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Mar k et i ngSt r at egyt oNav i gat et heCur r entUncer t ai nLands cape, Adv anc i ngont hePat ht ot heNextFr ont i erofRes i l i ence TheodorPURCĂREA
Res ear c hi ngt heBehav i or al El ement sof Onl i neVi deoGamePl ay er s .ADet ai l edAnal y s i sUs i ngSPSS. Par tI :AMar k et i ngAppr oac ht ot heVi deoGameI ndus t r y Val ent i nMar i usSTOI CAandTudorEDU
Di gi t al Cus t omerEngagement ,CXFut ur eandt heAdv anceoft he Met av er s eRel at edAc t i v i t i esI nc l udi ngi nECommer ceRet ai l I oanMat ei PURCĂREA
Bus i nes s&Academi cPar t ner s hi p( Romani a ) ,Tr ans f or mat i on Chal l enge,Sout hBohemi a,andBul gar i a-I ns pi r at i ons Ber ndHALLI ER
Locat i onBas edMar k etPos i t i oni nga Company–ACas eSt udyofFoodRet ai l er si nRomani a. Par tI :Li t er at ur eRev i ew Ni col asAl ex anderBOTZOKANandTudorEDU
‘ Mar k et i ngSc i enceandI ns pi r at i ons ’ :Env i s i oni ngaBet t erFut ur eby Educat i ngf orSus t ai nabi l i t y .TheRol eofSus t ai nabl eMar k et i ng DanSMEDESCU
Editorial Board of “Holistic Marketing Management” (A refereed journal published four times annually by the School of Management-Marketing of the Romanian-American University)
Editor-in-Chief Theodor Valentin PURCĂREA
John L. STANTON
Léon F. WEGNEZ
William PERTTULA Levent ALTINAY
Andrew KILNER Dana ZADRAZILOVA Riccardo BELTRAMO Sinisa ZARIC Gabriela SABĂU Hélène NIKOLOPOULOU Vasa LÁSZLÓ Peter STARCHON John MURRAY
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President of European Retail Academy; President of EuCVoT; Member of the Astana Economic Scientists Club; Former Managing Director EHI Retail Institute, Germany, Chairman of the Advisory Board of EuroShop, Chairman of the Board of the Orgainvent, Trustee of EHI Retail Institute at GLOBALG.A.P. President - Association of Global Management Studies (USA); Editor-in-Chief, Journal of Entrepreneurship and Sustainability Issues & Former Editor-in-Chief, Journal of Management Systems, USA; Australian Graduate School of Entrepreneurship, the Faculty of Business and Enterprise, Swinburne University of Technology; Member of France’s National Academy of Scientific Research (CNRS); Director - ESB International Teaching and Research Exchanges, Reutlingen University, Germany Professor of Food Marketing, Erivan K. Haub School of Business, Saint Joseph’s University Philadelphia, USA; Director, Institute of Food Products Marketing, Editor, Journal of Food Products Marketing; Hall of Fame of the European Retail Academy, Honored Personality 2016 Secretary General, International Association of the Distributive Trade, AIDA Brussels; Member of France’s Academy of Commercial Sciences; Doctor Honoris Causa of NUPSPA (SNSPA) Bucharest; Hall of Fame of the European Retail Academy, Honored Personality 2015; Administrator Secretary General of the Diplomatic Club of Belgium Internet Marketing Professor, College of Business, San Francisco State University, USA Professor of Strategy and Entrepreneurship, Research Area Leader, Oxford School of Hospitality Management, Faculty of Business, Oxford Brookes University, UK First MBA Director at the Rennes Graduate School of Business in France; Director of RAFME Research into Management Excellence; PhD (Cambridge), MBA (City, London) Faculty of International Economic Relations, University of Economics, Prague, Czech Republic University of Turin, Italy University of Belgrade, Yugoslavia Memorial University, Grenfell Campus, Corner Brook, Canada University of Lille 3, France Szent Istvan University, Hungary Comenius University in Bratislava, Slovakia Faculty of Business, Dublin Institute of Technology, Ireland
Kamil PÍCHA Irena JINDRICHOVSKA Norbert HAYDAM Hans ZWAGA Roxana CODITA Valeriu IOAN-FRANC Dumitru MIRON Iacob CĂTOIU Virgil BALAURE Gheorghe ORZAN Luigi DUMITRESCU Marius D. POP Constantin ROŞCA Petru FILIP
Ion VOICU SUCALA Virgil POPA Alexandru NEDELEA Olguța Anca ORZAN Ana-Maria PREDA Ovidiu FOLCUȚ Doinița CIOCÎRLAN Costel NEGRICEA Tudor EDU Alexandru IONESCU Andreea Elisabeta BUDACIA Marius Dan DALOTĂ Mihai PAPUC Gheorghe ILIESCU Oana PREDA Olga POTECEA Nicoleta DUMITRU Monica Paula RAȚIU Alexandra PERJU-MITRAN
Faculty of Economics, University of South Bohemia in Ceske Budejovice Deputy Head of Department of Business Economics, University of Economics and Management, Prague, Czech Republic Faculty of Business, Marketing Department, Cape Peninsula University of Technology, South Africa Kemi-Tornio University of Applied Sciences, Finland Technische Universität München, TUM School of Management Corresponding Member of the Romanian Academy, General Deputy Director, National Institute for Economic Research “Costin C. Kiriţescu”, Romanian Marketing Association; Romanian Distribution Committee Academy of Economic Studies in Bucharest, President of RAFPEC (FRAPEC) Academy of Economic Studies in Bucharest Academy of Economic Studies in Bucharest Academy of Economic Studies in Bucharest Lucian Blaga University of Sibiu Babes-Bolyai University, Cluj-Napoca President of Romanian Scientific Society of Management - SSMAR Dimitrie Cantemir University, Bucharest Technical University of Cluj-Napoca, Management and Economic Engineering Department; University of Glasgow, UK, College of Social Sciences, School of Social & Political Sciences; Managing Editor, Review of Management and Economic Engineering Valahia University of Târgovişte Ştefan cel Mare University of Suceava Carol Davila University of Medicine and Pharmacy Bucharest Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University Romanian-American University
Associate Editors Dan SMEDESCU Irina PURCĂREA Art Designer Director Alexandru BEJAN Holistic Marketing Management
