Direct selling (DS) is a long-standing and legal retail distribution channel whose distributors act as retail salespeople, sales managers, and personal consumers of the firm’s products. The FTC, state Attorneys General, and other plaintiffs prosecute firms they argue operate illegal pyramid schemes, which have superficial commonalities with (but are not identical to) legitimate DS firms. Confusion can therefore arise about the legality or illegality of the defendant firm’s business. One paper whose analysis and results have been used in prior pyramid scheme prosecutions (Vander Nat and Keep 2002, “VK”) develops a set of “metrics” claimed to apply to the assessment of any DS firm’s business for possible signs of pyramid scheme operation. However, the model’s analysis rests on an unwarranted assumption that distributors’ personal-consumption purchases should not be counted as consumer sales. This paper documents how the VK model fails to account for the appropriate categorization of DS distributor purchases as end-user sales. A re-analysis of the VK model with the proper analytic correction shows that VK’s proffered “metrics” are not meaningful under the standard business protections offered by a legitimate DS firm. As a result, the VK model is unreliable as a general tool in pyramid scheme determination.
{"title":"An Analysis of 'Marketing Fraud: An Approach for Differentiating Multilevel Marketing from Pyramid Schemes' Under Standard Protections Offered by Legitimate Direct Selling Firms","authors":"A. Coughlan","doi":"10.2139/ssrn.3718842","DOIUrl":"https://doi.org/10.2139/ssrn.3718842","url":null,"abstract":"Direct selling (DS) is a long-standing and legal retail distribution channel whose distributors act as retail salespeople, sales managers, and personal consumers of the firm’s products. The FTC, state Attorneys General, and other plaintiffs prosecute firms they argue operate illegal pyramid schemes, which have superficial commonalities with (but are not identical to) legitimate DS firms. Confusion can therefore arise about the legality or illegality of the defendant firm’s business. \u0000 \u0000One paper whose analysis and results have been used in prior pyramid scheme prosecutions (Vander Nat and Keep 2002, “VK”) develops a set of “metrics” claimed to apply to the assessment of any DS firm’s business for possible signs of pyramid scheme operation. However, the model’s analysis rests on an unwarranted assumption that distributors’ personal-consumption purchases should not be counted as consumer sales. \u0000 \u0000This paper documents how the VK model fails to account for the appropriate categorization of DS distributor purchases as end-user sales. A re-analysis of the VK model with the proper analytic correction shows that VK’s proffered “metrics” are not meaningful under the standard business protections offered by a legitimate DS firm. As a result, the VK model is unreliable as a general tool in pyramid scheme determination.","PeriodicalId":359342,"journal":{"name":"MKTG: Selling & Sales Management (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125848641","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Despite the sizable market for online games, research on the economics of online game operations remains nascent. In this paper, we focus on free-to-play player-versus-player games in which the game provider offers players an option to purchase game-specific virtual goods (items) before the game begins. Purchasing a virtual item can improve the player’s chance of defeating his opponent. Such practice motivates us to investigate the impact of disclosing the opponent’s skill level on in-game purchases. Analyzing a game-theoretical model that involves one game provider and two competitive players, we obtain the following results. First, when the price of the virtual goods is endogenously determined by the game provider, it is optimal for the provider to adopt “opaque selling” by concealing the opponent’s skill level information from players. However, opaque selling hurts the player’s welfare. Second, when the selling price is exogenously given, opaque selling is the dominant strategy for the provider, although the player welfare is lower, if and only if the price is low. Our results can help game providers decide whether to adopt opaque selling, and also offer a plausible explanation of why some providers adopt the opaque selling strategy.
{"title":"Opaque Selling in Player-versus-Player Games","authors":"Yifan Jiao, Christopher S. Tang, Jingqi Wang","doi":"10.2139/ssrn.3558774","DOIUrl":"https://doi.org/10.2139/ssrn.3558774","url":null,"abstract":"Despite the sizable market for online games, research on the economics of online game operations remains nascent. In this paper, we focus on free-to-play player-versus-player games in which the game provider offers players an option to purchase game-specific virtual goods (items) before the game begins. Purchasing a virtual item can improve the player’s chance of defeating his opponent. Such practice motivates us to investigate the impact of disclosing the opponent’s skill level on in-game purchases. Analyzing a game-theoretical model that involves one game provider and two competitive players, we obtain the following results. First, when the price of the virtual goods is endogenously determined by the game provider, it is optimal for the provider to adopt “opaque selling” by concealing the opponent’s skill level information from players. However, opaque selling hurts the player’s welfare. Second, when the selling price is exogenously given, opaque selling is the dominant strategy for the provider, although the player welfare is lower, if and only if the price is low. Our results can help game providers decide whether to adopt opaque selling, and also offer a plausible explanation of why some providers adopt the opaque selling strategy.","PeriodicalId":359342,"journal":{"name":"MKTG: Selling & Sales Management (Topic)","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127269664","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Many online-first retailers have adopted omnichannel strategies to expand their territories from online to offline. In this paper, we seek to understand the function of offline showroom for multi-category online retailing platforms, which is relatively understudied. Using detailed transaction-level data along with in-store product scanning information from a major online retailing platform in China that introduced its first offline showroom during the data period, we identify a positive category expansion effect for the existing customers who visit the offline showroom using difference-in-differences approach. That is, a customer tends to purchase products from new categories that otherwise not purchased in the online environment, after visiting the offline showroom. Furthermore, we find evidence that (1) in addition to the physical display of the products in the showroom, sales people working onsite contribute to half the category expansion effect; (2) the effect is not a mere frenzy of impulsive purchase, and the showroom helps to better match customer needs with products; (3) the effect is smaller among experienced customers. Practical implications are discussed.
