring about change. In the final stage of
empowerment, on Hur’s account, individuals overcome social oppression, achieve social
change and create a new social order.
Although Hur’s stages of empowerment are presented in a linear fashion, empow­
erment has also been described as a cyclical process and characterised as a lifelong
endeavour (Zimmerman, 1995). The idea behind the empowerment process generally
relates to the transformation of the distribution of power relations at the level of
interpersonal relationships, both institutional and social (Beteille, 1999; Stromquist,
1995). The final stage of the empowerment process is characterised by social change
and actual transformation of individuals’ life domains. However, empowerment does
not necessarily result in positive and ‘real’ changes; or, as Lincoln et al. (2002)
emphasise, empowerment is a process that never ends, as it needs constant
confirmation.
1110 T. KAMIN ET AL.

A process is considered empowering if it results in empowered outcomes. Generally,

empowered outcomes are specific consequences or effects of empowerment processes
and are used for the empirical study of the processes that might lead to empowered
individuals, groups, organisations or communities (Zimmerman, 1995, 2000). In (empiri­
cal) studies of empowerment, empowerment processes are usually measured as factors
that have different effects on empowerment outcomes. When studying these outcomes, it
is important to focus on the disclosure of the accessibility and allocation of valued
resources in the contexts of specific individual, organisational or community issues
(Laverack, 2006; Zimmerman, 2000). As acknowledged in social marketing, for social
settings to be beneficial for individuals, their social structure must provide access to
and distribution of different kinds of resources that support social processes capable of
converting those resources into valuable benefits for individuals (Lee & Kotler, 2015).
Identifying which resources are needed for individuals, groups and communities to
become empowered is of great importance because it can also clarify the differences
between individuals and groups and how they can achieve empowering outcomes.
Empowerment outcomes take different forms depending on the level of observation
(Zimmerman, 2000). Empowerment outcomes at the individual level might include perceived
control, critical awareness or proactive behaviours. At the organisational level, empowerment
outcomes might pertain to effective resource acquisition, policy leverage or established
organisational networks. Empowerment outcomes at the community level might include
the existence of organisational coalitions, pluralistic leadership or citizens’ participatory skills
(Zimmerman, 2000). Because empowerment outcomes often present the main operationa­
lisation of empowerment, they tend to be described in conceptualisations of empowerment
through empowerment dimensions. This means that in order to study empowerment out­
comes comprehensively, one must examine the multidimensionality of empowerment.

Levels and dimensions of empowerment

Empowerment is a concept that is present at multiple levels and, according to empower­
ment theory (Rappaport, 1987; Zimmerman & Rappaport, 1988; Zimmerman, 1995, 2000),
each particular level consists of multiple dimensions. This complexity introduces ambi­
guity and is one of the major reasons why empowerment lacks a comprehensive and
overarching conceptualisation. Community psychology is one of the few disciplines that
have focused extensively on the theorisation of empowerment and can provide
a comprehensible framework for understanding the concept’s multidimensionality and
its relevance to social marketing. Accordingly, empowerment has been described at three
levels:

(1) Individual-level empowerment refers to individuals’ experiences of gaining control,

self-efficacy and competence, interacting with others in collective engagement and
influencing a given setting and/or daily life domain (Perkins & Zimmerman, 1995;
Zimmerman, 1995). Individual-level empowerment is often referred to as psycho­
logical empowerment, which is one of the best established concepts in empower­
ment theory (Rappaport, 1987).
 JOURNAL OF MARKETING MANAGEMENT 1111

(2) Organisational-level empowerment consists of organisational efforts that generate

empowerment among the organisation’s members, as well as organisational coop­
eration, and efforts and influence to enact various transformations at the commu­
nity level (Peterson & Zimmerman, 2004; Wilke & Speer, 2011).
(3) Community-level empowerment, that is, community empowerment, refers to con­
nections among community members and organisations that may increase collec­
tive engagement directed towards improving community control and thereby
influence the social justice and power relations in the wider society (Wallerstein,
1992).

In the context of social marketing programmes focused on individuals (i.e. downstream)

and aiming to initiate behaviour change, the most useful level at which to observe
empowerment processes and outcomes is the individual level, which is usually described
as psychological empowerment. Psychological empowerment, according to Zimmerman
(1995, p. 588), includes ‘a sense of and motivation to control; decision-making and
problem-solving skills and critical awareness of one’s socio-political environment; and
participatory behaviours’. Psychological empowerment consists of three dimensions,
namely intrapersonal, interactional and behavioural. These dimensions are in interaction,
but they are not organised hierarchically. They may appear in individuals to different
degrees and may fluctuate over time (Zimmerman, 1995). Each of the dimensions of
psychological empowerment is a construct and thus includes its own sub-dimensions that
are often included separately in various behaviour change models or discussed as barriers
or incentives to specific behaviour change (see Table 1).
Intrapersonal empowerment, often described as personal empowerment, a sense of
empowerment or self-empowerment, refers to individuals’ self-perceptions of their abil­
ities to exert influence in different life domains and to conduct influence-related activities
and tasks that affect their lives and living conditions. More specifically (see Table 1), the
intrapersonal dimension of psychological empowerment includes domain-specific per­
ceived control, self-efficacy, motivation control, and perceived competence (Zimmerman,
1995; Zimmerman et al., 1992). These beliefs are important for individuals to engage in
the proactive behaviours that are needed to achieve specific goals related to changes in
different life spheres. Intrapersonal empowerment as self-perception and beliefs about
one’s ability to exert influence and change the situation that one is living in can be related
to the power within and the creation of dispositions that are needed for actual action
directed towards social change (Table 1). More specifically, power within refers to personal

Table 1. Psychological dimensions of empowerment and their relation to the notion of power.
Intrapersonal Interactional Behavioural
Psychological empowerment dimension empowerment empowerment empowerment
Sub-dimension Domain-specific Critical awareness Community
perceived control involvement
Domain-specific Understanding Organisational
self-efficacy causal agents participation
Motivation control Skill development Coping
Perceived Skill transfer across behaviours
competence life domains
Type of power that is achieved and/or distributed with Power within Power with Power to and
specific dimension of empowerment power from
1112 T. KAMIN ET AL.

power and individuals’ awareness of the capacities that motivate their actions (Mosedale,
2005) and is thus essential for subsequent stages of the empowerment process. Following
the stages of the empowerment process as defined by Hur (2006), the development of
power within presents one of the crucial elements for individuals to achieve conscientising,
that is, to gain awareness of their limited power and to realise that they have the ability
and motivation to potentially change individual and/or social disturbances.
In contrast, interactional empowerment (or collective empowerment) has been con­
ceptualised as critical understanding and awareness of one’s socio-political environment
and thus the ability to evaluate the circumstances or systemic dynamics in one’s environ­
ment (Speer, 2000, 2008; Wilke & Speer, 2011). In order for individuals to exert control over
and changes to their environment, they must (see Table 1): develop critical awareness,
learning about their options in a given setting; gain knowledge of causal agents in the
environment, such as influential people (e.g. political and community leaders), objects
(e.g. policies and legislations) or events (e.g. petitions, demonstrations) that might
enhance or inhibit their efforts to exert control in the socio-political environment; develop
problem-solving and decision-making skills that they can transfer across life domains; and
gain knowledge about the resources needed to achieve goals (Peterson et al., 2005;
Zimmerman, 1995). Interactional empowerment thus includes both psychological capa­
cities of understanding and knowledge about one’s environment; however, it is seen as
a preparation for actual participation and is associated indirectly with the behaviours that
are needed to exert influence and achieve outcomes (Zimmerman, 1995). As such,
interactional empowerment can be related to the concept of power with. It encompasses
the collectivist construct of power, which more specifically refers to the ‘power that is
experienced through relationships with others, as well as an understanding of political
functioning, and the role of conflict in the process of change’ (Wilke & Speer, 2011, p. 973).
Behavioural empowerment refers to the specific actions that are needed to exercise
influence and to directly affect outcomes in one’s environment. It has often been asso­
ciated with participation in collective action, involvement in organisations, and other
participatory behaviours that are focused on community and social change (Zimmerman,
1995, 2000). The behavioural dimension of empowerment as actual behaviours and
actions directed towards exercising influence and forming collective action that resists
or draws attention to limitations of current social conditions can be related to the notions
of power to and power from (see Table 1). As Minkler and Wallerstein (2005) emphasised,
empowerment comprises two elements: resisting power structures with the underlying
concept of power from that includes the resistance and challenge of ‘power over’; and the
ability to build efforts to expand power relations to bring about desired outcomes, which
more specifically relates to the notion of power to.
For this paper’s purpose of critical evaluation of the concept of empowerment in social
marketing studies, we propose the following definition in the social marketing context:
Empowerment refers to participatory-developmental processes that can inform the
development and implementation of activities aimed at initiating behavioural change in
individuals, communities or organisations to achieve empowering outcomes, which can
lead to (individual, organisational, communal or social) change. Social marketing pro­
grammes that aim at participants’ empowerment need to (1) address their position and
issues of powerlessness and enable them to become aware of their own disadvantaged
position; (2) encourage participants to develop a need to address their disadvantages; and
 JOURNAL OF MARKETING MANAGEMENT 1113

(3) facilitate the development of competences, skills and ability to achieve greater control,
self-efficacy, access to and control over resources, social justice, personal, interpersonal or
political power, and awareness of the socio-political environment to influence decisions
that affect their lives.