“Holistic Marketing Management” (A refereed journal published four times annually by the School of Management-Marketing of the Romanian-American University)
Volume 12, Issue 3, Year 2022
Theodor PURCĂREA - Marketing Strategy to Navigate the Current Uncertain Landscape, Advancing on the Path to the Next Frontier of Resilience....................4
Valentin-Marius STOICA and Tudor EDU - Researching the Behavioral Elements of Online Video Game Players. A Detailed Analysis Using SPSS. Part I: A Marketing Approach to the Video Game Industry.................8 Ioan Matei PURCĂREA - Digital Customer Engagement, CX Future and the Advance of the Metaverse-Related Activities Including in E-Commerce Retail.....13 Bernd HALLIER - Business & Academic Partnership (Romania), Transformation Challenge, South Bohemia, and Bulgaria - Inspirations..............................22 Nicolas Alexander BOTZOKAN and Tudor EDU - Location-Based Market Positioning a Company – A Case Study of Food Retailers in Romania. Part I: Literature Review.................................................................28 Dan SMEDESCU - ‘Marketing Science and Inspirations’: Envisioning a Better Future by Educating for Sustainability. The Role of Sustainable Marketing.............37 The responsibility for the contents of the scientific and the authenticity of the published materials and opinions expressed rests with the author.
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Editorial: Marketing Strategy to Navigate the Current Uncertain Landscape, Advancing on the Path to the Next Frontier of Resilience
The month of October 2022 marked a new rich conversation between Professor Costel Negricea, Rector of the Romanian-American University (RAU), and his old and great Friend the distinguished Professor John L. Stanton, Chairman & Professor of Food Marketing, Saint Joseph’s University, Philadelphia, U.S. World-renowned Professor John L. Stanton is an inductee of the Hall of Fame of the European Retail Academy, of the Hall of Fame of the Private Label Manufacturers Association, and he was awarded Lifetimes Achievement Award, Promotion Optimization Award (http://holisticmarketingmanagement.ro/fruitful-discussionbetween-rau-rector-costel-negricea-and-professor-john-stanton-chairman-professor-of-foodmarketing-saint-josephs-university-philadelphia-u-s/). Both distinguished Professors are Members of the Editorial Board of the “Holistic Marketing Management” Journal of the RAU School of Management-Marketing, and Honorary Members of the scientific association Romanian Distribution Committee. In our last HMM Editorial we made reference, among other aspects, to the real need to develop functional capabilities in marketing, including to improve the so-called always-on marketing capabilities (Purcarea, 2022). Allow to add now that focusing on the imperative of CMOs’ preparation for uncertainty, Gartner (2022) highlighted that: the earliest executives both aware of, and affected by market pressures (N.B. such as quantity, timing, interactions with Holistic Marketing Management
customers etc.), as well as budget pressures (N.B. budget systems being attacked by uncertainty) are often CMOs; as yesterday (not today) was the best time to prepare for economic uncertainty (N.B. when a future view for the economy is unpredictable), to navigate the current uncertain landscape CMOs need to take essential steps which includes, for instance, to adjust the marketing strategy accordingly (see the impact of inflation on marketing strategies in figure below).
Figure no. 1: The Impact of Inflation on Marketing Strategies Source: Gartner, 2022. The Chief Marketing Officer, Third Quarter 2022. [pdf] Navigate The Risks & Opportunities of Economic Turbulence, p. 19 (Work cited)
According to the new report “Recession, Resilience, and Marketing Data: What’s Shaping the CMO’s Roadmap” by Adverity (Durnford-Smith, 2022) that surveyed CMOs from SMB across US and Western Europe (UK, Germany, Austria, and Switzerland), many CMOs are still struggling to deal with their data successfully, knowing that a key priority for them is to make data-driven decisions. Respondents revealed significant aspects, such as: there is both a lack of support from the leadership positions within a company, and a difficulty to obtain a budget for technology investment (25% of respondents); the increasing number of channels and platforms represents today’s biggest external impact on marketing (33%); there is an overwhelming volume of marketing data available (67%); a CMO’s team was as much as required resilient to adapt in tumultuous times to periods of unpredictability ( 75%); it is a critical competitive advantage to be able to make data-driven decisions (85%); a CMO’s marketing team is working with at least 10 data sources (99%). A recent McKinsey’s analysis (Ahlawat et al., 2022) of how to build resilience (defined as “the ability to deal with adversity and shocks and to continuously adapt and accelerate for Holistic Marketing Management
growth”) to grow in today’s economic turbulence, at the confluence of crises and disruptions, identified the practices used recently by Europe’s CEOs, three activities (response, foresight, and adaptation) being at the basis of the resilience agenda of the companies favoring innovation and development. These companies are considering enterprises’ specific dimensions in order to differentiate their response, as shown in figure below. In the opinion of McKinsey’s representatives, the outlined resilience framework enables gaps’ seeing and understanding, as well as identifying growth opportunities while advancing on the path to the next frontier of resilience.