{"title":"Beyond Showrooming: Category Expansion from Offline Stores","authors":"Shuwen Jiang, Xing Li, Qiaowei Shen","doi":"10.2139/ssrn.3533579","DOIUrl":"https://doi.org/10.2139/ssrn.3533579","url":null,"abstract":"Many online-first retailers have adopted omnichannel strategies to expand their territories from online to offline. In this paper, we seek to understand the function of offline showroom for multi-category online retailing platforms, which is relatively understudied. Using detailed transaction-level data along with in-store product scanning information from a major online retailing platform in China that introduced its first offline showroom during the data period, we identify a positive category expansion effect for the existing customers who visit the offline showroom using difference-in-differences approach. That is, a customer tends to purchase products from new categories that otherwise not purchased in the online environment, after visiting the offline showroom. Furthermore, we find evidence that (1) in addition to the physical display of the products in the showroom, sales people working onsite contribute to half the category expansion effect; (2) the effect is not a mere frenzy of impulsive purchase, and the showroom helps to better match customer needs with products; (3) the effect is smaller among experienced customers. Practical implications are discussed.","PeriodicalId":359342,"journal":{"name":"MKTG: Selling & Sales Management (Topic)","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121673453","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The importance of knowledge and skills in meeting new challenges in production and distribution is particularly evident in today’s market, which is characterized by a saturation of products and strong competition. To be successful in the market, companies must stand out and be creative and communicative. The leading factor in providing these features is the human potential, which represents both opportunities and threats to the operation and development of the companies. For companies involved in sales, especially direct sales, this factor is expressed in the specific competencies of individual employees. The importance of individual competence in direct sales is reflected in the demand for research in this field. This article presents the results of research the author conducted on a group of 455 direct sales vendors that operate in the form of direct sales known as multilevel marketing (MLM). The respondents represented three groups: group I - inexperienced sellers that are starting work; group II - sellers who reach significant sales results; and group III - the leaders that achieve the highest sales results. The article presents the results of two analyses, namely discriminant and correlation analysis. The purpose of the discriminant analysis was to identify the set of competencies that particularly distinguish each group. The analysis was performed to indicate the factors that differentiate the surveyed groups. The purpose of the correlation analysis was to identify the correlation between particular competencies in the surveyed groups. Intercorrelations between the individual competencies were analyzed. The results identified the competences that best differentiate the surveyed sellers groups and also showed that most competencies strongly correlate with one another. The results indicate that by influencing the development of one competency, another set of competencies can be developed. This is an important aspect of the development of training programs for sellers.
