Category: Faculty in the News

Susan Fournier on a New Science of Negative Brand Relationships

April 26th, 2013 in Emerging Research, Faculty, Faculty in the News, Marketing, News

From “Relating Badly to Brands,” appearing in the April 2013 Journal of Consumer Psychology

Brand managers may dream of customers relating to their brands as committed partners, best friends, soul mates, or allies, but what if a brand portfolio offers rocky marriages, one-night-stands, power plays, stalkers, and secret affairs?

How, for example, should the New York Philharmonic react to recent news that a large percentage of first-time ticket buyers felt “stalked” by their customer service calls? What about  frequent flyers’ mixed—and often negative—emotions about their airline of “choice”?

We recognize negative relationships with other people and appreciate how complex and powerful they can be. So why not in our bonds with brands?

A recent study by Boston University School of Management professor Susan Fournier and doctoral candidate Claudio Alvarez “Relating Badly to Brands” (Journal of Consumer Psychology, April 2013) calls for a new science of negative brand relationships, a field overlooked by much current research. Fournier is a professor of marketing and has been named one of academia’s most influential researchers for her work on brand theory.

Alerting brand managers to the importance of the negative

Fournier and Alvarez note that although negative brand relationships are more common and frequently more powerful, positive brand relationships are supported by much richer academic frameworks.  ”Negative brand relationships are in fact more common than positive relationships,” they write, “with an average split across categories of 55%/45% for negative and positive relationships, respectively….Without a formal accounting of negative relationships, our brand management frameworks are misleading and incomplete.”

Applying new data to a marketing theory by Park et al. called the “Attachment-Aversion continuum,” Fournier and Alvarez conduct two studies using subjects across four countries to identify the range of relationships people have with a variety of brands. They first identify four dimensions along which brand relationships vary: positive/negative, significant/superficial, equal/unequal power, and deliberate/not under my control. They then have consumers assign brands to categories resembling their own primary personal relationship dynamics.The results highlight 27 significant types of consumer-brand relationships, including “flings,” “broken engagements,” “stalker-prey,” “addict/dealer,” “fleeting acquaintance,” and more.

Are we really distant from all the “bad” brands in our lives?

One important finding from these studies is the challenging of the assumption that brand negativity stems from perceived distance between consumer and product. Building on their comparison between brands and interpersonal dynamics, the authors argue, “negative relationships do not all involve distanced self-connections and low interdependence between partners.” For instance, the authors point to past studies exploring the following brand relationships, encompassing both the passionate (or close) and the negative:

  • The ”monstrous relationships” fans have with the Twilight media brand, which justifies partner violence and emotional abuse as an ultimate act of protection and love
  • Products that generate compulsive consumption, addictions, and dependencies, from alcohol to cigarettes to social media
  • Credit card and consumer lending agencies, including ones where “consumers are lured into lending relationships with a courteous attitude and quick, easy credit offered under conditions that are not fully disclosed”

As negative brand relationships are common and cause damage to both consumers and companies, Fournier and Alvarez urge, “managing negatives may actually be more important for brand equity development than cultivating positive connections with brands.”

Read more about “Relating Badly to Brands” in the Journal of Consumer Psychology.

Professor N. Kulatilaka: Turning Green into Green

April 12th, 2013 in Emerging Research, Energy & Environment Sector, Faculty in the News, Finance, News, Social Impact

The annual magazine Research at Boston University has profiled the pioneering work and social impact of the School of Management’s Nalin Kulatilaka. In their feature “Considering Community,” they write,

Perhaps it is no wonder that an electrical engineer who became a professor of finance would take an interest in how green buildings can provide monetary benefits for the people who have the resources to fund renewable energy projects….

That’s part of the story of Nalin Kulatilaka, who teaches in the School of Management and is a codirector of the Clean Energy & Environmental Sustainability Initiative.

“My research is on sustainable energy investments,” Kulatilaka says. “From renewable energy sources like solar and wind to energy conservation and energy efficiency investments like building retrofits.”