Figure no. 2: The key levers of a resilient response lie across six enterprise dimensions Source: Ahlawat, H., Hatami, H., Mar Martinez, M, Natale, A., Poppensieker, T. and Raggl, A., 2022. A defining moment: How Europe’s CEOs can build resilience to grow in today’s economic maelstrom. [pdf] McKinsey Quarterly, October 2022, p. 8 (work cited)
Allow us to end by making reference to the valuable “October 2022 update of the Brookings-Financial Times TIGER (Tracking Indexes for the Global Economic Recovery) indexes”, which “shows that growth momentum, as well as financial market and confidence indicators, have deteriorated markedly around the world in recent months” (Prasad and Khanna, 2022). Theodor Valentin Purcărea Editor-in-Chief Holistic Marketing Management
References Ahlawat, H., Hatami, H., Mar Martinez, M, Natale, A., Poppensieker, T. and Raggl, A., 2022. A defining moment: How Europe’s CEOs can build resilience to grow in today’s economic maelstrom. [pdf] McKinsey Quarterly, October 2022, pp. 1-2, 8, 10. Available at: <a-defining-moment-how-europes-ceos-can-build-resilience-to-grow-intodays-economic-maelstrom-vf.pdf> [Accessed 15 October 2022]. Durnford-Smith, H., 2022. Recession, resilience, and marketing data: What's shaping the CMO's road map? Insider Intelligence, Sep 26, 2022. [online] Available at: <https://www.insiderintelligence.com/content/recession-resiliencemarketing-data-what-s-shaping-cmo-s-roadmap-sponsored-content?> [Accessed 9 October 2022]. Gartner, 2022. The Chief Marketing Officer, Third Quarter 2022. [pdf] Navigate The Risks & Opportunities of Economic Turbulence, pp. 2, 19-20. Available at: <cmo_journal_third_quarter_2022.pdf> [Accessed 26 September 2022]. Prasad, E. and Khanna, A., 2022. October 2022 update to TIGER: World economy battered by high inflation and stalling growth, Report, Brookings Institution, Sunday, October 9, 2022. [online] Available at: <https://www.brookings.edu/research/october-2022-update-to-tiger-world-economy-battered-by-high-inflation-andstalling-growth/?> [Accessed 25 October 2022]. Purcarea, T., 2022. On the Path to a Culture Transformation in the Era of Uncertainty, Progressing by Taking Responsibility for the Journey Orchestration, Holistic Marketing Management, vol. 12(2), pp. 04-09.
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Researching the behavioral elements of online video game players. A detailed analysis using SPSS. Part I: A marketing approach to the video game industry Valentin-Marius STOICA and Tudor EDU Abstract It is well-known that communication was always encouraged by interactivity generating knowledge and meaning, while active participation is enabling valuable content, deeper immersion being created by better video game players’ experience. Marketers are challenged to reach online video gamers by leveraging new opportunities identified on the relevant market, the rapidly increasing video game industry offering an interesting example of relationship between the sales of both hardware, and software. The very competitive and dynamic video game market is influenced by both the continuous technological advance, and the changes in trends and preferences of video game consumers, who are attracted by innovation in this video game industry which has become one of the largest entertainment industries globally. That is why a coherent analysis of the video game users’ behavior it is really useful. This paper is divided into four chapters, as follows. Part I is an introduction to the video game industry, presenting the economic power of the industry, the main factors influencing the video game consumers’ behavior, as well as particularities of the marketing strategies in the industry. Part II presents the marketing environment of one of the largest video game companies, namely Ubisoft Entertainment S.A. The main aspects analyzed are the microenvironment and the macroenvironment of marketing, each with its particularities. The SWOT analysis of the company will also be presented. In Part III, the actual study of the paper is presented, starting from the formulation of the conceptual framework of the scientific approach, continuing with the list of the research problem and purpose, objectives and hypotheses, and the definition of research variables. At the end, the applied research method is exemplified and the results are analyzed and interpreted. Part IV contains the research conclusions and recommendations for Ubisoft Entertainment SA company based on the results obtained in Part III. Keywords: Online video game players; Users’ behavior; Video game market JEL Classification: D83; L82; L83; M31
Introduction Video games are known as a common form of entertainment and leisure, especially among children and teenagers. However, they have evolved over time and thanks to technological developments, more and more people have access to at least one device that can run video games. The video game industry has become one of the largest entertainment industries globally, the industry reaching in 2021, for instance, a value of 198.40 billion US dollars, and it is expected to continue to grow (Mordor Intelligence, 2022). The restrictions caused by the Holistic Marketing Management
COVID-19 pandemic did not negatively influence the population’s perception of video games, they helped instead the industry grow due to the emergence of the need to spend free time at home. During the pandemic, socialization and human interaction proved to be some of the main reasons why more and more people started spending more time playing video games. In this Part I, the theoretical concepts related to the world video game industry will be analyzed. At the same time, the focus of the analysis will be on the factors that influence consumer behavior in the video game market and on the particularities of the marketing strategies used in the industry. 1.1 Video Game Industry Overview Video games are a form of digital entertainment that can capture the attention of users with various interactions. They are meant to provide players with various feelings such as fun, engagement or enjoyment. Video games also require an electronic platform to be played, and these days, the most popular are mobile phones, personal computers (PCs), and game consoles (Owen, 2016). to
Value (in billions of US dollars)
lobal video game market value from
ear Figure 1.1: Global video game market value from 2020 to 2025 Source: Developed by the authors based on data published by Statista <https://www.statista.com/statistics/292056/video-game-market-value-worldwide/> *Estimated data by Statista. [Accessed 11 June 2022].
