IBM

BBM-7-IBM International Brand Management

 Question 1:

“Image, credibility, and trust have more influence than factual elements of awareness and knowledge.” (Rosenbaum-Elliott, Percy & Pervan (2011)1 Through critical discussion derived from academic peer reviewed published work and a range of researched examples, determine to what extent you agree or disagree with this statement. Consider the issues of measuring brand knowledge structures for an international brand manager.

Nowadays, there is an increasing level of the competition that creates the issue for the firm to have the growth in the business and to develop a good customer base.

The reason in this is that due to the globalization and the free trades of the government, it is easy for the firms to do the business across the boundary for developing the business and the customer base. Along with this, the globalization and the free trades also make easy the people to work at international level without facing any issue and the hurdle.

In like manner, in the research of (Jarman and McClune, (2010) it is determined that in order to increase brand value and the customer base, most of the firms tries to enhance the knowledge of the customers towards the products and the brand of the firm that makes easy the firm to increase brand value of the customer base also.

But at the same time, in the research of Papathanassis and Knolle, (2011), it is argued that the increasing the knowledge and awareness of the customer is not the much better way for the firm to increase the products demand to develop a good customer base.

It is because due to changing nature of the customers and the market value, it is not easy the firms to get the customers attraction through increasing their awareness. It is because now there are different factors like trust, good brand image in the market and among the customers, and credibility that play a major role in the success of the firm and also assist to develop a good customer base.

At the same time, from the research of Cheung and Thadani, (2012), it is determined that now most of the firms are aware about that increase the trust among the customers in the major way that assist the firm to sustain in the market and to develop  a good customer base.

Due to this, most of the firms look for doing the CSR (corporate social responsibility) and have their involvement in different activities related to social development.  It is because it is one of the best ways for the firm to increase the trust and to increase the brand image of the firms.

Because of this, it can be interpreted that increase the trust is one of the best ways to survive in the market and to develop a good customer base. In the favour of this statement, Schmeltz,  (2012), defined the theory of Equity and this theory focuses on determining whether the distribution of resources is fair to both relational partners.

Equity is measured by comparing the ratio of contributions (or costs) and benefits (or rewards) for each person. Because of this, it can be interpreted that increase the awareness of the people about the firm and the firms’ products is not much better than to increase the image of the firm in the market.

At the same time, in the research of Lu, et al., H. H. (2014), it is illustrated that trust is one of the major aspects that helps the firm to get the success in the market and to increase the brand name of the firm in the market as well.

In the same concern of this, from the research of Weichselgartner and Kasperson, (2010), it is determined that in order to increase the trust among the customers there are different ways that are used by the firms.

In this, provide the better quality products for the customers at affordable price and avoid the use of harmful chemical from the products are also the major ways that are used by the firm to increase the trust among the customers and to develop a good customer base.

In oppose of this, in the research of Cheung, et al., (2012), it is argued that It is easy to promise excellence, but failing to deliver on that promise can harm your relationship with customers, regardless of whether they have been customers for some time or are brand new.

According to Sales force, telling a customer “no” or responding in a way that seeks to please instead of revealing the truth can cause friction in the job. A consumer has certain expectations, and you should be honest about the reality of meeting those expectations. If it can’t be done, say so, then work together to find a new solution.

Furthermore, in the views of Yaakop, et al., (2013), it is formulated that customer trust derives from beliefs about management policies such as principles, values, statements, contracts, regulations, and guarantees in which customers feel safe, assured, and comfortable about the prospect of depending on the businesses.

Although, the concept of customer trust is different, in this study trust is viewed as a set of trusting beliefs, in employees and insurance companies, captured as customer confidence in the quality and reliability of the services offered and complaint management process.

So the study tries to measure customer trust from two approaches of customers trust on company employees and customer trust on the overall insurance companies.

Along with this, in the research of Saleem, et al., (2015), it is also illustrated that the in order to build the trust with the customers and to increase the customer base through developing trust, there are different ways like provide free demonstration, provide different offers in terms of discount, offer, etc. that helps the firms to increase the trust and to get the competitive advantages.

But in oppose of this, in the research of Anderson, et al., (2014), it is determine that although there are different advantages for the firm to develop the trust among the customers but at the same time, there are also different issues that are also faced by the firm and affect the developing trust process of the firm.

In regard to this, in the research of Donsbach,  (2014) it is identified that lack of communication of the managing department of the firm with the employees, lack of transparency, etc that are faced by the firm at the time of developing the trust among the employees.