Methodology
Given the growing importance of the concept of empowerment in social marketing
practice and the diversity of intellectual traditions that shape its conceptualisations across
a wide range of social science disciplines, it is timely for critical social marketing scholars
to engage with this concept and unpack the way it shapes social marketing discourses.
While the relevant conversation remains scant in the social marketing literature, we
propose that a systematic social marketing literature review including references to
empowerment will provide more rigorous synthesis of an emergent area (Becheikh
et al., 2006) and a foundation for further analysis.

Literature search strategy and inclusion and exclusion criteria

Our systematic literature review followed the review procedures described in the
PRISMA-P Protocol (Shamseer et al., 2015; see Figure 1 for a flowchart of the process).
First, we conducted a search of peer-reviewed records published in English up to
February 2020. Ten databases, including business, social sciences, health, public health,
and environmental sciences literature (see Table 2), were searched, focusing on titles,
abstracts and keywords, and using a search term—‘social marketing’ AND empower*—

Records retrieved from databases

N=264

Remove duplicates:
n=110

Unique records
N=154

Application of the exclusion criteria:

. Not in English (n=3)
. Not journal article (n=32)
. Reviews (n=3)
. Not social marketing (52)
. Not empowerment (n=9)

Final records
N=55

Figure 1. Literature search process.

1114 T. KAMIN ET AL.

Table 2. Databases used and number of articles retrieved in initial

search.
Database Number of articles retrieved
EBSCO 11
Emerald 1
ProQuest 25
Ovid 4
Medline 34
Web of Science 41
Science Direct 5
Scopus 127
Informit Business, Health & Social Sciences 12
JSTOR 4

to ensure broad and comprehensive coverage across the main journals and disciplines
that typically publish social marketing studies. The combined searches yielded 264
records, which were imported into Endnote; the results for each database are presented
in Table 2.
In the next step, one of the researchers removed 110 duplicate records, leaving the
final sample of 154 unique records. Then, on the basis of several earlier social marketing
systematic literature reviews (e.g. Kubacki & Szablewska, 2019), we applied five exclusion
criteria to remove ineligible records. Specifically, abstracts, titles and keywords were
screened by two of the researchers to remove records that were not in English, records
that were not peer-reviewed journal articles (e.g. newspaper articles and conference
papers), literature reviews, and records that did not include references to both social
marketing and empowerment.

Study selection and data analysis

As a result of this screening process, a final total of 55 records was identified (Figure 1),
and the full texts were either downloaded into Endnote or acquired via inter-library loans.
Each of the records included for further analysis referred explicitly to social marketing as
a concept consistent with the consensus definition of social marketing (AASM, ISMA, &
ESMA, 2013; excluding, for example, a handful of studies where social marketing was used
to refer to social media marketing), and to empowerment in connection with social
marketing. Figure 1 presents the stages and results of the literature search process.
Two of the researchers reviewed the full texts, abstracts, keywords and titles of the final
55 records, extracting all text referring to *empower* (including, for example, ‘empower’,
‘empowerment’, ‘empowering’ and ‘disempower[−ing]’) into an Excel spreadsheet that
was developed to facilitate data analysis (Nguyen et al., 2018). Two sentences before and
after *empower* were extracted to maintain the meaning of the sentence that included
the reference to *empower*. In addition, all of the texts were read fully to understand the
context of the studies, which enabled more accurate coding, particularly of the texts that
engaged with the concept of empowerment more superficially. Following the approach
reported in Purchase and Volery (2020), thematic codes were developed to analyse the
records. Each record was coded in an Excel spreadsheet, identifying its specific topic, the
population in focus, level of analysis, characterisation of empowerment, definition of
empowerment, and factors considered.
 JOURNAL OF MARKETING MANAGEMENT 1115

The results of the analysis were structured in a narrative way and by using metasum­
mary techniques, including grouping, formatting and tabulation of descriptive findings
(Sandelowski et al., 2007). Results were reported according to the PRISMA 2020 guidelines
(Page et al., 2021).

Results
In this section, we set out the results of the studies included in the systematic review,
structured in two sub-sections: (1) the main characteristics of all the studies included, and
(2) analysis of the studies that included definition and conceptualisation of
empowerment.

Characteristics of the studies

Table 3 summarises the key characteristics of the studies included in the review.

Year of publication
The final 55 records provide strong evidence that the use of the concept of empowerment
in social marketing studies is on the rise. The earliest relevant study identified appeared in
1987, yet only six further studies had been published by the end of the twentieth century.
While the interest in empowerment started to gather momentum in the first decade of
the twenty-first century, it was the second decade that witnessed exponential growth,
with 60% of the sample (n = 33) published between 2011 and 2019.

Discipline and journal of publication

The SCImago Journal and Country Rank was next used to classify the journals where the
55 records were published into subject groups. The largest subject group of journals was
medicine, with 29 studies divided across sub-groups such as public health (n = 16),
general medicine (n = 8), health policy (n = 3), and psychology and physical education
(n = 1). Ten studies appeared in social sciences journals across fields such as cultural
studies, communications studies, development, and health. Further, ten studies were
published in marketing journals, including six in general marketing and only four in social
marketing. Two more studies appeared in broad business and management journals, and
the remaining studies were in computer science, engineering, environmental sciences,
and information/learning sciences. Interestingly, only three journals published more than
one study from our sample: Journal of Social Marketing (n = 3), Canadian Journal of Public
Health (n = 2) and Family and Community Health (n = 2).

Citation impact
The total number of citations to all 55 studies according to Google Scholar
(6 October 2021) is 1,813, showing a significant impact of the overall sample on the
wider scholarly discussion. However, the top ten most cited studies, less than one-fifth of
the overall sample, attracted two-thirds of all citations (1,211 citations), indicating that the
majority of impact is concentrated within a small sub-sample of studies, with only three
studies attracting more than 100 citations (Ernster et al., 2000; Gadema & Oglethorpe,
2011; Matsudo et al., 2002).
1116 T. KAMIN ET AL.

Table 3. Studies included in the review and their main characteristics.

Authorship Population in Definition of
Reference Journal Citations origin Research topic focus empowerment
Agarwal and Research in 9 India Health (healthcare Women No
Sarasua Healthcare financing)
(2002) Financial
Management
Baffour et al. Family and 30 USA Health Women (pregnant No
(2006) Community women and
Health mothers of
small children)
Baskerville BMC Public Health 9 Canada, Health (smoking) LGBTQ + YYA No
et al. (2018) USA
Bech-Larsen Catalan Journal of 0 Denmark, Health (healthy Health promoters No
et al. (2013) Communication Belgium, eating)
and Cultural Poland
Studies
Belladi et al. International 0 India Education about Community (rural No
(2019) Journal of important community in
Innovative issues (via local India)
Technology and radio)
Exploring
Engineering
Colquitt et al. Strategies: 0 USA Health (physical Physical education No
(2014) A Journal for activity) teachers
Physical and
Sport Educators
Daellenbach Journal of Social 6 New Community Community No
et al. (2016) Marketing Zealand resilience to leaders
emergencies
and disasters
Damari and Social Work in 8 Iran Health (public Public health No
Chimeh Public Health health workers activists
(2017) skills)
Duane et al. BMJ Open 41 Ireland Health (antibiotic GPs and patients No
(2016) resistance) with urinary
tract infection
(UTI)
experience
Erben et al. Health Promotion 44 Australia Health Health promoters Yes
(1999) Journal of
Australia
Ernster et al. Bulletin of The 176 USA Health (tobacco Women No
(2000) World Health control)
Organization
2013 Journal of Asthma 14 Australia Health Older adults with No
and Allergy chronic health
Educators issues
Evers, Patient Education 24 Australia Health Older adults No
U. 2013et al. and Counseling
Flocks et al. Environmental 67 USA Health Agriculture, No
(2001) Health farmworkers
Perspectives
Frame and International 92 Australia Sustainability Consumers No
Newton Journal of
(2007) Consumer
Studies
French (2013) Social Business 13 UK Social business Organisations No
Gadema and Food Policy 286 UK Environment Consumers No
Oglethorpe (carbon
(2011) footprint of
food products)
(Continued)
 JOURNAL OF MARKETING MANAGEMENT 1117

Table 3. (Continued).
Authorship Population in Definition of
Reference Journal Citations origin Research topic focus empowerment
Gallegos- Maternal and Child 4 USA, Health (food) Women (mothers/ No
Riofrío et al. Nutrition Ecuador caregivers of
(2018) children)
Gerrard (2018) Adoption and 2 South Adoption Childless black No
Fostering Africa South
Americans
Hall et al. Canadian Journal 21 Canada Health Health promoters No
(1997) of Public Health
Harrison et al. Journal of 9 UK Health (cancer) General No
(2019) Healthcare population
Leadership
Hastings Scandinavian 0 UK Social change Behaviour change No
(2018) Journal of Public specialists
Health
Hecker et al. EcoHealth 5 Canada, Health Local experts No
(2013) Nepal (encephalitis
risk factors)
Hightow- AIDS Patient Care 93 USA Health Youth No
Weidman and STDs
et al. (2011)
Howard (2004) Design Issues 47 USA Environment Citizens No
(ecological (laypeople)
design)
Joiner et al. Social Marketing 2 USA Health Youth No
(2000) Quarterly
Kahouei et al. Electronic 0 Iran Health Students No
(2018) Physician (health literacy)
Keller and Journal of Social 7 USA Health Youth No
Wilkinson Marketing
(2017)
Kirkwood and Professional 45 USA Health People with No
Stamm Psychology: mental illness
(2006) Research and
Practice
Krishnaswamy Biomedical and 9 India Food security Women No
(2001) Environmental
Sciences
Marko and Family and 10 Canada Safety (driving Youth No
Watt (2011) Community under
Health substances)
Martam (2016) Journal of 16 Indonesia Gender inequality Women/men No
Marketing (violence
Management against women)
Matsudo et al. Public Health 250 Brazil Health (physical Community No
(2002) Nutrition activity)
McVey and Leisure Sciences 2 Australia Sexualisation in Women No
Harrison social
(2019) marketing
campaign
Moulding Critical Public 31 Australia Health (health Health promoters No
(2007) Health promotion)
Mui et al. Ageing 39 USA, China Health (mental Older Chinese- Yes
(2013) International health) American
volunteers
Palmer and Journal of the 42 USA Health (healthy Chefs No
Leontos American food cooking)
(1995) Dietetic
Association
(Continued)
1118 T. KAMIN ET AL.