According to the above figure, the value of the global video game market is estimated to increase continuously year by year, which makes the industry more and more popular and competitive. Over the years, the video game industry has evolved with technological developments. As more and more people began to have access to the Internet and own a computer or smart device, the video game industry expanded, eventually surpassing the music and movie industries (Beattie, 2021). Holistic Marketing Management
1.2 Peculiarities of marketing in video games Both the multitude of video games available and the very open market are important factors that have shaped the video game market to become a very competitive one. So, the main way video game companies can survive in the market is through continuous development, rapid implementation of new technologies and innovation. And to sell the final product to players, both current and potential, requires the implementation of marketing strategies specific to the video game sector (Zackariasson & Wilson, Editors, 2012). Marketing strategy development starts as early as the game’s pre-production period, with the main activities in this period being market research and distribution and public relations (PR) strategies. Then comes the production period, where the studios work on developing the game itself. This is the time when details about the game are announced to the general public, such as the title of the game, the genre of the game, and in some cases, a small video teaser is presented to arouse curiosity and excitement among players. And the last period is the post-production period, the period in which the quality and performance of the game are tested. From the point of view of the marketing strategy, the community management process takes place during this period. This process contains activities such as press conferences, releasing the game for reviews, and preparing for the game launch event (Ramadan and Widyani, 2013). Marketing strategies have evolved along with the technological changes in the field, very much influenced to changing gaming trends and the ever-changing market. Mainly, the most used marketing strategies in the video game industry are advertising, sponsorships, digital marketing, especially through mobile advertising and influencer marketing. Thus, video game advertisements are present in all corners of the Internet, from banners’ presence in social media to sponsored videos created by famous personalities. In the video game market, not only playing a game itself has proven to be something fun and interesting to watch, but watching other people play and react to the game is just as fun in most cases. So, several online platforms dedicated to watching video game content have emerged. The largest platform is Twitch.tv, owned by Amazon, but other social networks such as YouTube and Facebook also have dedicated platforms for video game content (Gandolfi, 2016). Similar to the big social media platforms, on these platforms too there are various personalities who have become influencers, each with different followers. With the help of influencer marketing, companies can introduce and increase their brand presence among potential users (Johnson & Woodcock, 2019). Influencer marketing has proven to be a very successful tool in the marketing strategies of video game companies, as the association with a well-known person inspires trust in the product among that person’s followers, and at the same time, helps to penetrate more easily to the niche users of the game the company wants for it (Jin, Muqaddam and Ryu, 2019). Another topic that marketing strategies need to consider is mobile devices and their huge potential to attract new users and allow more and more people to play video games. As can be
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seen in the figure below, the market for video games developed for mobile devices is constantly growing.
Figure 1.2: Global mobile gaming application revenue from 2019 to 2022 Source: Developed by the authors based on data published by Statista <https://www.statista.com/statistics/511639/global-mobile-game-app-revenue/> *Estimated data by Statista. [Accessed 11 June 2022]
One of the most used methods to increase the visibility of the game on mobile is to reward players when they share various key moments that they have had while playing the game. For example, when a player has passed a difficult level, they can share an image of their screen on social media platforms, and for this action, the game gives players a gift. In other situations, if players need one more chance to finish a level, they can watch an ad, and if they watch it all the way through, players get the chance they needed to finish the level. Such methods are usually practiced in the video game industry, but they have started to be used in other industries as well, taking the name of gamification. 1.3 Factors influencing consumer behavior in the video game market Video games were created as a form of entertainment for those who prefer a dynamic interaction, but with the evolution of methods of human interaction with the virtual environment and artificial intelligence (AI), the boundaries of emotional understanding of different aspects of the digital environment have been expanded. Video games affect the psycho-emotional level through the process of playing the game itself and not through the material environment. Their essence is solving specific problems and actively involving players in this process, thus managing to create intense emotions for users (Yu, 2004). In the case of video games, the motivations behind the user’s behavior can be analyzed in two ways: extrinsic motivation and intrinsic motivation (Legault, 2020). Extrinsic motivation refers to the motivation to play a video game for the somewhat material benefits it can bring, such as finishing the game in record time, achieving the highest score, or obtaining a very rare and valuable in-game item, in short, this motivation being based on the reward that a game can bring. While at the opposite pole is intrinsic motivation which is not based on an external reward, but is based on the simple inner Holistic Marketing Management