At the same time, in the views of Jarman, and McClune, (2010) it is defined that Trust is a concept studied in various disciplines and, as a result, there are different definitions of trust. A dictionary definition of trust: “A psychological state where a person accepts vulnerability based upon positive expectations of the intentions of another”.

In the research of Papathanassis,  and Knolle, (2011) it is also determined that  trust as: the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor , irrespective of the ability to monitor or control that other party.

When there is trust customers believe that the marketer is reliable and has integrity and a customer has confidence that the employee is honest, fair and responsible and his or her word can be relied on.

Nobody expects a long-term relation with a partner that cannot be trusted. When there is trust in a relationship all parties believe that none will act opportunistically. With the respect of these findings Cheung and Thadani, (2012) stated that trust exists only when one party has confidence in an exchange partner‟s reliability and integrity.

They posit that trust is a major determinant of relationship commitment: brand trust leads to brand loyalty because trust creates exchange relationships that are highly valued. In the consideration of this statement Schmeltz, (2012) researched that Insurance is a promise to perform in future in return for a present monetary consideration.

Such a promise is made in an environment when the customer is absolutely not sure whether the promise will be fulfilled if and when the need arises. Insurance is intangible product and uniquely depends on trust.

In addition to this, from the findings of Cheung, et al., (2012) it is determined that brand trust leads to brand loyalty and commitment because trust creates exchange relationships that are highly valued.

Trust towards insurance according to Yaakop, et al., (2013), depends not only on the laws, industry regulations and contracts but also on the professionalism of the other party. If a customer, for example, has entered into a long-term contract with a service provider, the customer trusts that the service provider will perform according to expectations.

Therefore, customer trust has a positive influence on customer loyalty. The greater the customer trust is, the higher the customer loyalty becomes. Both customer trust in the employees and customer trust in the company are positively related to customer loyalty.

Question 2

Critically evaluate financial brand valuation methods using a range of different approaches. Consider the marketing metrics that could be used to help to achieve such a brand valuation? Use examples from industry as well as academic underpinning to show evidence of your knowledge and understanding.

For evaluating the financial brand value, there is need to use valuation method and different approaches which helps in evaluating or measuring the actual brand value. Nowadays, brand is not restricted to marketing or profit margin which company generates or made but brand has its different identity in everyday life.

According to Duguleana and Duguleana, (2014), brand valuation is referred as the process which is used for calculating the value of the brand which other is willing to pay for it. In other words, Kirk, et al., (2013) stated that brand value is calculated and helps in identifying the actual financial brand value.

Before evaluating the brand value, it is necessary to identify the two major things i.e., purpose behind such evaluation and what is being actually valued. In context to it, Huang and Sarigöllü, (2014) explained that for evaluating the actual value of brand, the different method or approaches are used in order to measure the brand equity value.

Chapman, et al., (2016) illustrated that cost based approach is an approach which is concerned about the cost which will create or generate while replacing or creating the brand. Under this approach there are various other methods which help in calculating the cost of brand value such as replacement cost method, historical cost method, customer preference model method and many more.

In contrast to it, Kraus, et al., (2015) stated that market based approach is effective for evaluating the brand value as this approach deals with the amount under which the brand value is sold to other. This approach is used when one company wants to sell its brand to other for which it uses various methods like comparable method, residual approach method and many more.

Similarly, (Krabec and Čižinska, 2014) elaborated that income based approach helps in evaluating the future net earning directly by determining the value of the brand and its current uses as this approach is effective as it demonstrates the future potential of a brand.

Depending on the method adopted for brand valuation, these factors may or may not affect the value. It is true that this process of evaluating concerns only the firm owning the brand or the one acquiring it, the existence of a supervising authority would evade the variation and subsequent disputes that arise in addition to preventing companies from alleging inflated cost of the brand.

Hence, though there has been a lot of progress in the field of brand valuation, there is still scope for more.

For achieving the brand valuation, the marketing metrics will be used as it helps in measuring the marketing performance of the brand in terms of demand and supply. This marketing metric can be used in best effective manner for achieving the value of brand.

On the other side, Samimi, et al., (2015) illustrated that marketing metrics involves various metrics factors such as metrics marketing productivity, financial metrics and preference metrics, etc.

The value of brand gets influenced with the marketing metrics in which marketing areas and its impact on customer acquisition and on brand strategy is found or observed. But at the same time, Sinclair and Keller, (2017) depicted that it is very critical for measuring the value of brand by doing market analysis as marketing is crucial factor and it is critical to get out from marketing communication easily.