The thrust of his work is to incentivize the up-front funding for green energy buildings from banks and other sources by writing a new kind of contract for the loans that fuel such changes. The contracts are intended to monetize the savings that green energy can achieve, so that the investors who put up the capital can capture some of the money saved as revenue from the project.

“We are now designing contracts where the building owner and tenant could share the savings.”

Recently, Kulatilaka has worked on buildings owned by the Cambridge Housing Authority in Central Square. Some were heated entirely by electricity, some were particularly leaky, and all lacked the investment capital needed for retrofits.

“My contribution there, with Professor of Earth & Environment Robert Kaufmann and a team of students, was to first assess the opportunity; to try to quantify what the savings would be by using various statistical techniques that analyze the demand patterns of the building,” he says.

“We are now designing contracts where the building owner and the tenant could share the savings. These would occur in such a way that funding could be attracted from conventional—or at least semi-­conventional—sources like large banks.”

Read the full article at Research at Boston University, or see another profile of Professor Kulatilaka’s work on “New Approaches to Funding Social Enterprises.”

Washington Post’s Wonkblog Spotlights Keith Ericson on Obamacare, Enrollment, and Labels

April 4th, 2013 in Faculty, Faculty in the News, Health Sector, Markets, Public Policy & Law, News

“It’s a mandate! It’s a tax! How word choice effects Obamacare enrollment.”

Keith Marzilli EricsonThe Washington Post‘s Wonkblog, in their Health Reform Watch column, recently spotlighted a study co-authored by Boston University’s Keith Marzilli Ericson on the impact of terminology on enrollment in mandated health insurance. Ericson, an assistant professor of markets, public policy, and law at the School of Management, is also co-author of a related National Bureau of Economic Research paper titled “Pricing Regulation and Imperfect Competition on the Massachusetts Health Insurance Exchange.”

As The Washington Post reports,

It was this week, one year ago, that the Affordable Care Act had its day in court—the Supreme Court, that is.

The health care law had the longest oral arguments of any case the high court has heard; supporters lined up for a seat in the courthouse four days in advance.

Obamacare’s mandated purchase of health coverage survived the challenge. It may not, however, have gotten off scot free: New research suggests the controversy over the mandate may been a blow to its credibility—and Americans’ willingness to comply.

That’s the takeaway from a new paper, authored by Boston University’s Keith Marzilli Ericson and University of Pennsylvania’s Judd Kessler that looks at the difference between describing the health law’s penalty for not carrying insurance as a “mandate” or a “tax.”

The two are, as Ericson describes it, “logically identical.” Beginning in 2014, a person who fails to purchase health insurance will pay a $95 fine, regardless of whether they consider that a tax penalty or a fee for non-compliance with the mandate.

Ericson, whose research focuses on the intersection of health insurance and behavioral economics, had an inkling that the description would matter. He has researched the Massachusetts health reform effort, where a mandate helped the state achieve the highest rate of insurance in the country.

“We expected that the mandate would encourage insurance purchase more than a tax,” he says. “We thought that it establishes a social norm, and a sense of obligation.”

Read the full article at The Washington Post‘s Wonkblog.

Banner photo courtesy of flickr user DigiDreamGrafix.com

Faculty in the News: March 8, 2013

March 11th, 2013 in Faculty, Faculty in the News, News

SMG experts on money laundering, Toyota management changes, Apple, and banking

SMG_newsBoston University Public Relations’ Professor Voices blog features a sampling of quotes by experts from BU’s School of Management on recent issues impacting the business world:

Lawmakers rip into regulators over money-laundering prosecution (Washington Post): “The level of this money laundering and the fact it’s gone on for so long meant that regulators have been asleep.” Mark Williams