pleasure of playing a game because it is enjoyable to the person (in other words, it is based on the experience of playing a particular game). Also, another important factor to consider is the different goals a player has when playing. These can be divided into three categories: the completion goal, the transitional goal, and the improvement goal (Juul, 2010). The goal of completion refers to the successful completion of the game without encouraging repeat play. The transitional goal refers to the successful transition from one stage of the game to another, with the task being to complete the next stage successfully. In this case, it is not possible to change the results from a previous stage. And finally, the improvement goal refers to the constant improvement of the results achieved by the player in highly competitive games. This goal is found among players who like to make records and break records. Video games are capable of producing various emotions among players, both positive and negative, and another important factor that can influence player behavior is their mood. Thus, users can choose games based on various components to suit their mood, among the most important such components being imagination, story, complexity of game use, self-expression, socialization and immersion (Banyte & Gadeikiene, 2015). References Beattie, A., 2021. How the Video Game Industry Is Changing, Investopedia, Updated October 31, 2021. Reviewed by Khadija Khartit. Fact checked by Suzanne Kvilhaug. Available at: <https://www.investopedia.com/articles/investing/053115/how-videogame-industry-changing.asp> [Accessed 11 June 2022]. Gandolfi, E., 2016. To watch or to play, it is in the game: The game culture on Twitch. tv among performers, plays and audiences, Journal of Gaming & Virtual Worlds, 8(1), pp. 63-82. DOI: https://doi.org/10.1386/jgvw.8.1.63_1. Jin, S.V., Muqaddam, A. and Ryu, E., 2019. Instafamous and social media influencer marketing, Marketing Intelligence & Planning, Vol. 37 No. 5, pp. 567-579. https://doi.org/10.1108/MIP-09-2018-0375. Johnson, M. R., & Woodcock, J., 2019. The impacts of live streaming and Twitch. tv on the video game industry. Media, Culture & Society, 41(5), pp. 670-688. https://doi.org/10.1177/0163443718818363. Legault, L., 2020. Intrinsic and extrinsic motivation. Encyclopedia of personality and individual differences, pp. 2416-2419. DOI: https://doi.org/10.1007/978-3-319-24612-3_1139. Mordor Intelligence, 2022. Gaming Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022-2027). Available at: <https://www.mordorintelligence.com/industry-reports/global-gaming-market> [Accessed 13 July 2022]. Owen, P., 2016. What is a video game? A short explainer, The Wrap, March 9, 2016. Available at: <https://www.thewrap.com/what-is-a-video-game-a-short-explainer/> [Accessed 11 June 2022]. Ramadan, R. and Widyani, Y., 2013. Game development life cycle guidelines, 2013 International Conference on Advanced Computer Science and Information Systems (ICACSIS), 2013, pp. 95-100. Doi: 10.1109/ICACSIS.2013.6761558. Yu, Y., 2004. The impact of perceived interactivity and vividness of video games on customer buying behavior (Order No. 3123912). Available from ProQuest Central. (305042302) at: <https://am.e-nformation.ro/dissertations theses/impact-perceivedinteractivity-vividness-video/docview/305042302/se-2?accountid=136549>. Zackariasson, P., & Wilson, T. L., Editors, 2012. Marketing of video games. The video game industry: Formation, present state, and future, pp. 57-75. 1st Edition, eBook Published 27 June 2012, Routledge, New York. DOI: https://doi.org/10.4324/9780203106495.
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Digital Customer Engagement, CX Future and the Advance of the Metaverse-Related Activities Including in E-Commerce Retail Drd. Ioan Matei PURCĂREA
Abstract Digital marketplace, digital customer engagement, digital ecosystems are terms used commonly today. While applying creativity in leveraging data, analytics, and technology, marketers are more and more preoccupied with customer privacy and trust, CX ingredients, and predictive CX platforms as CX future in the digital world. There is an obvious advance of the metaverse-related activities including in e-commerce retail, now being the right time to take the smart strategic decision to start experimenting in the metaverse. There is no doubt about companies’ continuous challenge to improve DCX. Keywords: Digital Marketplace; Digital Customer Engagement; Digital Ecosystems; Customer Privacy and Trust; CX Future; Metaverse; E-Commerce; DCX
JEL Classification: D83; L81; L86; M15; M31; O32; O33
Digital marketplace, digital customer engagement, digital ecosystems and the not in harmony state of consumers’ brand trust In our last HMM issue we highlighted the great expectations by 2025 concerning ecommerce (significantly challenged by the potential value of the metaverse) within the context of the spectacular evolution of the digital marketplace (Purcarea, 2022). Eight years ago (Negricea Holistic Marketing Management
& Purcarea, 2014), we brought to our readers’ attention marketers’ challenge of positioning digital customer engagement (a critical channel for engaging customers being, for instance, mobile, a main primary screen already taking shape) as a top strategic priority, considering the new organizational architecture determined by the increasing digital competition, including at the level of the fast-moving world of online retail. Recently, Koch et al. (2022) underlined the more and more accepting dominant roles of the digital ecosystems (as socio-technical systems which are exploiting the network effects, connecting, via digital platforms, for their mutual advantage both multiple providers, and consumers of assets), and provide a basis for the digital ecosystems’ standards’ establishment (for example, the creation of methods for digital ecosystems’ design). Based on rigorous research (that allowed them the identification of a digital service criterion, as well of ecosystem service criteria, and digital ecosystem criteria, as shown in figure below), it was possible to obtain an easier view to understand the digital ecosystems.
Figure no. 1: Overview of digital and physical (ecosystem) services Source: Koch, M., Krohmer, D., Naab, M., Rost, D., Trapp, M., 2022. A matter of definition: Criteria for digital ecosystems, Digital Business 2 (2022), p. 9. (Work cited)
According to McKinsey Digital (Boehm et al., 2022), both a business differentiator of great importance, and a crucial strategic imperative in today’s digitally connected and datadriven world is the digital trust (defined as: “confidence in an organization to protect consumer data, enact effective cybersecurity, offer trustworthy AI-powered products and services, and provide transparency around AI and data usage”) achievement. Within this framework, it was shown that there is a lot of work to be done by companies in order to achieve what is expected (transparency about digital policies, clarity about how consumers’ data will be used, trustworthiness and data protection) by consumers (see figure below).