However, marketing metrics not only helps in achieving the value of brand but also helps in taking informed business decisions. Generally, using the right metrics for measuring the brand value, equity and different activities helps in providing the information related business progress and needed adjustments which are required.

Using the Conversion Model, one estimates the amount of awareness that needs to be generated in order to achieve the current level of sales. This approach would be based on conversion models, i.e., taking the level of awareness that induces trial that further induces regular repurchase.

The output so generated can be used for two purposes: to determine the cost of acquiring new customers and would be the replacement cost of brand equity. The major flaw in this system is that the differential in the purchase patterns of a generic and a branded product is needed and the conversion ratio between awareness and purchase is higher for an unbranded generic than the branded product and this indicates that awareness is not a key driver of sales.

While considering the marketing metrics, the firms are also required to consider the other metrics which helps in measuring the brand strength and weakness. Each of the measures under these three metrics is critical and the boardroom must ensure that the brand portfolio scores high in each of these parameters to optimize the financial outcome from strong brands.

In addition, Viol, et al., (2016) explained that knowledge metrics measures a brand’s awareness and associations through the many stages of recognition, aided, unaided and top of mind recall. Similarly the functional and emotional associations of a brand are important drivers of brand equity.

Further, Verhoef, et al., (2015) added his view point by stating that preference metrics measure a brand’s competitive position in the market and how it benchmarks to competing brands. Customers pass through various levels of preference towards the brand which ranges from mere awareness and familiarity to strong loyalty and recurrent revenues from the customer base.

Moreover, Best (2016) stated that financial metrics measure a brand’s monetary value through the various parameters of market share, price premium a brand commands, the revenue generation capabilities of a brand, the transaction value, the lifetime value of a brand and the rate at which brands sustains growth.

Aaker (1991) proposed Customer Preference Model that the value of the brand can be calculated by observing the increase in awareness and comparing it to the corresponding increase in the market share. But he had identified the problem with this being how much of the increased market share is attributable to the brand’s awareness increase and how much to other factors.

A further issue is that one would not expect a linear function between awareness and market share.

The demand driver study and the performance metrics required the client’s marketing department to engage with the finance department to collaborate on pricing and with operations personnel on customer service options tailored for the mid-market segment.

According to Davcik, et al., (2014), B2B marketers have a considerable advantage over many consumer marketers because they know who their customers are and can measure the dynamics of acquisition, retention and optimisation with considerable precision.

 Question 3:

“By their very nature, models attempt to capture and portray a complex notion …” Trott, 2017) 2 . How do new product development models help international product managers, using examples to illustrate your arguments? Compare and contrast a range of such models offering critical discussion. Academic texts and journal articles together with industry examples should be used to highlight your understanding.

In the views of Snow, et al., (2011) the new product development plays a significant role for the international product manager as the product development model helps the product manager in terms of identifying that how long product will sustain in the global market and is it able to fulfil the needs of maximum customers.

At the same time product development model contributes towards the organisation preferences and growth and it is consider as a key factor in the business plan. In support of this, Fuchs and Schreier,  (2011) stated that for product manager, product development model prove to be beneficial as new product of the company is responsible for employment, economic growth, society welfare, improvement in standards of living etc. T

hus, to make efficient decision, product development model is crucial for providing the right analysis and prediction about the product growth.

For example, the new product development of Apple is better perhaps than any company on the industry. The company continuously brings new product in the market with the innovation. It helpful for the company to economic growth, society welfare, improvement in standards of living and provide employment.

In the research of Marmier, et al., (2013) it is found that new product development is becoming a necessity for the current global market as business environment is frequently changing with the advancement of technology.

So in that case for the international product manager, it becomes essential for them to use new product development model as with this model he can analysis the market situation and able to identify the changing needs and preferences of the customers.

Likewise with the help of new product development model, international product manager also able to bring an innovation in the existing product line and this model also help the manager in terms to select the right project so that their investment generates the returns for the company.

In addition to this study, McNally, et al., (2011) argued that managing the new product development process become a huge challenge for the project manager to successfully implement as it requires the extensive financial and human resources investment that incurred huge cost to the company.

At the same time the new product development model also takes so much of the organisation and distracts the organisation focus from its objective. It is also estimated that despite of performing the extensive research in the market regarding how much firm achieve the success in NPD and it is identified that product is not feasible for the market but still, company deliver or introduce its product in the market that makes the riskiest decision for the company.