Table 3. (Continued).
Authorship Population in Definition of
Reference Journal Citations origin Research topic focus empowerment
Pires and International 8 Australia Health (healthcare Consumers No
Stanton Journal of [ICT]) (healthcare
(2008) Behavioural and consumers)
Healthcare
Research
Raeburn New Zealand 0 New Health (health General No
(1987) Health Review Zealand promotion) population
Rankin (2013) New Library World 3 UK Literacy (reading) Community No
Rankins (2002) Ecology of Food 6 USA Health (healthy Women (African No
and Nutrition cooking) American)
Reid (2004) Science as Culture 8 USA Health (tobacco) Citizens No
Ribeiro and African Journal of 1 Canada Environment Communities No
McMartin Science, (sustainable (vulnerable and
(2019) Technology, development poor)
Innovation and and poverty
Development reduction)
Roth (1994) Journal of Public 89 USA Health Consumers Yes
Policy and (patients/
Marketing healthcare)
Rootman et al. Canadian Journal 4 Canada Health (health General No
(2010) of Public Health promotion) population
Singh and Procedia – Social 38 Malaysia Environment NGOs’ target No
Rahman and Behavioral (environmental groups
(2012) Sciences education) (students,
citizens)
Sundstrom Journal of Social 9 USA Health Women (pregnant No
(2013) Marketing (reproductive women)
health)
Thomas (2016) International 3 Sweden Voting Citizens No
Review on (marginalised in
Public and Non- Peru)
Profit Marketing
Thompson Marine Policy 22 Canada Environment Local fisheries No
(2008) (sustainability
of fisheries)
Tilbury and Applied 66 UK, Environment Community No
Wortman Environmental Australia (sustainability –
(2008) Education and fishery)
Communication
Vel et al. Marketing Review 4 UAE, Health (breast Women No
(2016) Canada self-
examination)
Warner (2014) Journal of 12 USA Behaviour change Extension agents No
Agricultural
Education
Wilsnack Substance Abuse 43 USA Domestic violence Women (women No
(2012) and and alcohol who drink
Rehabilitation consumption alcohol)
Wilson et al. The International 33 USA Health (physical Community (low No
(2013) Journal of activity, i.e. income, high
Behavioral walking) crime)
Nutrition and
Physical Activity
Zharekhina International 11 Australia Health (alcohol Social marketing Yes
and Kubacki Journal of consumption) advertising
(2015) Nonprofit and approaches
Voluntary Sector (empowering
Marketing and
patronising)
 JOURNAL OF MARKETING MANAGEMENT 1119

Geographic analysis of authorship origin

Across all 55 studies, we identified authors affiliated with institutions in 20 countries.
The specific country was counted only once for each study to avoid artificially inflating
the results, even where multiple co-authors were from institutions in the same
country. Authorship origin appears to be dominated by the USA, with 20 studies
authored by at least one US-based co-author. Three other Western countries followed
the USA, namely Australia (n = 9), Canada (n = 8) and the United Kingdom (n = 6) and,
together with New Zealand (n = 2), Ireland, Denmark, Belgium, and Sweden (n = 1
each), these nine predominantly English-speaking, high-income countries from the
Global North were represented in nearly 86% of the studies (n = 46). Although authors
from India were represented in three studies, authors from Iran in two studies, and
several other non-Western countries in one study each (Brazil, Nepal, Poland,
Indonesia, Malaysia, South Africa, UAE, China, and Ecuador), only nine studies were
authored solely by authors from the Global South. The under-representation of
authors based at institutions in the Global South shows that empowerment remains
a predominantly ‘Western’ concept.

Research topic
The majority (n = 34) of the research topics in the analysed studies were related to health;
of these, three were focused on health promotion and three on physical activity. The rest
of the studies were focused on various health-related behaviours (e.g. physical activity,
smoking, breast self-examination, healthy eating or cooking), health-related states (e.g.
cancer, mental health, or reproductive health), health-related skills (public health workers’
skills and health literacy) or other health-related topics (antibiotic resistance, tobacco
control, healthcare financing, encephalitis risk factors, and ICT in healthcare). A few
studies analysed issues related to the environment (n = 6) and were focused on fishery
sustainability, environmental education, sustainable development and poverty reduction,
ecological design, and the carbon footprint of food products. The remaining studies
focused on a wide range of diverse topics (see Table 3).

Population in focus
The populations most frequently regarded in the studies as being in need of empower­
ment were women (n = 9), followed by communities (n = 6), consumers (including health­
care consumers and patients; n = 4), young people (n = 4), health promoters (n = 3), the
general population (n = 3), older adults (n = 2), and citizens (n = 2). The remaining studies
focused on a range of other populations, such as public health activists, general practi­
tioners, patients, and farmworkers (see Table 3).

Definition and conceptualisation of empowerment

Of the 55 identified studies, only three defined empowerment (Erben et al., 1999; Mui et al.,
2013; Roth, 1994), and one defined empowering approaches in social marketing commu­
nication (Zharekhina & Kubacki, 2015). In an overwhelming majority of the studies, the word
‘empowerment’ was employed to represent a value, a goal in itself, a signifier of beneficial
outcomes, a precondition of behavioural or social change, a characteristic of a social group
(e.g. empowered consumers) or an activity (e.g. empowering dialogue, empowerment
1120 T. KAMIN ET AL.

education) without definition of the meaning of empowerment and what it stands for. In
a handful of cases, empowerment was also used as a synonym for people’s self-confidence
in their ability to effect a new behaviour or a belief that one can make a difference.
None of the 55 studies operationalised either empowerment process or empowerment
outcomes in a way that would allow them to be rigorously measured. Accordingly, detailed
analysis of methodological approaches and study designs for measuring empowerment
became irrelevant for the purpose of this study. Further, as empowerment was explicitly
conceptualised in only four studies, our assessment focused on particular elements of
empowerment and their descriptions as articulated in the studies. Our analysis of these
elements showed that they were predominantly related to empowerment at the individual
level, with an emphasis on the importance of factors such as increased knowledge, improved
skills and/or literacy, self-efficacy, capacity, the feeling of having control over an issue,
increased awareness about an issue, and improved awareness of rights. Several other ele­
ments of empowerment identified in the studies could be ascribed to empowerment at the
collective level and focus on the role of the studied population in participation in decision-
making, their financial independence, access to better services, elimination of oppressive
conditions, ownership of assets and resources, their social network, and awareness of external
oppressive conditions and finding ways to eliminate them. In the remainder of this section, we
provide a brief analysis of how empowerment was conceptualised in the four studies that
defined it, namely Roth (1994), Erben et al. (1999), Mui et al. (2013) and Zharekhina and
Kubacki (2015).
In the first study, Roth (1994) conceptualised empowerment as a value. Without
referring to any previous definitions of empowerment or to empowerment theory, he
attempted to capture the value of empowerment descriptively, connecting it with mini­
mised reliance on others, being able to make one’s own decisions, feeling capable of
evaluating a recommended therapy, and comprehensive understanding of the health
issue (e.g. being able to understand fully and diagnose the problem and its causes, relate
symptoms to treatments, engage in meaningful dialogue with physicians, and prescribe
a course of action alone or in conjunction with a physician). From the way Roth engaged
with the concept of empowerment there emerged a picture of a multidimensional con­
cept that could be measured at the individual level.
In the second study, Erben et al. (1999) relied on Rappaport’s studies on empowerment,
defining it as processes of social interaction of individuals and groups with the aim of
enabling people to enhance their individual and collective skills, and the scope and range
of their control of their lives in a given community. Erben and colleagues argued that, in
the context of public health, empowerment (associated with skills, control over one’s life,
and living and working conditions) was the aim of social interaction, since it referred to
a constant process of enabling individuals and groups to take part in collective action.
In the third study, Mui et al. (2013) described empowerment as the process of social
interaction of individuals and groups with the aim of enabling people to enhance their
individual and collective skills to participate in a community. Miu and colleagues refer to
Erben et al. (1999) for their definition of empowerment. Their study reported an evaluation
of a programme, Phone Angel, focused on older Chinese-American volunteers who were
supposed to become empowered via training for providing help to Chinese-American
caregivers. Mui and colleagues considered the empowerment experienced by the partici­
pants to be associated with several factors, including increased self-esteem (having a better
 JOURNAL OF MARKETING MANAGEMENT 1121