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Figure no. 2: Consumers value digital trust Source: Boehm, J., Grennan, L., Singla, A., Smaje, K., 2022. Why digital trust truly matters. [pdf] McKinsey Digital, September 2022, p. 4 (Work cited) Holistic Marketing Management
Customer privacy and trust, significant CX ingredients, predictive CX platforms as CX future in the digital world, while applying creativity in leveraging data, analytics, and technology A recent published report by CCW Europe (CCW Europe Digital, 2022) highlighted the need of improving various touchpoints (such as: employee engagement, productivity, and wellbeing; customer inclusivity and accessibility; customer privacy and trust) in the customer management lifecycle. Findings from CCW Europe’s annual survey revealed the main benefits of authentic customer management (as shown in figure below), including improved data transparency, privacy, trust, and consent for personalization. Within this framework, it was also shown how Amazon make great efforts to achieve authenticity thanks to its ability to easily access and work with data.
Figure no. 3: Benefits of Authentic Customer Management Source: CCW Europe Digital, 2022. Creating Long-Lasting Connections with Customers in an Age of Radical Authenticity. [pdf] CCW Europe Report, October 13, p. 2 (Work cited)
In the opinion of the well-known leading pure-play customer data platform (from Boston, MA, U.S.A.) BlueConic (2022), in the current privacy-first era it is important to know how to approach the privacy regulations, companies needing accurate compliance done with speed and efficiency based on the right technology stack, the new customer engagement model (identity being the core of it) considering the role of significant ingredients of customer experience (authentication, consent, and value exchange), as shown in figure below.
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Figure no. 4: Three ingredients of customer experience Source: BlueConic, 2022. The New Customer Engagement Model. [pdf] McKinsey Digital, September 2022, p. 11 (Work cited)
With regard to customers’ E E experience (described by the customer journey, CX needing to be measured at the journey level), McKinsey & Company (2022) recommends companies to focus on CX prediction so as to avoid dissatisfaction, and customer churn and dissatisfaction, improving CX based on more powerful insights. They also showed that regarding digital CX (DCX), predictive CX platforms (made up of a customer-level data lake, predictive customer scores using analytics, and an action and insight engine shared with employees through an API layer) could represent CX future, by significantly contributing to both link CX to value, and build security into DCX. The advance of the metaverse-related activities including in e-commerce retail, now being the right time to take the smart strategic decision to start experimenting in the metaverse McKinsey’s Metaverse Talks (Lowe and Khan, ) underlined recently that the next generation of digital engagement is represented by the metaverse, starting from the traditional belief regarding brands and consumers’ exchange of value as a transaction between the two parties in which consumers are prepared to share their data if they consider resulting a great CX happening after that and in addition to it. Acting on this way presupposes creatively thinking about the technology and experiences’ use so as to provide consumers with something magic, by really knowing how your brand benefits from the new additional experiences brought to consumers with the help of the metaverse. Other opinions expressed within the same framework showed that: - This coming revolution of the metaverse it is an opportunity for companies understanding the impact of the generation growing up with the metaverse (Matsuda, Khan and Otobe, 2022);
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- The metaverse can be accessed from a mobile phone, personal computers etc., but to make the younger population spend more time in it will be necessary to ensure trust and safety, also going at the same speed as data-privacy regulations etc., while considering both high-end professionally produced content, and user-generated content (Wee, Khan and Rutherford, 2022); - Immersive e-commerce and shopping experiences (as well as hyper-personalized, gamified learning and training etc.) are already introduced by the next-web applications (which up until the present point are including emerging 3D worlds); in case of e-commerce, it was an obvious acceleration of digital investments, as well then, a faster innovation (like BOPIS or Curated Shopping) beginning with 2020, compared to the period of time between 1994 (Amazon.com) and 2019; the metaverse is shaped by many types of companies, being about community (open, inclusive, personal, safe), human-centered design and value creation having as essential components both experience, and empathy (Solis and Khan, 2022). Involved in building the metaverse the technology giants are investing accordingly in a determined and forceful way, their activity being driven by the internet’s growing role in day-today life, the next generation of internet devices, and the explosion in global gamers, as shown in figure below (CB Insights, 2022). It is predicted that by the end of this decade will be a $1T metaverse market.
Figure no. 5: What’s driving big tech activity in the metaverse Source: Statista, 2022. eCommerce Market Romania, Digital Markets, Jun 2022 (work cited)
According to Van Belleghem ( ), now it’s the right time to take the smart strategic decision to start experimenting in the metaverse, the impact going much further (establishing a Holistic Marketing Management
presence, building a community, making the employees to learn about both technology, and customers’ needs, wants and specific behavior while interacting in a layered 360-degree view and/or immersive experience). This is confirmed, for instance, by the new trademarks registered by Walmart to make and sell virtual goods, one hand, and to offer users both a virtual currency, and NFTs.