So it can’t say that NPD is providing the benefits all the time and predict accurate decision. In support of this, Ayers, et al., (2011) depicted that new product development model is the best suited for the large multinational organisation project manager but it does not prove beneficial for the small firm as small firm does not have huge capital for making an investment on NPD.

Thus, it is estimated that investment in NPD is not always prove to be effective for the international product manager.

In the views of Wei and Chang,  (2011) new product development includes various steps such as new product strategy, idea generation, screening, business analysis, development, testing and commercialization etc. these steps works efficiently for the international project manager for evaluating the performances of the product in future so that accordingly decision can be taken.

Thus it is considering as a most feasible model for the international product manager. Likewise, Cadbury Company initially works only in one product line such as chocolate products but steadily it also enter into the new product line through using the steps of new product development model and with the help of the model,

Cadbury enter into the ice cream and desserts product line by offering the multiple range of products such as flake 99 cone, Cadbury twin posts flake and Cadbury chocolate trifle etc. at the same time it also enter into the drinks, boxes, bags, cakes and biscuit etc.

thus by using marketing. In order to enter into the market, Cadbury implement the marketing strategy and use the PLC cycle for identifies their product levels. On that basis it develops the new product line in every year.

Company also use marketing mix (product, price, place and promotion) and promotional tool (advertising, newspaper, radio, billboards, mobile vans) for successfully implementation of new product line.

At the same time, coca cola also use the new product development model in order to develop the new product line or making any modification in their existing product line such as it develop new product like coco cola vanilla, fanta lcy lemon etc. In case of existing product line, company modify its existing product line by launching diet coke for the health conscious people.

Thus, from the above example it is observed that both the companies use the new product development model for enter into the new product line and both the companies successfully adopt the model into their operations and with the model, companies get the high benefit and get the acceptances of their product from the target customers.

Thus new product development plays a significant role in successfully offering the new product line to customers

But according to Cousins, et al., (2011) dominances model of new product development is also widely use by the international product manager as this model is explicitly state the individual stages of the NPD process, their order, the activities involved and it also explain the linkages between the stages thereby aiding understanding of the process, and its management.

The key focus of this model is providing a series of key steps and model also acts as a device that guides to bring ideas towards successful products development. This model provides various stages in which new products pass through each stage in order to be commercialised or launched.

In order to proceed and progress, a number of evaluation criteria need to be fulfilled at each stage and need to pass through each ‘stage gate’. Hence, the stages are commonly viewed as information gathering activities. It guides the international product manager to take decision making regarding the launching and introduction of product in the market.

This leads to helps in decision-making and ensures that evaluations of the product are undertaken at critical points. Besides that international product manager also use stage gate model.

In the views of Huynh and Nakamori, (2011) BAH model (Booz, Allen and Hamilton) is the well suited model among from all model of new product development as this widely recognized model appears to encompass all of the basic stages of models found in the literature.

It is based on extensive surveys, in depth interviews, and case studies and, as such, appears to be a fairly good representation of prevailing practices in industry. Thus this model consider as a most effective model that contributes in social as well as economic benefit.

Question 4:

Discontinuous innovations violate some of the essential perceptions and habits and aim at creating new behavioral patterns on the part of the consumer and the firm’ (van Trijp H & van Kleef E 2008)3 Critically discuss how understanding ‘newness’ can help innovations be adopted. Use academic journal articles to prepare your response and ensure that the arguments are demonstrated with examples.

In the views of Brentani and Reid, (2012) innovation is the crucial part of the company as it is the one that attracts maximum customers and innovation also helps in stabilising the environment of the company. But with the discontinuation of innovation, it influences the behaviour pattern of the consumers.

But completely the discontinuation does not affect the human behaviour as it does not totally change behaviour patterns. For example, the walkman giving way to the portable CD player, or the pager gives way to the cell phone.

Likewise in support of this, Gammoh, et al., (2011) stated that discontinuous innovations does not means that there is a change in the technology but it reflects that there is need to change in the consumers behavioural pattern in terms of usage and consumptions.

It is also identified that the discontinuous of innovation brings the image of both company down as discontinuous innovation defines that not adding any type of feature and benefit for the customers so this makes the customers unsatisfied. Schumpeter’s Theory of Innovation is same with other investment theories of the business cycle.

This theory states that innovation in the business is main cause to enhance investments and business fluctuations. The dissatisfied among the customers influences their behavioural pattern. Thus, discontinuous innovation does not prove to be beneficial and appropriate for the company.

But in case of discontinuous innovation is performing with the aim to bring new technology then the discontinuous innovation will be prove beneficial and it able to attracts maximum customers. For example, the telephone is replacing with the mobile phone then the 3G and GPRS providing email access while on move as against email access on the computer/laptop.