sense of self and sense of purpose), improved self-efficacy (better communication and
problem-solving skills), increased knowledge (caregiving experience, health information,
time management, increased information and resources), and increased mental health and
happiness (strengthened trusting relationships with other volunteers and caregivers as well
as increased social bonding and social support among volunteers). The study evaluated
empowerment outcomes of the programme by asking volunteers to respond to state­
ments about perceived benefits they received from the programme, for example ‘I feel
empowered and happier because I have the opportunity to serve others’. Other statements
in the evaluation survey explored the perceived contribution to the community through
this programme, development of a stronger sense of purpose in life, development of an
ability to improve personal time management skills, development of a better understand­
ing of one’s own emotions, enlargement of one’s circle of friends, feeling better about
oneself, development of better communication skills, development of a broader vision of
life, perception of being better able to share with one’s family and friends the knowledge
and skills one has learned, improvement of awareness of community issues, family support
for doing volunteer work, gaining respect in the family for being a volunteer, improvement
of family relationships, and a perceived increase in being active in social activities.
Participants in the programme in general strongly agreed with most of the statements,
indicating that the pilot programme was a success.
Finally, Zharekhina and Kubacki (2015) study, which was informed by the work of
Rappaport (1981), Feste and Anderson (1995) and Grace (1991), applied the concept of
empowerment to communication approaches in social marketing campaigns. The
authors argued that communication approaches can be empowering (as opposed to
patronising) when they employ communication techniques, such as questions, story­
telling and behavioural language, which encourage freedom of choice (encouraging the
target audience to take control of their own lives and rights) and engage people in
personal development. They further argued that social marketing messages can be
empowering in promoting behaviour change if they do not tell people what to do but
rather provide them with alternative behavioural options.

Discussion
The results of our systematic literature review provide several discussion points for social
marketers. As critical social marketing scholars, we urgently need to engage with these
points to provide a robust foundation for our discipline through critical reflection and
analysis of its key concepts.
Concordantly with previous studies on contemporary behaviour and social change
discourse (e.g. Chaudhuri, 2016; Kriznik et al., 2018), our results show that the use of the
concept of empowerment is on the rise in social marketing studies. Further, adding to the
recent findings reported elsewhere (Kamin, 2019), our study provides new evidence
demonstrating that in the social marketing studies represented in our sample, the con­
cept was predominantly used in vague and diverse ways, often as a word signifying
a desired goal, a positive characteristic of a group or an activity, a value that is supposed
to convey the meaning of something good in itself, or as a synonym for being capable of
or self-confident in taking up a new behaviour.
1122 T. KAMIN ET AL.

The lack of conceptual clarity was also evident among the four social marketing studies
that attempted to define and conceptualise empowerment. For example, in Roth’s
empirical study Roth (1994), the concept of empowerment was not initially defined in
the research model and then measured, but instead was identified in the qualitative
analysis of the data gathered via in-depth interviews with healthcare ‘consumers’ about
values associated with information use, patient–physician relationships and compliance.
Thus, empowerment was conceptualised a posteriori, and proposed as one of the key
values in the model driving both behaviour and mental outcomes, namely health involve­
ment and preventive behaviour. Roth’s study thus provides a conceptual model for the
role of empowerment in the health model; however, it does not propose measurements
for the construct of empowerment that could be used either for theory testing or for
social marketing applications. Roth’s model assumes that empowerment corresponds
mainly to one dimension of psychological empowerment (Rappaport, 1987), as presented
in Table 1, namely the intrapersonal dimension (Zimmerman, Zimmerman et al., 1992;
Zimmerman, 1995). On this view, empowerment is an individual-focused and down­
stream-oriented concept. According to the results of our analysis, this is a prevalent
conceptualisation of empowerment in social marketing.
Our analysis also demonstrates that social marketing studies have addressed factors
and dimensions of empowerment in a simplistic way, without, for example, making
a distinction between the constructs that represent independent variables affecting
empowerment (e.g. literacy) and concepts that present features, elements and properties
of the construct of empowerment (e.g. self-efficacy, control or competence; see Table 1).
The empowerment terminology employed in the studies was rarely defined, much less
operationalised or measured, a shortcoming that provides arguments for those who
criticise practical and problem-oriented disciplines like social marketing for not suffi­
ciently considering the rich and complex traditions behind the concepts they adopt
(Rissel, 1994). Yet, being a discipline that pursues change that facilitates social good
(Gordon, 2019; Szablewska & Kubacki, 2019), social marketing scholarship has much to
gain from more nuanced engagement with empowerment theory, whose goal is com­
munity betterment. In addition, social marketing programmes that claim empowerment
as one of their goals would gain credibility if they were able to demonstrate their success
in enabling empowerment processes and in achieving empowerment outcomes in their
pursuit of social change. For example, when empowerment was defined by Mui et al.
(2013), the concept was not operationalised, despite empowerment of the target popula­
tion being among the main goals of the programme under study. We find this proble­
matic, as several instruments have already been developed for measuring empowerment
(e.g. Aziz et al., 2021; Herbert et al., 2009) and could help social marketers to clarify the
empowerment outcomes they are pursuing.
In the Mui et al. study, it is evident that the initiators of the programme and the
volunteers had met face-to-face several times, which would have allowed evaluators of
the programme to assess its empowerment process. However, the empowerment process
(i.e. awareness of the existence of powerlessness and alienation; learning and gaining
awareness about one’s disadvantaged position and developing a willingness to change it;
sharing one’s power and building on one’s desires, competences and abilities to poten­
tially bring about change; and overcoming social oppression and achieving social change,
as described by Hur, 2006) was not considered from the perspective of power positions
 JOURNAL OF MARKETING MANAGEMENT 1123

and power relations. Volunteers were ‘empowered to act’; they were given a function to
help others, and through learning how to help others and carrying this out, they were also
supposed to help themselves (i.e. helper therapy), by, for example, learning problem-
solving skills, social support skills, time management, and communication skills.
Nevertheless, this is an example of a top-down, expert-driven approach, and questions
remain as to how much of the power was truly internalised by the volunteers and how
much space was left for true ‘participant orientation’ of the programme.
This observation is concordant with the findings of Stead et al. (2013) that most social
marketing programmes, even if they claim to be customer-oriented, are designed by
experts and not by the participants (target groups). In the context of application of value
co-creation in social marketing, Domegan et al. (2016) warned that although community
members may be involved in programme development as research participants or
recruited to assist in programme implementation, this does not necessarily mean that
participants who might co-create programmes can also co-create value. Similarly, we can
ask for programmes that claim to enable empowerment solely via participation or
involvement of participants in some stages of the programme design. Does involvement
of participants in a programme via training, for example, truly bring them empowerment?
There is no doubt that the programme presented by Mui et al. (2013) had several positive
outcomes for all the people involved. Nevertheless, how much can we say, on the basis of
the data provided, about the empowerment of the volunteers, apart from the fact that
they were ‘given a power’ and, through training, enabled to help others (caregivers)?
Rigorous measurement of empowerment outcomes would be crucial to assess this.
However, empowerment outcomes were evaluated by means of a simple evaluation
questionnaire asking volunteers to report the level of their agreement with statements
about perceived benefits they received from the programme. From the evaluation design,
it is evident that the study did not make a distinction between concepts that usually
present independent variables, which in various ways effect empowerment, and concepts
that present features, elements and properties of the construct of empowerment. For
example, one evaluation statement combined several variables to be considered by
respondents, asking them directly about their feelings of empowerment and happiness
with regard to certain behaviour. Social marketers would need to reflect critically on the
implications of adopting a paradigm of empowerment in their work, particularly when
tackling complex societal problems such as those involving marginalised groups of
people.
Critical reflection on another paper in our sample that defined empowerment,
Zharekhina and Kubacki (2015), leads to the conclusion that their study did not focus
on empowerment per se as defined earlier in this review, but on communication
approaches that were believed to have potential to be empowering. As such, they
analysed only the production side, not the reception of supposedly empowering
approaches and their effects on the target audiences, to consider whether the messages
under study contributed to (dis)empowerment of target audiences. Empowerment is
always in the eye of the beholder, and having a choice (in behaviour) was linked to
encouraging an individual to feel empowered. However, this proposition was not tested
in the study. The right to choose does not necessarily give a person a feeling of having
control over their life. Further, so-called empowering communication might also have
a disempowering effect, if, for example, one perceives usefulness in recommendations for
1124 T. KAMIN ET AL.