Instead of conclusions: The metaverse has both advantages, and disadvantages, for the moment As shown recently by Insider Intelligence: a year ago Facebook rebranded to Meta (in competition with Apple and TikTok, for instance) that is losing substantial amounts of money on a metaverse that appears now like a deserted town (Lebow, 2022); consequently, Meta needs only to take measures to adjust Facebook and Instagram results etc. and, of course, to not talk very much about the metaverse (Goldman, 2022). In March 2022, Hollensen, Kotler, and Opresnik (2022) brought to our attention the huge impact of the metaverse on both the marketing function use by companies, and the future of interpersonal communication. In October this year, Kovoor (2022) argued that: right now would be a good time for companies to think a lot about their opportunities offered by the metaverse, and exploit the fullest potential of it by delivering virtual experience as important as a real-world one; the dependence of brands’ performance in the metaverse on a better understanding of the relationship between the three elements involved in it (a real-world consumer, a virtual avatar, as well as an online engagement process); until the transformation (eventually) of both worlds in one big metaverse, the winners will be those brands making no difference between the virtual and the real-world one. According to the 2023 Trend Report by Trend Hunter (whose CEO is the reputed Jeremy Gutsche, known as a NY Times Bestselling Author & Keynote Speaker), that focused on insights and opportunities, users of the metaverse are able to engage with this unfamiliar virtual territory in new ways (such as new methods of communication, the ability to display NFTs, toys designed as collectors’ items or games etc.) which have significant real-world impacts. On the other hand, according to the 2022 Metaverse in E-commerce Market report by Technavio (known as categorizing the metaverse in e-commerce market as a part of the global IT spending market at global level), the increasing popularity of the Augmented Reality (AR) technology represents one of the key factors driving growth in the metaverse in e-commerce market, a trend here being the highly personalized DCX, and from which it is expected a positive impact in the years ahead in which a major challenge will be the privacy and security concerns over metaverse. Without doubt, improving DCX remains a continuous challenge for all the companies already experimenting in the metaverse in e-commerce market, and to not remain where they are these companies need to take on this continuous challenge. Holistic Marketing Management
References Boehm, J., Grennan, L., Singla, A., Smaje, K., 2022. Why digital trust truly matters. [pdf] McKinsey Digital, September 2022, pp. 3-4, 16. Available at: <why-digital-trust-truly-mattersvf.pdf> [Accessed 17 October 2022]. BlueConic, 2022. The New Customer Engagement Model. [pdf] McKinsey Digital, September 2022, pp. 1-12. Available at: <The New Customer Engagement Model.pdf> [Accessed 25 October 2022]. CB Insights, 2022. The Big Tech in Metaverse Report: How Meta, Qualcomm, and Microsoft are building the metaverse, Report, October 20, 2022. [online] Available at: <https://www.cbinsights.com/research/report/big-tech-metaverse/?> [Accessed 26 October 2022]. CCW Europe Digital, 2022. Creating Long-Lasting Connections with Customers in an Age of Radical Authenticity. [pdf] CCW Europe Report, October 13, pp. 2, 6. Available at: <https://europe.customercontactweekdigital.com/customer-experience/reports/creating-longlasting-connections-customers-radical-authenticity> [Accessed 28 October 2022]. Goldman, J., 2022. After a weak Q3, Meta has a very narrow path to right its ship, Insider Intelligence, Oct 27, 2022. [online] Available at: <https://www.insiderintelligence.com/content/after-weak-q3-meta-has-very-narrow-path-rightits-ship?> [Accessed 27 October 2022]. Hollensen, S., Kotler, P. and Opresnik, M.O. (2022), "Metaverse – the new marketing universe", Journal of Business Strategy, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JBS-01-2022-0014. Koch, M., Krohmer, D., Naab, M., Rost, D., Trapp, M., 2022. A matter of definition: Criteria for digital ecosystems, Digital Business 2 (2022), pp. 9, 12. https://doi.org/10.1016/j.digbus.2022.100027. Kovoor, G., 2022. Is Your Brand Ready for the Metaverse? European Financial Review, October 22, 2022. [online] Available at: <https://www.europeanfinancialreview.com/is-your-brandready-for-the-metaverse/> [Accessed 26 October 2022]. Lebow, S., 2022. Facebook became Meta a year ago. How has the company changed? Insider Intelligence, Oct 27, 2022. [online] Available at: <https://www.insiderintelligence.com/content/facebook-meta-year?> [Accessed 27 October 2022].
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Lowe, R., Khan, H., 2022. Building a safer metaverse, McKinsey’s Metaverse Talks, October 13, 2022. [online] Available at: <https://www.mckinsey.com/capabilities/growth-marketing-andsales/our-insights/building-a-safer-metaverse?> [Accessed 30 October 2022]. Matsuda, Y., Khan, H. and Otobe, I., 2022. Gaming for a cause, Metaverse Talks, August 23, 2022. [online] Available at: <https://www.mckinsey.com/capabilities/growth-marketing-andsales/our-insights/gaming-for-a-cause?> [Accessed 30 October 2022]. McKinsey & Company, 2022. What is CX? Explore our featured insights, August 17, 2022. [online] Available at: <https://www.mckinsey.com/featured-insights/mckinsey-explainers/whatis-cx?> [Accessed 20.10.2022]. Negricea, C.I. & Purcarea, I.M., 2014. Digital Marketing and a Better Understanding of the Consumer Mobile Journey, Holistic Marketing Management, vol. 4(4), pp. 15-21. Purcarea, I.M.,2022. Shaping the Future of E-Commerce in Relation with the Data Economy, Holistic Marketing Management, vol. 12(2), pp. 16-30. Solis, B., Khan, H., 2022. Exploring the business promise of the metaverse, Metaverse Talks, August 23, 2022. [online] Available at: <https://www.mckinsey.com/capabilities/growthmarketing-and-sales/our-insights/building-the-next-big-experiences?> [Accessed 30 October 2022]. Technavio, 2022. Metaverse in E-commerce Market by Platform and Geography - Forecast and Analysis 2022-2026, Report, May 2022. [online] Available at: <https://www.technavio.com/report/metaverse-in-e-commerce-market-industry-analysis?> [Accessed 30 October 2022]. Trend Hunter, 2022. 2023 Trend Report [pdf]. Available at: <2023_Trend_Report_by_Trend_Hunter.pdf> [Accessed 26 July 2022]. Van Belleghem, S., . Why it’s smart to start experimenting in the metaverse now, CustomerThink, October 20, 2022. [online] Available at: <https://customerthink.com/why-itssmart-to-start-experimenting-in-the-metaverse-now/?> [Accessed 24 October 2022]. Wee, K., Khan, H. and Rutherford, S., 2022. Appealing to a broader audience, Metaverse Talks, October 13, 2022. [online] Available at: <https://www.mckinsey.com/capabilities/growthmarketing-and-sales/our-insights/appealing-to-a-broader-audience?> [Accessed 30 October 2022].