Wall St. will keep close iWatch on Apple product (Boston Herald): “It is clear that Apple needs to create a new category and do it soon. A watch is easier to launch than a TV. It’s easier to produce since it is a variation on the iPod mini and the iPhone, and uses the same app structure and Siri plus Bluetooth integration. Moreover, it has global appeal and can rekindle Apple’s cool factor.” N. Venkat Venkatraman

Toyota hires outsiders to help with global growth (AFP): “Toyota’s leadership changes portend a new era. New directors, drawn from beyond Japan’s shores, will help develop a truly global view at the top.”  James Post

If the Catholic Church were a business, how would you fix it? (NPR All Things Considered“): “Without systematic accounting and disclosure, there is enough doubt these days about how money is being managed that we don’t know  whether the hungry are being fed, the naked are being clothed and those in need are getting health care and education.”  James Post

Apple’s cash drama is far from over (MarketWatch): “It’s the real human drama here, and it certainly is a corporate drama. This sort of has it all, an iconic company which has been doing extraordinarily well and has buckets of cash, billions of buckets of cash. [Apple CEO] Tim Cook and the board are the ones in the hot seat here. They have to make a decision about distribution or no distribution and they have to have some compelling explanation for whatever they choose.” James Post

Mayo, a financial powerhouse, is poised to propel expansion (Minnesota Public Radio): “From a profitability standpoint they are successful. I don’t doubt people will step forward and write large checks. In a 20-year period, they should be able to successfully put together a package of financing and donations that’ll allow them to do this.” Elizabeth Keating

No longer unsung, Samsung turns up heat on Apple (Boston Herald): “I think 2013 is a watershed year for Apple. Will it lose to Google-Samsung dominance … or will it show true innovation with the phone and its strong ecosystem?” N. Venkat Venkatraman

Is the banking system healthy? (Washington Post): “Investors expect more losses ahead. Many of these banks still have loans that could go bad if the economy goes south.” Mark Williams

Deferred pay draws Fed’s scrutiny (Wall Street Journal): “The lack of data on deferred compensation has benefited top-paid U.S. bankers and disadvantaged otherwise concerned shareholders.” Mark Williams

Behind the mega airlines merger (NECN): “They need each other. American Airlines is in bankruptcy and US Air is a smaller competitor on the East coast and in other places and it’s getting dominated by other big competitors that are out there. They just need each other.” Allen Michel

How governments spur private-sector demand for green buildings (Forbes): “Input suppliers such as game developers won’t invest until there is sufficient demand, or a large installed base, but demand won’t arise until there is an ample supply of key inputs. In our setting, government green-building procurement policies can stimulate private-sector building professionals to gain expertise in LEED, while also bolstering private-sector demand for LEED buildings.” Timothy Simcoe

There could be something wrong with 42 million credit reports (Business Insider): “Most people do not realize how many prices are affected by their credit scores.  Even what you pay for car insurance depends on it. The FTC report seems to suggest that the rate of serious error is only about 5%, but that is enough to make it worth checking whether the information the credit reporting agencies have on you is correct.”Michael Salinger

The biggest financial asset in your portfolio is you (New York Times): “I see myself, for example, as a convertible bond. I’m protected by tenure at a solid university and have the potential to do extra things for income. I have a lot more capacity to take risk in my portfolio than I choose to use. I’m risk-averse, don’t like to gamble and don’t get a kick out of winning. I hate to lose.” Zvi Bodie

Fatigued users fall away from Facebook (TechNewsWorld): “It is inevitable that people will feel tired after an initial euphoria. Even if people spend less time but they find that time to be useful and valuable, Facebook can monetize it. Otherwise, it is a troubling sign.” N. Venkat Venkatraman

Does an ‘A’ in ethics have any value (Wall Street Journal): “We need to hit the students hard when they first get here, remind them of these principles throughout their core classes, and hit them once again before they leave.” Kabrina Chang

Creating the ‘innovative mindset’ (Telegram & Gazette): “I don’t think is something as concrete as gravity. If you are in a public trade organization you have to guaranty innovation every year, all the time.” Susan Fournier

Explore our website to learn more about faculty news & honors, or visit Public Relations’ website to see more commentary from BU faculty.

