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Market-Based Solutions to Vital Economic Issues


Kenan Institute 2024 Grand Challenge: Business Resilience
Market-Based Solutions to Vital Economic Issues



Private labels (PL), also known as store brands or private brands, account for hundreds of billions of dollars in consumer packaged goods sales every year. PLs build store loyalty, improve margins and have been a key factor in changing the balance of power between retailers and national brand (NB) manufacturers. Thus, retailers around the world have a stake in pushing their own store brands. Yet, while PLs enjoy great success in Western, and increasingly Central, Europe, their performance is much more muted in the world's largest market, the United States, and in emerging markets. Why is that the case?

In the sales process in business markets, customers often are assisted by two types of sales reps: customer-focused reps (CSRs) and operations-focused reps (OSRs), who work together to ensure smooth buying experiences. Because these reps work jointly, selling firms often evaluate reps’ performance according to overall output, without assessing or quantifying their respective individual contributions to customer buying decisions. The authors of this study propose using value-added metrics that pertain to three drivers of value: (1) CSRs, (2) OSRs, and (3) the interface between CSRs and OSRs. This approach leverages variations in CSR–OSR combinations and produces both individual CSR–OSR and dyadic or interface value-added metrics. To address the empirical challenges (i.e., limited variations in CSR–OSR combinations), they use empirical Bayes random effect estimation to produce best linear unbiased prediction.

We examine the intersection of two major trends at online retail platforms: the emergence of retail media, which allows sellers to advertise on retail platforms alongside selling their products, and the platforms' switch away from reselling towards marketplace formats. We study whether and when a retail platform benefits from introducing sponsored advertising, and how the effects change with the platform's selling format. We consider two sellers with different qualities selling through a retail platform. We find that counter to our intuitions, offering sponsored advertising may not always benefit the platform, depending on its selling format.

Co-brands are strategically advantageous partnerships which can also involve risk. For example, Papa John’s gained access to the largest television audience in the US by sponsoring the National Football League (NFL), but later blamed stagnant sales on how the NFL’s handled players’ well-publicized protests of inequitable policing. What implications did Papa John’s prioritization of sales over fairness have for NFL consumption? To answer this question, the current research tests for changes in Sunday watch party rituals (SWPR), when U.S. consumers gather to socialize while watching live NFL games.

When a business model innovation (BMI) appears, incumbent firms experience great uncertainty about its potential ramifications and their capacity to assimilate the new business model. To resolve such uncertainty, incumbents seek to learn from industry peers, which can spark organizational herding. Organizational herding in BMI contexts is distinct, relative to product/technology adoption contexts, because in addition to peer behaviors, incumbents actively attempt to evaluate peer outcomes, and the importance of peer behaviors and outcomes likely vary, both over time and across types of peers.

Although the level of power held by the marketing department can determine key organizational outcomes, including firm performance, we show that this power has been decreasing since 2007. To address this apparent disconnect, we propose that the board of directors is a critical but overlooked antecedent of marketing department power. In particular, we demonstrate that directors’ exposure through board service at other firms (i.e., board-interlocked firms) affects the marketing department’s power in the firms on whose boards they also serve (i.e., focal firms).

In business markets, marketing and sales functions often conflict over customer acquisition. Marketers are seen to complain that sales representatives disregard the leads they generate, while sales representatives question the revenue potential of these leads. How should firms resolve such conflicts? We investigate these questions using relatively novel sequential principal-agent models with risk averse agents where asymmetry of information exists regarding leads’ revenue potentials.

Fayetteville State University Chancellor and CEO Darrell T. Allison, Fayetteville-Cumberland Regional Entrepreneur and Business Hub Director Tamara Martin and others talk about how the hub has affected the region's economy.

Crowdsourcing as a mechanism of open innovation is a popular way for organizations to solicit ideas from external agents. Our research focuses on the relationship between examples in problem statements provided to a crowd and the subsequent number of ideas submitted by the crowd.

Sports organizations typically sell tickets for popular elimination style tournaments (e.g., NFL Super Bowl) well in advance of the final games. Fans hesitate to buy these tickets because they are unsure about whether their favorite team will play in those games. As the result the tickets are cornered by agents and scalpers and resold at exorbitant prices once the playing teams are clarified. We demonstrate how consumer forwards and options buffer consumers from uncertainty, enhance league and team profits, and help control scalping.

Increased consumer demand for healthier product options and looming regulation have prompted many consumer goods brands to adjust the amount of sugar content in their product lines, including adding products with reduced sugar content or smaller package sizes. Even as brands adopt such practices, little guidance exists for how they should do so to protect or enhance their brand performance. This paper studies whether and when sugar reduction strategies affect sales.

With growing prominence of Diversity, Equity, and Inclusion (DEI) issues, we witness enhanced scrutiny of the public stance and statements of organizational actors. For example, two such statements by Tucker Carlson, known for his primetime show on Fox News, one on immigration (2018) and the other on the Black Lives Matter (2020) movement, pushed nongovernmental organizations, such as Media Matters, to sociopolitical activism by putting pressures on advertisers to boycott the show. This mingling of DEI, sociopolitical activism, and associated economic effects raises a critical research question: what is the economic consequence of DEI stances that arouse sociopolitical activism and what are the underlying mechanisms for the economic consequences?