behaviour changes but does not have the capacity or resources (material, cultural or
social) to integrate them into one’s everyday life. This observation fits well with Anderson
(1996) critique of the adoption of the concept of empowerment for behaviour and social
change management, which, according to him, often supports the dominant ideology of
individualism by deflecting attention from social issues such as labour market segrega­
tion, racism, sexism, and the structural conditions that perpetuate poverty: ‘The gaze of
the health professional becomes fixed upon the behaviour of the individual as structural
constraints fade into the background’ (Anderson, 1996, p. 702). Could we argue similarly
for the gaze of supposedly empowering social marketing communication approaches?
How much do they stay on the surface of the problem, reflected in individual behaviour,
and how often do they encourage audiences in challenging the power relations and
systemic inequalities that often push people into disadvantageous positions and proble­
matic behaviours?
These issues with the adoption of the concept of empowerment in the social
marketing field show that critical social marketing scholarship needs to engage with
questions that Erben and colleagues (Erben et al., 1999) already asked years ago. In
their short conceptual article, Erben et al., who advocated for empowerment as a key
strategic concept of health promotion, put forward the argument that social marketing
was incompatible with the concept of empowerment. Their understanding was
informed by the belief that social marketing did not reflect on issues such as commu­
nity participation or community involvement. However, since the publication of their
article, a significant body of knowledge has been developed that can be broadly
defined as community-based social marketing (see, for example, McKenzie-Mohr,
2011). The concept of community-based social marketing provides an opportunity for
social marketers to consider the importance of community in facilitating empower­
ment. The empowerment paradigm needs to take into account that resources such as
knowledge, money, expertise, and power remain inequitably distributed between
socio-economic, ethnic, age, and gender groups in any given society. Heterogeneous
target populations and social marketing programme designers might share an interest
in outcomes in a particular discipline (e.g. health, clean energy, environmental con­
servation, human rights) but are nevertheless, as Erben et al. (1999) argued, different in
terms of their access to resources that can bring about social change in favour of living
and working conditions conducive to the desired outcome, such as good health. Erben
et al. (1999) criticised social marketing with regard to empowerment, as in their view
most social marketing interventions aimed only to perfect programmes to the point
that people would adopt recommendations and change their behaviours accordingly.
They found that it was behavioural change that mattered for social marketing, with
social change (as a goal of empowerment) becoming a matter of rhetoric. The empow­
erment process was supposed to confront people and organisations with different,
even conflicting, interests, which should lead to social action. Thus, programmes that
aim to bring about social change would need to put selected issues on the political
agenda and secure budgets for enabling resources and opportunities for facilitating
social changes. Since the publication of Erben et al. (1999) paper, systems-thinking
social marketing (Domegan et al., 2016), which stresses the importance of upstream
and midstream social marketing programmes in addition to downstream and indivi­
dual-focused social marketing, has emerged. The systems-thinking approach may be
 JOURNAL OF MARKETING MANAGEMENT 1125

seen as closer to the empowerment paradigm in comparison to the majority of down­

stream social marketing programmes, most of which are expert-driven (Domegan et al.,
2016; Stead et al., 2013) and, perhaps, more concerned with behavioural than social
change.

Conclusions and implications

Empowerment in the social marketing discipline: critical reflection and
implications
This is the first systematic review to analyse how social marketing research and studies
have engaged with the concept of empowerment and to reflect critically on its usage
and conceptualisations. This systematic review enables critical social marketing scholars
to better understand empowerment theory in the context of the social marketing
discipline. Moreover, with the findings and demonstration of the value of empower­
ment theory for pursuing community betterment and social change, this paper provides
instruction and guidance for social marketers as well as identifying implications for
future critical social marketing research on empowerment across different contexts and
levels.
Our results and critical evaluation of social marketing studies that include definitions
and conceptualisations of empowerment show clearly that despite a growing interest in
the concept of empowerment, there is a lack of comprehensive understanding of
empowerment theory and its application to the social marketing approach to addressing
social problems. While the argument that social marketing is incompatible with the
empowerment paradigm (Erben et al., 1999) may seem dated to many social marketers
who work in community-based social marketing, systems-thinking social marketing, and/
or who employ co-creation of value, the remaining arguments identified in this review
appear to be valid: that is, in the overwhelming majority of social marketing studies,
empowerment is a vague and poorly defined concept. Our comprehensive literature
review of empowerment theory has enabled us to develop a working definition of
empowerment for the social marketing discipline. In order for the concept of empower­
ment to be used properly and more widely in social marketing scholarship, there is a need
for a more consistent adaptation of empowerment theory and clarification of the concept
within the critical social marketing sub-discipline.
We therefore propose a conceptual framework of empowerment (see Figure 2)
intended to help social marketers in the development and design of emancipatory social
marketing programmes, thereby generating practical and scientific knowledge relevant
for challenging human oppression and creating conditions in which people can thrive.
This framework urges social marketing practitioners and scholars to encourage empow­
erment process and measure empowerment outcomes while being aware (1) that there
are different stages of the empowerment process in which power relations between
different individuals, groups of people, communities and organisations should be
acknowledged and addressed; (2) that empowerment should be observed at different
levels (individual, organisational and community) and in different dimensions (e.g. intra­
personal, interactional and behavioural), which should subsequently be used for measur­
ing empowerment outcomes of social marketing programmes; and, finally (3) that rather
1126 T. KAMIN ET AL.

than a goal of a social marketing programme, empowerment should be an integrated part

of a social marketing strategy that acknowledges specifics of the population in focus, their
living circumstances, and the time frame of the programme.
In relation to our proposed conceptual framework of empowerment (Figure 2), we
further discuss the main aspects and principles of empowerment theory relevant for the
development of critical social marketing, which can be sources for future research and
critical reflections. First, informed by systems-thinking social marketing (Domegan et al.,
2016), better understanding of different levels and dimensions of empowerment can
equip social marketing researchers to think critically about the co-dependencies among
different societal levels. Downstream, individual-level-focused behaviour change pro­
grammes have been criticised for their lack of consideration of the complexities of the
social issues they attempt to address (Kennedy, 2016; Luca et al., 2016). Psychological
empowerment has three dimensions, and intrapersonal empowerment (the dimension
most often studied) needs to be considered alongside interactional and behavioural
empowerment to fully appreciate their conflicts as well as their interdependencies. This
is especially important if social marketing scholars seek to understand, analyse and
measure the effects of empowerment for individuals, groups, communities and society
in general. A particularly interesting factor, and one with major consequences, is the
relationship between the dimensions of psychological empowerment. More specifically,
the need of individuals to develop self-efficacy, competence and control in personal
situations may undermine their initiatives to engage cooperatively in collective action.

Figure 2. Conceptual framework of empowerment for the social marketing discipline.

 JOURNAL OF MARKETING MANAGEMENT 1127

Factors of intrapersonal empowerment have the potential to hinder interactional empow­

erment and, conversely, determinants of interactional empowerment could constrain
intrapersonal empowering outcomes (Peterson et al., 2005).
Second, in addition to levels and dimensions of empowerment, voices have emerged
calling for stronger recognition of the notion of power in social marketing (e.g. Kubacki
et al., 2020; Spotswood et al., 2017) and its role in empowerment to unpack the relation­
ships between participants in social systems, the sources of their power, and the role of
various forms of capital (e.g. Kamin & Anker, 2014) as instruments of power. Although the
shift from top-down, expert-driven programmes in social marketing is a step in the right
direction, we cannot let it become a surface-level engagement with the concept of
empowerment used as an excuse for pseudo-empowering programmes. Power and
resilience can emerge at all levels of empowerment, and more research needs to explore
them in practice.
Third, empowerment can only be a meaningful social marketing goal if there are
consistent and reliable measurements of empowerment that make it possible to assess
the effect of social marketing programmes on individuals, groups, communities, and
society in general. Currently, although social marketing programmes attempt to influence
the empowerment of citizens, they remain vague on how this goal can be measured over
time and across diverse populations, cultures and social issues. Some empowerment
measurement instruments could be adopted and adapted from other disciplines that
social marketing, as an interdisciplinary field, already shares a theoretical base with (e.g.
health communication, promotion and education). These instruments, whose validity and
reliability is already established, could provide a foundation for further critical social
marketing research that considers the contextual and cultural dependence of the concept
of empowerment.
Fourth, the concept of empowerment is used in social marketing as a signifier of
positive impact. Yet, there is evidence indicating that empowerment does not always
lead to beneficial outcomes (Petrič et al., 2017a). Empowerment can be based on unpro­
ductive and inappropriate competences that might give an individual a misleading feel­
ing of control and self-efficacy and thus illusory empowerment, leading to dangerous
choices that impede positive outcomes (Petrič et al., 2017a). Moreover, interactional
empowerment raising critical awareness may not deliver on its promise if, at a wider
societal level, there is no infrastructure that would allow individuals to pursue their goals
and enact new behaviours, leading to frustration, disappointment, and eventually dis­
empowerment or even dysfunctional empowerment (Petrič et al., 2017a). For example,
anti-vaccination groups might feel very empowered with regard to vaccination issues, but
from the epidemiological point of view such empowerment does not help protect the
health of the population (see, for example, Bach, 2021). When we talk about empower­
ment, we are actually talking about empowerment with regard to a particular domain and
with regard to individuals, organisations or communities. Thus, forms of empowerment
cannot be generalised; they depend on contexts and people (Zimmerman, 1995). One can
be empowered in relation to one issue, but disempowered in relation to several other
issues.
Fifth, a distinction needs to be made in social marketing programmes between
empowering outcome and process. Theories describe empowerment as both a process
and a state or an outcome, implying that degrees of empowerment depend on activities
1128 T. KAMIN ET AL.

and social structures that enable empowerment of an individual or a community, and can
be manifested in characteristics such as ability, knowledge, attitude, and behaviour that
might lead an individual, community or organisation to better living. Empowered out­
comes are consequences of empowered processes and might include situation-specific
perceived control and resource mobilisation skills at the individual level, or evidence of
pluralism, existence of organisational coalitions or community resources at the commu­
nity level (Perkins & Zimmerman, 1995). Thus, the concept of empowerment includes
participation with others to achieve goals, efforts to gain access to resources, and critical
understanding of the socio-political environment (Perkins & Zimmerman, 1995).
Finally, the main idea of empowerment is that it leads to change and individual,
community and social betterment. Moving beyond a narrow focus on behavioural
change, social marketing can refocus on the achievement of social good via clearly
defined and measured empowerment goals. There is a great need for a holistic examina­
tion of the concept of empowerment, including its specific principles and conditions that
need to be fulfilled, before we can characterise actions and practices as empowering.
Addressing the questions of what the goal of specific activities, actions and practices is
and how it contributes to individual, community and social betterment could yield
important guidelines for critical social marketing scholars and their future conceptualisa­
tion of empowerment, and its manifestations in practice and social reality.