Dean Freeman Named a Top 100 CEO by HBR

January 22nd, 2013 in Dean Freeman, Faculty in the News, News, School

Freeman served as CEO of Quest Diagnostics from 1996-2004

Many business leaders are criticized for fixating on short-term goals at the expense of long-term performance. So which global CEOs actually delivered solid results over the long run? The 2013 Harvard Business Review‘s CEO Scorecard provided an objective answer to this question, and named Allen Questrom Professor and Dean Kenneth W. Freeman the 76th best-performing CEO in the world.

Dean Freeman served as Chief Executive Officer of Quest Diagnostics Incorporated from 1996-2004. He also appeared on HBR‘s first CEO Scorecard in 2010, where he was ranked 67th in the world. This year, the pool of CEOs studied increased by roughly one-third, from 1,999 in 2010 to 3,143 this year, due to the inclusion of additional emerging-market indexes.

According to Harvard Business Review, the goal of the CEO Scorecard is to shine a spotlight on the CEOs worldwide who created long-term value for their companies, and to give executives critical benchmarks they could aim for. The top 100 CEOs on the list performed exceptionally well, delivering on average a total shareholder return of 1,385% during their tenures and increasing their firms’ market value by $40.2 billion.

HBR‘s 2013 CEO Scorecard assesses the long-term performance of each CEO, from the first day on the job to the last, by looking at how much total shareholder returns changed over that time period (adjusting for country and industry effects). While Dean Freeman served as CEO of Quest Diagnostics, the leading provider of medical diagnostic testing services, total shareholder return was 1,014% (country adjusted), or 1,102% (industry adjusted).

During his tenure at Quest Diagnostics, Dean Freeman executed a dramatic financial turnaround by establishing industry leadership, effecting expansion through acquisition, and driving organic growth. Quest Diagnostics provided the third highest five-year shareholder returns among the Fortune 500 (1999-2003), and in 2004 was named to the Bloomberg Businessweek 50. The company’s market capitalization increased from approximately $350 million at the time of its spinoff from predecessor company Corning Clinical Laboratories in 1996 to more than $9 billion. Read more about Dean Freeman’s professional background.

The list’s top 5 CEOs are Steve Jobs (Apple), Jeffrey P. Bezos (Amazon.com), Yun Jong-Yong (Samsung Electronics), Roger Agnelli (Vale), and John C. Martin (Gilead Sciences). See the complete list on HBR.org.

Barbara Bickart Explores Eco-Seals’ Impact on Consumers

December 19th, 2012 in Emerging Research, Faculty in the News, Marketing, News

New Study Uncovers Green Eco-Seals’ Opposing Impact on Different Consumer Types

Researchers Barbara Bickart and Julie Ruth have completed a study filling a crucial gap in advertisers’ knowledge about the efficacy of green marketing techniques such as eco-seals, showing that they have a distinctly different impact—and in fact sometimes opposing effects—on different types of consumers.

Bickart and Ruth are associate professors in marketing at Boston University School of Management and Rutgers University, respectively. Their new study, “Green Eco-seals and Advertising Persuasion,” is forthcoming in the Journal of Advertising‘s special issue on green advertising.

Bickart and Ruth focus on the differing persuasiveness of eco-seals for consumers with high versus low concern about environmental issues, as well as with high versus low familiarity with a brand. They also offer insight into how these different consumers react depending on an eco-seal’s source and the type of specific messaging it provides.

Among their findings:

  • When consumers have a low-level of environmental concern, the presence or absence of an eco-seal on a package has limited impact on purchase intentions, regardless of familiarity with the brand, although;
  • When consumers have a low-level of environmental concern, the absence of a seal leads them to evaluate the familiar brand more favorably than the unfamiliar brand.
  • When a consumer has a high-level of environmental concern, eco-seals in general generate more favorable purchase intentions for familiar brands, although eco-seals with an ambiguous source generate less favorable purchase intentions for unfamiliar brands, and perhaps most surprising;
  • High-concern consumers are more likely to respond favorably to eco-seals generated by the manufacturer, as opposed to an independent source such as the government, suggesting that familiar-brand seals boost these consumers’ beliefs about a company’s concern for the environment.