{"title":"Examination of the Individual Competencies that Differentiate Results in Direct Sales","authors":"Barbara Sypniewska","doi":"10.5709/ce.1897-9254.76","DOIUrl":"https://doi.org/10.5709/ce.1897-9254.76","url":null,"abstract":"The importance of knowledge and skills in meeting new challenges in production and distribution is particularly evident in today’s market, which is characterized by a saturation of products and strong competition. To be successful in the market, companies must stand out and be creative and communicative. The leading factor in providing these features is the human potential, which represents both opportunities and threats to the operation and development of the companies. For companies involved in sales, especially direct sales, this factor is expressed in the specific competencies of individual employees. The importance of individual competence in direct sales is reflected in the demand for research in this field. This article presents the results of research the author conducted on a group of 455 direct sales vendors that operate in the form of direct sales known as multilevel marketing (MLM). The respondents represented three groups: group I - inexperienced sellers that are starting work; group II - sellers who reach significant sales results; and group III - the leaders that achieve the highest sales results. The article presents the results of two analyses, namely discriminant and correlation analysis. The purpose of the discriminant analysis was to identify the set of competencies that particularly distinguish each group. The analysis was performed to indicate the factors that differentiate the surveyed groups. The purpose of the correlation analysis was to identify the correlation between particular competencies in the surveyed groups. Intercorrelations between the individual competencies were analyzed. The results identified the competences that best differentiate the surveyed sellers groups and also showed that most competencies strongly correlate with one another. The results indicate that by influencing the development of one competency, another set of competencies can be developed. This is an important aspect of the development of training programs for sellers.","PeriodicalId":359342,"journal":{"name":"MKTG: Selling & Sales Management (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131208723","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Every business enterprise touches and is touched by customers in different ways at different touchpoints – points of human, product, service, communication, spatial, and/or electronic interaction collectively constituting the interface between an enterprise and its customers. Like any good architect conceiving of and giving shape to a building or a space, a business enterprise must conceive, design, and implement the complete set of touchpoints and manage exchanges across these touchpoints with the central goal of a compelling customer experience at every touchpoint over the course of the entire customer relationship cycle. This paper addresses this central challenge in three stages. First, it makes the case for a holistic approach to the totality of customer touchpoints across all parts of the enterprise and all stages of the relationship cycle. Next, it offers a methodology for drawing up customer touchpoint blueprints. Finally, it suggests five critical requirements for compelling touchpoint architecture.
{"title":"Toward Compelling Customer Touchpoint Architecture","authors":"Anirudh Dhebar","doi":"10.2139/ssrn.2035839","DOIUrl":"https://doi.org/10.2139/ssrn.2035839","url":null,"abstract":"Every business enterprise touches and is touched by customers in different ways at different touchpoints – points of human, product, service, communication, spatial, and/or electronic interaction collectively constituting the interface between an enterprise and its customers. Like any good architect conceiving of and giving shape to a building or a space, a business enterprise must conceive, design, and implement the complete set of touchpoints and manage exchanges across these touchpoints with the central goal of a compelling customer experience at every touchpoint over the course of the entire customer relationship cycle. This paper addresses this central challenge in three stages. First, it makes the case for a holistic approach to the totality of customer touchpoints across all parts of the enterprise and all stages of the relationship cycle. Next, it offers a methodology for drawing up customer touchpoint blueprints. Finally, it suggests five critical requirements for compelling touchpoint architecture.","PeriodicalId":359342,"journal":{"name":"MKTG: Selling & Sales Management (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-04-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130902451","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2012-03-09DOI: 10.1108/10569211211204500
Dr. Aruna Kumar Panda
Purpose – The purpose of this paper is to analyze the status of gross and net working capital and their association with sales of Andhra Pradesh Paper Mills Ltd, with reference to the Indian paper industry over a decade, from 1999 to 2008. Design/methodology/approach – The research is mainly based on secondary financial data obtained from the Centre for Monitoring Indian Economy (CMIE). It focused on the size, character, and annual growth rates of gross and net working capital of the company. In addition, it analyzed the growth trends of gross and net working capital of the company in relation to sales. With the help of the Karl Pearson's correlation model, the inter-relationship between sales and working capital has been identified. Then the strength and significance of such a relationship has been tested with the use of other statistical tools such as coefficient of determination and Student's t-test. Findings – The major findings of the research showed that while there was an increase in sales positively, strongly, and significantly associated with an increase in gross working capital for both the company and the industry, its association with net working capital was negative, poorly related, weak, and insignificant for the company under study. Originality/value – There is a dearth of studies in the world literature that discuss the relationship that exists between sales and working capital in India's paper industry, in general and Andhra Pradesh Paper Mills Ltd in particular, and therefore this research is expected to add significant value to exploring the said linkage.