Regarding, a paper by Benoit Godin (Godin, 2005) provides a historical discussion of the Linear Innovation Model. He suggests that the source remains unclear, but he offers an initial early reference from 1945. The model is ultimately summarized with the following steps:

Basic research → Applied research → Development → (Production and) Diffusion.

Godin also presents a time-based taxonomy, suggesting how this model has developed over time. The Linear Model of Innovation is an early model of innovation that suggests technical change happens in a linear fashion from Invention to Innovation to Diffusion.

It prioritises scientific research as the basis of innovation, and plays down the role of later players in the innovation process. The Linear model emphasizes scientific advance over contributions that come from players later in the process, leading to a key source of criticism.

The continuity of use for this model, despite much opposition, is partially attributed to its simplicity. More importantly, the statistics available based on the linear model, or lack of statistics for alternative models, may be delaying change to other innovation framework options.

In the research of Rowley, et al., (2011) it is find that discontinuation innovation tend to be prove not appropriate for the company as it reduces its profit margin and its ability to attract maximum customer.

Due to the changing environment, customers always thrive for the innovation in the product and in case they will not get any additional benefit with the product they start switching into the another product that become the big loss for the company as well for the stakeholders.

Nokia is great example of the discontinue innovation in the business world. The company was growing good in the past but due to lack of continuous innovation, it had to face lack to sufficient sales in the market.

According to Chang, et al., (2012), discontinuation innovation also become an disadvantage for the company/ firm in manner that no investors prefer to make an investment in that company that does not able to satisfy their customers.

Thus, these practices suffer the company growth and capacity to earn profits. The cause of Discontinuous innovations is a paradigm shift in science or technology and/or the market structure of an industry.

As they are entirely new-to-the world products, made to perform a function for which no product has previously existed, discontinuous innovation requires a good deal of learning for the incumbent organisation and its value network, including the user.

At the same time, Discontinuous innovations disrupt established routine and may even require a very different set of capabilities and new behaviour patterns. The notion of novelty is relative so a discontinuous innovation for one organisation might be an incremental one for another.

Moreover, Radical innovation and discontinuous innovation are synonyms. Disruptive innovation used to be a synonym until 1997. Since then the term has been strongly associated with Christensen’s model. Incremental innovation is the opposite of radical innovation.

In support of this, Hausman, and Johnston, (2014) depicted that of the discontinuous innovative is adopted with the purpose to match the technology then it provides benefit to the firm. For example: The walkman giving way to the portable CD player, or the semi-automatic washing machine giving way to the fully automatic one. Thus this concept has both positive as well as negative aspects for the firm.

Discontinued innovations are one of the major innovation types that change the existing habits of its consumers to a large extent.

According to Morris (2013), these types of innovation affects the consumer segments by incorporating the behavioural change  for fundamentally dissimilar products which have already captured customer base and have re-structured the marketers and existing competition.

In support of this, Belk (2014) in the study points that the use of internet and mobile phone technology have largely changed the way individual communicate with each other and within social system. The discontinued innovation differentiates consumers’ behaviour adoption such as for in high technological products.

This discontinuation process is seen to go against the fundamental insights and habits of the customers as in case of customers switched the use of antilog to digital products (Aloini et al., 2013).

The discontinuous innovation is leading a concept shift in technological aspects and scientific terms affecting the market structure of organisations aimed to satisfy the needs in new ways.

For example: Likewise because of not able to bring the innovation into their product line, operation and in their services, there are various companies that fail in the market. the best example in the case of social sites is Orkut and Yahoo as both the companies was not able to fulfil the changing needs of the customers that makes them fail into the market.

On the other side facebook who on a frequent manner brining the innovation and changes in their services had achieved more audiences in the market.

Besides that in case of telecommunication industry, Blackberry is also a best example of discontinuation as this company was also fail to baring new apps and technology in their handset that result in heavy loss for the company.

Thus according to Schumpeter’s Theory of Innovation, innovation is the necessary for the current environment as without offering something new to the customers, company could not survive into the market. So as per the theory of innovation, it is necessary for the companies to incorporate the innovation practices in their operational process, product line etc and this will helps the companies to achieve the future goals.

However, Goode et al. (2013) state that the innovation entail newness in terms of different dimension such as new product , service or other entity, how new is the entity, and from whom the entity is considered to be new. The newness of a product plays a major role in regulating the customer behaviour and intention to purchase the new entity.

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