As a whole, the study data points to numerous specific strategies for marketers and  policy makers about the most effective use of eco-seals and message strategies for various easily-identifiable target audiences.

See a recent profile of this research at the Wall Street Journal blog, “Corporate Intelligence.”

Banner photo courtesy of flickr user Pylon757.

Wall Street Journal Names Zvi Bodie’s New Book a Top Pick for Investors

December 18th, 2012 in Faculty in the News, Finance, News

Risk Less and ProsperIn their recent article “Financial Literacy 101,” offering experts’ top recommendations for novice investors, The Wall Street Journal spotlighted Risk Less and Prosper by Boston University’s Zvi Bodie, the Norman and Adele Barron Professor of Management, and co-author Rachelle Taqqu:

With its focus on goal-based investing, this book offers concrete steps to help beginning investors detail their specific needs and wants for the future, and to invest based on those goals.

Zvi Bodie, a management professor at Boston University, advises investors to take on risk only with money they can afford to lose. For the rest, he recommends specific inflation-indexed government bonds.

“Stocks can be a winning strategy, but they can also bring tragedy, and Bodie carefully sets out the risks and rewards of the alternatives,” says Dallas Salisbury, chief executive of the Employee Benefit Research Institute, a nonprofit think tank.

See the full article “Financial Literacy 101″ at The Wall Street Journal online.

Professor Venkatraman on How Indian IT Can Achieve Global Recognition

December 7th, 2012 in Digital Technology Sector, Faculty, Faculty in the News, Global Work, Honors & Awards, Information Systems, News

“‘Guru’ of Guru Speak Decodes 5 Game-Changing Trends for t2”

In a profile featured in Times of India, David J. McGrath, Jr. Professor in Management N. Venkatraman presented his new framework to analyze the impact of IT on business performance. His model, referred to as The Venkatraman Framework, encompasses the so-called the “five webs” and offers a vision for the future of IT and Globalization 3.0.

Professor Venkatraman also discussed these topics during his talk in February at Guru Speak 2013, an annual advanced knowledge workshop organized by the IIM Calcutta Alumni Association and The Telegraph, who dubbed him “the ‘guru’ of Guru Speak.”

Excerpts from Times of India:

Professor Venkat N. Venkatraman’s interests lie at the point where strategic management and information technology intersect. The Boston University professor, who was recently recognized as the 22nd most cited scholar in management over the past 25 years, has created a new framework to analyse the impact of IT on business performance, referred to as the Venkatraman Framework.

“[The Venkatraman Framework] is about different aspects of how IT shapes and evolves business models. In the 1980s, I focused on how IT impacts internal processes. That was during the period where most companies saw IT as driving business efficiency. Then, in the 1990s, I focused on how IT allows firms to connect externally with suppliers and customers and change business scope. Then, IT became more strategic and CEOs began to take interest in how IT could become a strategic driver.

“As the Internet became more central and important in the early 21st century, I started focusing on the role of the web. Right now, my framework is focused on what I call five webs: mobile web, social web, media web, real-time web and machine web. These are not separate webs but are interconnected. They impact companies all over the world-although their effects may be different. I believe these webs taken together lay the foundation for the emerging digitally connected business infrastructure that could alter the basis of competition in the coming decade.”

Excerpts from The Telegraph (Calcutta):

Will BB10 be happy with fourth place? Will Bring Your Own Device become popular in India? Management strategy expert Venkat N. Venkatraman, professor in management at Boston University’s School of Management, has the answers [offered below]….