Limitations of this study

Despite the overall strengths of this review, some limitations should be noted. First, the
conclusions are based on searches conducted in established and accessible databases of
scientific journals and literature; however, we are uncertain how the search strategy
affected the results of our review. For instance, despite our use of broad search terms
and a range of databases, the results were dominated by health and public health journals
and health issues, delivering a surprisingly low number of studies in the environmental
domain. Hence, there is a need for future studies to extend our research across specific
research domains such as the environment (e.g. Maibach, 1993). Further, the majority of
the studies were conducted in Western countries, and we included only papers published
in English, which potentially leads to publication bias.
Second, as the majority of studies included in the review did not define the concept of
empowerment, some of the results needed to be assessed implicitly from the context of
the studies, which might have affected the results. However, throughout our analysis, the
results were discussed and elaborated by the authors, and any disagreements and
discrepancies were resolved with the purpose of preserving the reliability of the findings.
Third, our search terms included empower* to focus the review on empowerment as
a concept commonly used in social marketing and to provide an empirical and intellectual
foundation for further research. However, we acknowledge that other terms, such as self-
determination, autonomy, locus of control, and self-efficacy, may be used in social
marketing studies as concepts relating to empowerment. Although some of these terms
correspond to dimensions of empowerment, they are conceptually different from
empowerment and provide opportunities to extend our research.
 JOURNAL OF MARKETING MANAGEMENT 1129

Finally, due to the time required for completing the search, analysis and publication of
the final manuscript, there is a possibility that this study has omitted some of the more
recently published literature.

Disclosure statement
No potential conflict of interest was reported by the author(s).

Notes on contributors
Tanja Kamin is Associate Professor of Marketing communications and head of Social Psychology
research center at Faculty of Social Sciences, University of Ljubljana, Slovenia. Her research is
oriented towards critical studies of everyday life, which is seen as an intersection and confrontation
of macro and micro politics. Her writings survey cultural capital, empowerment in relation to health,
food, clean energy and the role of (social) marketing in shaping behaviours.
Krzysztof Kubacki is Professor of Marketing and Society at Auckland University of Technology, New
Zealand. Most of his recent work focuses on the identification, trial, evaluation and critique of
behaviour change programmes, but Krzysztof is also interested in the intersecting roles of ethics,
power and vulnerability in behaviour change and social marketing systems.
Sara Atanasova is Assistant Professor at the Centre for Methodology and Informatics, Faculty of
Social Sciences, University of Ljubljana, Slovenia. Her main research is focused on empowerment
theory and on investigating the effects of information and communication technologies on various
social aspects of health and healthcare.

ORCID
Tanja Kamin http://orcid.org/0000-0002-9498-9301
Krzysztof Kubacki http://orcid.org/0000-0002-4002-5996
Sara Atanasova http://orcid.org/0000-0003-4162-1367

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 FRONT-OF-PACK MARKETING ON INFANT AND TODDLER FOOD 1

Front-of-pack marketing on infant and

toddler foods: Targeting children and their
caregivers
Alexandra Chung,1,* Judith Myers,1 Helen Skouteris,1 Kathryn Backholer2

1
School of Public Health and Preventive Medicine, Monash University, Melbourne, VIC, 3004, Australia
2
Global Centre for Physical Activity and Nutrition, Institute for Health Transformation, Deakin University, Geelong, VIC, 3220, Australia

Submitted: 15 June 2023; Revision requested: 2 October 2023; Accepted: 4 October 2023

Abstract
Objective: To identify and quantify child- and caregiver-appeal on front-of-pack marketing on infant and toddler foods in the Australian food
supply.
Methods: Content analysis of the presence and type of front-of-pack marketing techniques displayed on the front-of-pack of infant and toddler
foods (for children aged up to 36 months) available in Australia’s two major supermarkets’ online stores.
Results: Infant and toddler foods are promoted by up to 15 unique marketing techniques on the front-of-pack with an average of eight unique
features per pack. A majority of food packages included marketing techniques targeting children, and all food packages included marketing
techniques targeting caregivers, most commonly promoting health and nutrition.
Conclusions: Infant and toddler food packages are saturated with front-of-pack marketing features that target children and caregivers. To
adequately protect young children’s diets from the harmful influence of food marketing, and to promote the development of optimal feeding
behaviours, government-led controls of all marketing intended to influence children’s diets are required. In the context of marketing infant and
toddler foods, this includes regulation of front-of-pack marketing techniques targeted to children and their caregivers.
Implications for Public Health: Comprehensive government-led food marketing controls are required to protect children’s diets from the
harmful influence of marketing. The scope of these controls must include all unhealthy food marketing that children are exposed to and all
other forms of unhealthy food marketing intended to influence children’s diets.
Key words: food marketing, food industry, children, nutrition, policy

Introduction days per week.5 Commercial infant and toddler foods include
packaged foods specifically intended for consumption by children
nhealthy diets are a leading burden of disease in Australia

U
and globally.1 Dietary patterns are established in early
childhood, therefore early life is a critical period to support
the development of healthy dietary behaviours.2 Among Australian
children aged under five current diets fail to meet recommended
guidelines for core food groups including vegetables, cereals and
grains, and meat and alternatives, and exceed recommended intakes
of discretionary foods.3 Furthermore, young children experiencing
socioeconomic disadvantage are more likely to consume unhealthy
food and drinks compared to children from high socioeconomic
backgrounds.4 Young children’s diets also rely on commercially
produced ready-made foods with one in two Australian children aged
up to five years consuming commercially made foods one or more
aged six months to 3 years. These products represent a growing
segment of the Australian grocery market with new products coming
onto the market each year,6 and an annual revenue of around $390
million in 2023.7 They are also aggressively marketed to parents and
children.6,8 Unhealthy food marketing negatively influences children’s
dietary behaviours, increasing their requests and preference for, and
consumption of, unhealthy food and drinks.9
Front-of-pack marketing is a key strategy utilised by the processed
food industry to influence consumer attitudes and behaviour.10,11
Marketing tactics are pervasive on food and beverage product
packaging with the use of colourful images and logos, popular
children’s characters, and health and nutrition claims.12 Front-of-pack

*Correspondence to: Alexandra Chung, School of Public Health and Preventive Medicine, Monash University, 553 St Kilda Road, Melbourne, Vic, 3004, Australia;
e-mail: Alexandra.chung@monash.edu.au.
© 2023 The Author(s). Published by Elsevier B.V. on behalf of Public Health Association of Australia. This is an open access article under the CC BY-NC-ND license (http://
creativecommons.org/licenses/by-nc-nd/4.0/).
Aust NZ J Public Health. 2023; Online; https://doi.org/10.1016/j.anzjph.2023.100101