{"title":"The Status of Working Capital and Its Relationship with Sales: An Empirical Investigation of Andhra Pradesh Paper Mills Ltd (India)","authors":"Dr. Aruna Kumar Panda","doi":"10.1108/10569211211204500","DOIUrl":"https://doi.org/10.1108/10569211211204500","url":null,"abstract":"Purpose – The purpose of this paper is to analyze the status of gross and net working capital and their association with sales of Andhra Pradesh Paper Mills Ltd, with reference to the Indian paper industry over a decade, from 1999 to 2008. Design/methodology/approach – The research is mainly based on secondary financial data obtained from the Centre for Monitoring Indian Economy (CMIE). It focused on the size, character, and annual growth rates of gross and net working capital of the company. In addition, it analyzed the growth trends of gross and net working capital of the company in relation to sales. With the help of the Karl Pearson's correlation model, the inter-relationship between sales and working capital has been identified. Then the strength and significance of such a relationship has been tested with the use of other statistical tools such as coefficient of determination and Student's t-test. Findings – The major findings of the research showed that while there was an increase in sales positively, strongly, and significantly associated with an increase in gross working capital for both the company and the industry, its association with net working capital was negative, poorly related, weak, and insignificant for the company under study. Originality/value – There is a dearth of studies in the world literature that discuss the relationship that exists between sales and working capital in India's paper industry, in general and Andhra Pradesh Paper Mills Ltd in particular, and therefore this research is expected to add significant value to exploring the said linkage.","PeriodicalId":359342,"journal":{"name":"MKTG: Selling & Sales Management (Topic)","volume":"56 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-03-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115198717","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A. Coughlan, K. Joseph, Duane W. Myer, M. B. Wintoki
This paper is concerned with the ability of marketing investments to convey information from the “black box” of the firm to participants in the financial markets. We focus on the context of sales force resizing announcements in the pharmaceutical industry because the sales force comprises the main marketing instrument for firms in this industry. We hypothesize that sales force resizing announcements will generate a concomitant market reaction because they provide information about future demand. Moreover, we predict stronger absolute effects for “increase” announcements than for “decrease” announcements. This is because the mean-shifting and uncertainty reducing aspects of new information work in concert for increase announcements, but in opposing ways for decrease announcements. Our theory also predicts a more pronounced market reaction when investors are more uncertain about the firm’s future performance and the announcement contradicts the direction of investors’ prior beliefs. Employing an event-study analysis, we find an unusually strong two-day market reaction of 3.2% for increase announcements and no significant market reaction for decrease announcements. The hypothesized effects with respect to uncertainty and direction of investors’ prior beliefs are also supported. We conclude by discussing implications for managing the investor relations function.
{"title":"The Information Content of Marketing Investments: The Case of Sales Force Resizing Announcements","authors":"A. Coughlan, K. Joseph, Duane W. Myer, M. B. Wintoki","doi":"10.2139/ssrn.1709785","DOIUrl":"https://doi.org/10.2139/ssrn.1709785","url":null,"abstract":"This paper is concerned with the ability of marketing investments to convey information from the “black box” of the firm to participants in the financial markets. We focus on the context of sales force resizing announcements in the pharmaceutical industry because the sales force comprises the main marketing instrument for firms in this industry. We hypothesize that sales force resizing announcements will generate a concomitant market reaction because they provide information about future demand. Moreover, we predict stronger absolute effects for “increase” announcements than for “decrease” announcements. This is because the mean-shifting and uncertainty reducing aspects of new information work in concert for increase announcements, but in opposing ways for decrease announcements. Our theory also predicts a more pronounced market reaction when investors are more uncertain about the firm’s future performance and the announcement contradicts the direction of investors’ prior beliefs. Employing an event-study analysis, we find an unusually strong two-day market reaction of 3.2% for increase announcements and no significant market reaction for decrease announcements. The hypothesized effects with respect to uncertainty and direction of investors’ prior beliefs are also supported. We conclude by discussing implications for managing the investor relations function.","PeriodicalId":359342,"journal":{"name":"MKTG: Selling & Sales Management (Topic)","volume":"178 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-11-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115722048","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There were not many studies dealt with productivity issues of personal selling effort in FMCG sector around the world. A modest attempt has been taken to assess the productivity of this effort by considering two brands (A & B) of two firms in India. Time-series data on sales and different marketing mix variables (advertising, sales force, promotion, distribution and price) in rupees have been collected for both the brands in question. Regression models (two multiplicative and one linear) are taken into consideration and fitted on data to estimate the adjusted sales response function to personal selling effort. Results suggest that the productivity of personal selling effort is higher for brand B than brand A and varies between the two brands. Findings will assist the managers to invest resources in this effort along with other elements in marketing mix more precisely.
{"title":"Assessing Productivity of Personal Selling Effort in India: An Econometric Approach","authors":"Mehir Baidya, Bipasha Maity, K. Ghose","doi":"10.14707/ajbr.110003","DOIUrl":"https://doi.org/10.14707/ajbr.110003","url":null,"abstract":"There were not many studies dealt with productivity issues of personal selling effort in FMCG sector around the world. A modest attempt has been taken to assess the productivity of this effort by considering two brands (A & B) of two firms in India. Time-series data on sales and different marketing mix variables (advertising, sales force, promotion, distribution and price) in rupees have been collected for both the brands in question. Regression models (two multiplicative and one linear) are taken into consideration and fitted on data to estimate the adjusted sales response function to personal selling effort. Results suggest that the productivity of personal selling effort is higher for brand B than brand A and varies between the two brands. Findings will assist the managers to invest resources in this effort along with other elements in marketing mix more precisely.","PeriodicalId":359342,"journal":{"name":"MKTG: Selling & Sales Management (Topic)","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126393693","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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