Samsung vs Apple

Both are focused on design and user experience. The key difference is software. Apple iOS is not yet big in India (despite the popularity of iTunes and iPods)….Google is well positioned in India and Samsung is positioned with TVs (and appliances). So, the combination of Google plus Samsung is unbeatable in India….

Blackberry 10

Just as IBM felt secure with their mainframe architecture, RIM (Blackberry) felt secure in the belief that they defined the enterprise mobile worker market with their mobile phones. The advent of two new entrants from outside the traditional industry boundaries –– Apple and Google –– has seriously challenged Blackberry and upset the industry equilibrium…The mobile game is now a two-horse race with Apple and Google. The jockeying for the third place is between Microsoft (Nokia) and BB….

Social media network

…I expect that more businesses in India will embrace social media more formally and aggressively as part of the marketing campaigns. Companies such as Facebook and Twitter should seek to find examples of application of social media in India that have broader applicability….

Read more coverage of The Venkatraman Framework and the professor’s talk at Guru Speak from the Business Standard (India)

Faculty in the News: July 12, 2012

July 17th, 2012 in Faculty, Faculty in the News, Health Sector, News

BU experts on CEOs, Affordable Care Act, and banks

SMG_newsBoston University Public Relations’ Professor Voices blog features a sampling of quotes by experts from BU’s School of Management on recent issues impacting the business world:

“CEOs are not hired to take blame. The board wants a CEO who is going to proclaim victory, or better, achieve it.” (P&G to Philip Morris Blame Currency for Forecast CutsBloomberg)
James Post

“The new CEO needs to be separated from the bonus culture that is a cancer on the industry. A fixed salary with some long-term performance shares makes good sense for now.” (Diamond Antithesis Seen As Key Step To Repairing BarclaysBloomberg)
James Post

“In the wake of the Supreme Court decision establishing the constitutionality of the Affordable Care Act, many Republicans are focusing their opposition on states’ rights.” (No Letup in the Health-Law DebateNew York Times)
Stephen Davidson

“Banks can only be as strong or weak as the economy.” (As Economy Steadies, Bank Closings Become RarerAssociated Press)
Mark Williams

See more commentary from faculty on the Public Relations blog:

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Faculty in the News: July 5, 2012

July 9th, 2012 in Faculty, Faculty in the News, Finance, Health Sector, News, Operations & Technology Management

BU experts on Obamacare, too-big-to fail banks, Airbus, and gold prices

SMG_newsBoston University Public Relations’ Professor Voices blog features a sampling of quotes by experts from BU’s School of Management on recent issues impacting the business world:

“It may be good politics in the short run in some states, but it is lousy public policy no matter how you slice it.” (GOP governors a backstop against Obamacare?PoliticoArena)
By Stephen Davidson

“They are an exercise while things are fine, prepared by lawyers and not representative of what might happen. It’s false hope, unfortunately.” (‘Living Wills’ for Too-Big-to-Fail Banks Are ReleasedNew York Times)
Mark Williams

“They’d like to build in Alabama for a number of reasons. They’d like to win more U.S. business; in particular, getting defense deals. They lost a big defense contract about a year and a half ago for the U.S. Air Force for tankers. Defense is a big business for any airline producer.” (Airbus to build assembly plant in AlabamaNECN)
Allen Michel

“The salad days of gold investing are gone. Gold is an asset bubble that has begun to burst. It costs approximately $500 an ounce to mine gold, but currently this metal sells for over three times that cost. Historically, the mining-to-market cost has been closer to 1.5 times.” (A Golden AgeFinancial Advisor Magazine)
Mark Williams

“The pressure will certainly come from the Democrats, and also from patient-advocacy groups and from the health and medical community, because it is taking money out of the pockets of health professionals, physicians, and health centers. Some, for ideological reasons, will not cooperate. But the real question is whether they can sustain that with the political backlash that will occur.” (States may opt out of Medicaid expansionBoston Globe)
Joseph Restuccia

See more commentary from faculty on the Public Relations blog:

Explore our website to learn more about faculty news & honors.