2023 VOL. XXX NO. XXX Australian and New Zealand Journal of Public Health 1
2 Full Length Article
marketing is a leading source of children’s exposure to unhealthy
food marketing13 and a key component of integrated marketing
campaigns.11 However, children are not the only intended audience
of front-of-pack marketing with parents and caregivers (herein
referred to as caregivers) also targeted.11 Many of the features of
front-of-pack marketing have been shown to attract children and
caregivers’ attention, shape product associations, and influence
purchase intentions and decisions.14
The World Health Organization (WHO) Set of Recommendations on
the Marketing of Foods and Non-Alcoholic Beverages to Children
recommends that governments implement strategies to limit
children’s exposure to front-of-pack and other forms of food
marketing.15 To protect young children in particular, the WHO’s
Ending Inappropriate Promotion of Commercially Available
Complementary Foods for Infants and Young Children Between 6
and 36 Months in Europe (2019) aims to ensure information on the
packages of commercially available complementary foods will
‘neither mislead consumers nor undermine public health
recommendations’.16 The globally recognised United Nations
Convention on the rights of the child – of which Australia is a
signatory - obliges governments to uphold children’s rights to the
highest standard of health.17
Research in Australia has found commercially available infant and
toddler food packages are characterised by multiple front-of-pack
claims; however, very few of these claims are regulated under
Australia’s food standards codes. Standard 1.2.7 outlines requirements
for health and nutrition content claims but does not apply to infant
food, whilst Standard 2.9.2 outlines compositional requirements and
vitamin and mineral content claims on food for infants but does not
cover other types of claims. This means most marketing features on
infant and toddler foods are provided at the manufacturers’
discretion.6,18 Front-of-pack marketing creates an inflated perception
of health, misleading consumers and normalising the purchase and
consumption of commercially made foods that are typically highly
processed and high in added sugar and salt.6,19 What is not yet well
known is the extent to which front-of-pack marketing on infant and
toddler foods targets caregivers and the nature of the techniques
used to do so. Monitoring both child-directed and caregiver-directed
front-of-pack marketing on commercial infant and toddler food
products in Australia is important to inform the development of food
and nutrition policies that adequately protect children’s diets from
commercial influence. The aim of this study therefore was to identify
and quantify child- and caregiver-directed front-of-pack marketing on
infant and toddler foods in the Australian food supply.
Methods
Data collection
An automated online data scraping tool was utilised to collect images
and product information of approximately 30,000 food and drink
items from the online sites of Australia’s two major supermarkets on
December 14, 2021, representing 65% of Australia’s total grocery
market.7 Scraped data were extracted and exported into a Microsoft
Excel spreadsheet for analysis. This study focused on a subset of food
items marketed for consumption by infants and toddlers aged 4 to 36
months. To identify infant and toddler food items, we used the
supermarkets’ own categories of ‘baby and toddler food’ to select
relevant products. Across the two supermarket websites, 345 items
were identified for inclusion (excluding infant formula and toddler
milk drinks). Data were merged across the two supermarkets and
cleaned, removing 85 duplicates and a further 30 items due to
missing image data to create an analytical dataset of 230 food items.
Missing data were due to images not collected by the data scrape, or
in a small number of cases, the images extracted from supermarket
sites appeared to be stock images that did not include any marketing.
Product images were used to verify that items were marketed for
consumption by infants (aged up to 12 months) and toddlers (aged
12 months and older) by cross-checking against age
recommendations provided by manufacturers on the front-of-pack.
Products were also classified into distinct product categories, as
defined by the WHO Nutrient and Promotion Profile Model (NPPM)
(dry cereals; dairy; fruit puree; vegetable puree; savoury meal; snacks
& finger food, confectionary).20
Data analysis
A coding framework based on a validated tool for evaluating the
presence, type, and power of child-appealing marketing techniques
on product packaging developed by Mulligan et al.21 was used to
undertake content analysis of front-of-pack images and text-based
marketing messages. This coding framework was chosen as it makes
the distinction between child-appealing (core marketing
techniques) and broad marketing techniques. Core marketing
techniques include child-appealing graphics, cartoons, and branded
or licenced characters, toys, or prizes. Broad marketing techniques
include those that, on their own, do not necessarily appeal to
children but are likely to appeal to caregivers (e.g., health and
nutrition claims) and, when combined with core marketing
techniques may increase the overall power of marketing
messages.21
The original coding framework included 28 clearly defined and
mutually exclusive marketing techniques comprising 18 core and 10
broad techniques.21 We adapted the coding framework to expand
one category of broad marketing ‘appeals to health or nutrition’ into
10 sub-categories to examine the nature of health-related marketing
techniques in greater detail (Tables 1 and 2).
Using this framework, two authors coded in duplicate the front-of-
pack marketing techniques on a subset of 10% of products. Given the
high degree of consistency with coding (85%), one author coded the
remaining images. Throughout the coding process, the authors
conferred to agree on best fit as necessary. Each marketing technique
identified on the front-of-pack was counted only once and allocated
to a single code.
Results
A total of 230 products comprising 188 infant foods and 42 toddler
foods were analysed (Table 3). Infant foods predominantly comprised
savoury meals (36.17%), fruit purees (33.51%), and snacks (21.21%).
Toddler foods included snacks (50%), fruit purees (19.05%), and
confectionary (21.43%) (fruit bars and yogurt buttons were classified
as confectionary under the WHO NPPM definition due to high sugar
content20). The mean number of front-of-pack marketing techniques
observed on infant foods was 8.65 per product (range 5–15) and the
mean number of front-of-pack marketing techniques on toddler foods
was 9.24 (range 6–16).
 FRONT-OF-PACK MARKETING ON INFANT AND TODDLER FOOD 3

Table 1: Coding framework with examples of core marketing techniques. Table 3: Number and proportion of infant and toddler food products in each
Core marketing techniques Examples product category.
1 Child-appealing visual/graphic design of package Rainbow packaging Product Category Infant foods (n ¼ 188) Toddler foods (n ¼ 42)
2 Unconventional shape of the product, Animal shaped biscuits Dry cereal 8 (4.25%) 0
featured on the package Dairy 10 (5.32%) 0
3 Unconventional flavour of the product, Chocolate mud flavour Fruit puree 63 (33.51%) 8 (19.05%)
featured on the package Vegetable puree 0 0
4 Unconventional colour of the product, Purple crackers Savoury meal 68 (36.17%) 4 (9.52%)
featured on the package
Snacks & finger food 38 (20.21%) 21 (50%)
5 Games or activities on the package Connect the dots, mazes
Confectionary 1 (0.53%) 9 (21.43%)
6 Presence of branded characters Tony the Tiger
7 Presence of licenced characters Peppa Pig, Bluey
8 Presence of celebrities Images of actors, athletes
Core marketing
9 Other characters or cartoons Animal cartoons or fictional sports
players The presence of one or more core marketing techniques was
10 Other child-appealing tie-ins Movie, TV, or character features observed on 87% of products within the sample. The mean number of
11 Presence of children/parents/families Children or families on pack, either unique core marketing techniques observed was 1.73 (range 0–4) on
real or cartoon infant foods and 2.64 (range 0 to 6) on toddler foods. The most
12 Toys or prizes Toys or prizes inside the package or frequently observed core marketing techniques included child-
to be redeemed later appealing graphics (55%), children’s product lines (53%), and images
13 Coupons, contests, or giveaways, specifically Coupons inside the package or to of children or families (37%) (Table 4).
appealing to children be redeemed later
14 Children’s product lines featured Mention of ‘mini’ ‘junior’ ‘for small
on the package hands’
Broad marketing
15 Appeals to fun Have fun with... Broad marketing techniques were observed on the front-of-pack of all
16 Appeals to coolness or novelty Try me, new infant and toddler food products examined. The mean number of
17 Recipes, specifically appealing to children Honey joys, chocolate crackles unique broad marketing techniques observed was 6.92 (range 4–10)
18 Promotion of websites, social media, rewards Find more at [website]
programs, specifically appealing to children
Table 4: Frequency of core and broad marketing techniques.
Core marketing techniques Infant foods Toddler foods
Table 2: Coding framework with examples of broad marketing techniques. Child-appealing visual/graphic design of package 102 (54%) 25 (60%)
Children’s product lines featured on the package 88 (47%) 34 (81%)
Broad marketing techniques Examples
Presence of children/parents/families 78 (41%) 8 (19%)
1 Interesting or unconventional product name Fruity hoops, noughts and crosses
Appeals to fun 22 (11%) 15 (35%)
2 Interesting font or lettering Bubble or chalkboard lettering
Presence of branded characters 21 (11%) 11 (26%)
3 Presence of a logo, not specifically Product or brand logo
appealing to children Unconventional shape of the product, 5 (3%) 13 (31%)
features on the package
4 Convenient packaging Squeeze pouch, individually packaged
servings Unconventional colour of the product, 3 (2%) 4 (10%)
featured on the package
5 Appeals to taste or texture Tastes great! Crunchy, smooth
Appeals to coolness or novelty 6 (3%) 1 (2%)
6 Appeals to health or nutrition Appeals to health or nutritional quality
of the product Broad marketing techniques
Appeals to health or nutrition 188 (100%) 42 (100%)
6a Visual of healthy food on the package Image of fruit/vegetable/grain
Visual of healthy food on the package 186 (99%) 35 (83%)
6b Nutrition content claim Contains fibre, iron-enriched, no added
sugar, dairy-free Nutrition content claim 185 (98%) 36 (86%)
6c Organic claim organic Organic claim 93 (49%) 26 (62%)
6d Natural claim no artificial colours, flavours, Natural/no artificial colours, flavours, 95 (51%) 22 (52%)
preservatives preservatives claim
6e Made with claim Made with real fruit, made with whole Made with claim 59 (21%) 25 (60%)
grains Made in Australia claim 60 (32%) 1 (2%)
6f Made in Australia claim Made in Australia Quality claim 22 (12%) 5 (12%)
6g Quality claim Full of good stuff, premium, goodness Plant-based claim 9 (5%) 2 (5%)
6h Plant-based claim Plant-powered protein Preparation claim 1 (1%) 5 (12%)
6i Preparation claim Freeze-dried Convenient packaging 171 (91%) 32 (76%)
6j Health claim For strong bones Appeals to taste or texture 153 (81%) 21 (50%)
7 Appeals to other product benefits Quick and easy, ready to serve Presence of a logo, not specifically 131 (70%) 18 (43%)
8 Recipes, not specifically appealing to children Recipes on or inside pack appealing to children
9 Coupons, contests, or giveaways, not specifically Coupons on or inside pack, or to be Interesting font or lettering 77 (41%) 12 (29%)
appealing to children redeemed later Appeals to other product benefits 30 (16%) 19 (45%)
10 Promotion of websites, social media, rewards Find more at [website] Interesting or unconventional product name 22 (15%) 18 (43%)
programs, not specifically appealing to children Recipes, not specifically appealing to children 1 (1%) 0
4 Full Length Article
on infant foods, and 6.59 (range 6 to 10) on toddler foods. All
products (100%) featured one or more appeals to health or nutrition.
Specifically, these health or nutrition claims included images of
healthy food on the package (96%), nutrition content claims (58%),
organic claims (52%), and natural claims (51%).
Other frequently observed broad marketing techniques included
convenient packaging (85%) and appeals to taste or texture (75%)
(Table 2). Convenient packaging included products sold in pouches
with spouts (47.8%), single-serve jars (2.6%), bowls (3%), single-serve
packets of infant and toddler snack foods (30.87%), and individually
wrapped infant and toddler snacks (3.91%). Of products sold in
pouches, 73% were labelled as suitable for infants (from 4–12 months)
and 27% were labelled as suitable for toddlers (12 months and older).
Texture-related comments were commonly included alongside
statements indicating the minimum age from which the product is
suitable and included statements such as ‘smooth puree’, ‘creamy
smooth’, and ‘soft chunks for adventurous eaters’.
Discussion
This analysis of front-of-pack marketing techniques on a sample of
230 infant and toddler food products revealed that children’s food
packages are saturated with marketing techniques. Most food
packages analysed in this study included marketing techniques that
appeal to children. All food packages included marketing techniques
that appeal to caregivers, most commonly claims related to health
and nutrition. This suggests that parents and caregivers are the
primary target of much of the marketing on infant and toddler foods.
Whilst this is a new finding, it is unsurprising given caregivers are the
primary decision-maker when it comes to preschool-aged children’s
food choices.22
Health and nutrition are key factors motivating caregivers’ food
choices for their children.23,24 We observed marketing strategies
appealing to health and nutrition such as images of healthy
ingredients, claims promoting positive product features (e.g., iron,
fibre, organic), and claims highlighting an absence of unhealthy
ingredients (e.g., sugar, salt, additives, and preservatives). We also
observed claims that align with trends in the adult health market (e.g.,
plant-based, made with prebiotics, gut-loving goodness), but do not
align with dietary advice for infants and toddlers. This kind of
marketing is used to appeal to parents by creating the impression
that products are good for children,25 and can even be influential
when present on unhealthy food products.26 These claims are used
despite other research demonstrating that baby and toddler foods
often fail to meet nutritional recommendations, and commonly
contain added sugar in the form of free sugars such as cane sugar,
fruit purees, and fruit concentrates19
Alongside health, convenience is a factor that motivates parents’
decisions when it comes to feeding their children.27 We found that
convenient packaging was a common feature of infant and toddler
food products both in terms of actual packaging such as squeeze
pouches and single-serve packets, and the promotion of convenience
in front-of-pack messaging. We also observed marketing claims
relating to product taste and texture, and benefits for child
development (encourages self-feeding), in direct contrast to expert
concerns about feeding difficulties and delayed development of
eating skills associated with pureed foods and squeeze pouches.28
Reliance on squeeze pouches can interfere with children’s oral-motor
development and result in delayed introduction of age-appropriate
complementary foods.29 The typically sweet flavour profile of infant
and toddler foods sold in pouches can encourage a preference for
sweet foods, leading to longer-term dental and health implications
associated with diets high in free sugars.29 Improved labelling on
infant and toddler foods including squeeze pouches, combined with
regulation of front-of-pack marketing claims is required to support
the development of healthy eating behaviours in early childhood.
Although infant formula is regulated under strict product formulation
and marketing legislation,30 and some regulations apply to infant
foods up to 12 months of age,31 foods for toddlers are not regulated
in the same way. Claims relating to the presence of specific vitamins
and minerals are regulated by Food Standards Australian and New
Zealand (FSANZ), while marketing strategies related to convenience
and taste, particular ingredients (contains prebiotics, preservative-
free), and the use of terms such as ‘goodness’ or ’natural’ are all
unregulated and used at the discretion of manufacturers.32 This
marketing undermines parents’ intentions to choose healthy options
for their children.23 Without adequate regulation, these front-of-pack
marketing claims impede the development of optimal child feeding
practices and adequate infant and toddler nutrition.
The sheer volume of marketing techniques observed on the infant
and toddler products included in our analysis amplifies the overall
power and impact of front-of-pack marketing,21 and the combination
of various marketing techniques increases the likelihood that a
product will appeal to a range of audiences. Visual and written
marketing techniques are often combined on children’s food
products to capture the attention of different consumers and appeal
to a range of food-related goals.33 The use of multiple front-of-pack
marketing techniques is not unique to children’s food. Examination of
marketing strategies on beverage packaging found that multiple
strategies were used, often combining nutrition and health appeals
alongside child-directed characters, appeals to emotion and fun, or
other product features.34
Our findings highlight the importance of considering all forms of
front-of-pack marketing on infant and toddler foods for monitoring
and when designing food marketing controls. Several countries
around the world including Chile and Mexico, have introduced
legislative measures that ban child-directed appeals on unhealthy
food packaging.35,36 Other countries have introduced legal
measures that aim to limit children’s exposure to unhealthy food
marketing.37,38 The policy objective to reduce children’s exposure to
unhealthy food marketing, rather than only restricting child-directed
appeals, is a major advancement in recommendations for the
design of food marketing controls in recent years.39,40 Our research
show caregivers are also targeted by marketing on infant and
toddler food products. Our finding underscores the need for
regulation that also restricts marketing that appeals to caregivers.
This is necessary to protect against all forms of marketing that
impact children’s diets and builds upon WHO recommendations for
legislative measures that restrict all marketing that children are
exposed to, regardless of whether the marketing content is
intended for them or not.41 To continue to build appropriate
evidence to support this policy objective, future research should
seek to better understand the ways in which broad marketing
techniques appeal to caregivers and how these marketing
techniques influence caregivers’ decisions.
 FRONT-OF-PACK MARKETING ON INFANT AND TODDLER FOOD
The methods used in this study demonstrate the utility of an
automated data collection approach to collect images of food and
drink packaging from online sources to enable monitoring of
processed food industry marketing practices. Routine application of
these methods will enable monitoring of marketing trends over time
to build the case for policy reform to protect children’s diets from all
forms of front-of-pack marketing and to monitor regulatory
compliance where policies are already in place.
Limitations
This study examined marketing techniques on the front of infant and
toddler food packages and did not capture additional marketing on
the side or back of packages. Whilst the side and back panels typically
include nutrition information panel and ingredient list, they can also
include additional marketing techniques. However, evidence suggests
the front-of-pack is a key focus for food manufacturers. Analysis of
marketing trends on children’s food packages in Canada revealed that
between 2009 and 2017 the number of products with any front-of-
pack nutrition claim increased from 31.4% to 86.6% while back- or
side-of-pack claims did not differ significantly.42
Data for this study were collected from two major supermarkets that
collectively hold 65% of Australia’s total grocery market.7 As we
were testing a novel method for monitoring that relied on the use of
online data, it was not possible to include products available in
grocery chains that do not offer an online option. Whilst the sample
examined in this study does not include all infant and toddler food
products on the Australian market, it provides a strong indication of
the marketing practices to which young children and their
caregivers are exposed.
Policy recommendations
To adequately protect children’s diets from the harmful influences of
food marketing, and promote development of optimal feeding
behaviours, comprehensive government-led food marketing controls
are required. The scope of these controls must include all unhealthy
food marketing that children are exposed to and all food marketing
intended to influence children’s dietary consumption of unhealthy
foods. In the context of infant and toddler foods, this includes
regulation of all front-of-pack marketing directed to children and
caregivers.
Conclusion
The findings of this study reveal that infant and toddler food
packages in Australia are saturated with promotional marketing,
predominatnly targeting caregivers. These findings provide
important technical details that can inform the design of food
marketing controls that protect children’s diets from the harmful
impacts of food marketing. We argue that the premise of food
marketing controls should be to protect children's diets from the
influence of all forms of harmful marketing, regardless of whether
the marketing content is intended for them or not. In the context of
marketing on infant and toddler food packages, this includes
regulation of all front-of-pack marketing techniques that target
children and caregivers.
5
Financial Support
AC is the recipient of a Victorian Health Promotion Foundation
(VicHealth) Postdoctoral Research Fellowship. VicHealth had no role in
the design, analysis or writing of this article.
Authorship
AC conceptualised the study, designed the methods, conducted the
analysis and wrote the original draft of this article. JM contributed to
analysis and writing (review and editing). HS provided supervision
and contributed to writing (review and editing). KB provided access to
data and contributed to study design and writing (review and
editing).
Conflicts of interest
The authors declare the following financial interests/personal
relationships which may be considered as potential competing
interests: Alexandra Chung reports financial support was provided by
Victorian Health Promotion Foundation (VicHealth).
Author ORCIDs
Alexandra Chung https://orcid.org/0000-0001-7121-9534
Judith Myers https://orcid.org/0000-0002-4839-6249
Helen Skouteris https://orcid.org/0000-0001-9959-5750
Kathryn Backholer https://orcid.org/0000-0002-3323-575X
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