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Business & Academic Partnership (Romania), Transformation Challenge, South Bohemia, Bulgaria - Inspirations Prof. Dr. Bernd HALLIER
Prof. Dr. Bernd Hallier, President of the European Retail Academy (ERA: http://www.european-retail-academy.org/), an Honorary Member of the Romanian Distribution Committee, and distinguished Member of both the Editorial Board of “Romanian Distribution Committee Magazine”, and the Editorial Board of RAU “Holistic Marketing Management” brought to our attention other great events happening in the last time, and allowed us to present them. It is also worth recalling that: immediately after visiting Romania for the first time on the occasion of the 24th International Congress of the International Association for the Distributive Trade (AIDA Brussels), Prof. Dr. Bernd Hallier sent us, in May 1998, a memorable letter we have referred initially in the Journal of the Romanian Marketing Association (AROMAR), no. 5/1998, and also later, in 2010, in the first issue of the Romanian Distribution Committee Magazine; the Romanian-American University (RAU) has awarded Prof. Dr. Bernd Hallier a “Diploma of Special Academic Merit”; the “Carol Davila” University of Medicine and Pharmacy, Bucharest, has awarded Prof. Dr. Bernd Hallier a “Diploma of Excellence”.
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Business & Academic Partnership “The 13th Conference about the Supply Chain Management in Targoviste/Romania is an example for the necessary cooperation between Academia and Business to be competitive in global trade markets,” Prof. Dr. Bernd Hallier stated in a review. “According to a study of EuroCommerce, 90 percent of growth till 2030 will be generated by more digitalized processes; 40 - 50 percent of the processes in the Total Supply Chain will be fully automated by Artificial Intelligence at that time. Those facts had been focused exactly in the Conference headline Data Management of Digital Supply Chains in the Whirlwind of Disruptions,” Prof. Dr. Bernd Hallier added. “The Wheel of Retail has turned into a Retail Tornado which needs optimization of all players along the chain to survive a competition which needs rationalization to save costs on the one hand side and big investments into tools for future/technology, standardized processes and skilled staff for implementation and leadership on the other side,” Prof. Dr. Bernd Hallier concluded.
Academia was presented in the Conference by the top professors Virgil Popa, Costel Negricea, Mircea Duica and Theodor Purcarea. As partner for the application of Sciences the Consumer Goods Forum (CGF)/Paris acted as a co-chair - supported by a research-report and contributions like from Gerd Wolfram, former founder of the RFID implementation team at the METRO Group Future Store Initiative. “Already the fact of meeting continuously in such highranking team for more than a decade is an indicator for a high-level evaluation of this platform,” Prof. Dr. Bernd Hallier summarized.
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Transformation Challenge The Association “EuroCommerce” in Brussels is for Retail and Wholesale the political platform for the dialogue with the EU Commission. The interests of cross-border impacts are discussed and harmonized to optimize legislation. This Webinar showed the necessary investments to be taken till 2030 to compete with Asia and the US: split in a Study Report as well as a panel of retail/wholesale experts - both moderated by the Director General of EuroCommerce Christel Delberghe.
“It is not only for the political administration important to understand the development and processing of the actors in the Total Supply Chain but also for Universities and Applied Sciences to get an early feed-back for their own research,” Prof. Dr. Bernd Hallier stated attending this Webinar. “The three key-words Sustainability, Digitalization and Skills should be pushed in all the curricula of Education: they demonstrate the Tornado of Retail Evolution,” he added. “Our experience in the analysis of successful leadership shows that Skills beat Knowledge by 8 to !”
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South Bohemia The Second Meeting of the International Advisory Board of the Faculty of Economics of the University of South Bohemia in Ceske Budejovice/CZ was organized as a two-days hybrid event. Participants had been the Faculty Management and the Advisory Board Members: H. Pernsteiner/Austria, B. Hallier/Germany, L. Sdrolias/Greece, Z. Bacsi/Hungary, R. Miura/Japan, A. Skibinski/Poland and E. Horska/Slovakia.
Prof. Dr. Bernd Hallier has been teaching in Budweis periodically after the transformation of the Czech Republic. In 2009 his Budweis-Students created the see page after a crash course about city marketing. Budweis University also took part with three students sailing in an international workshop of Prof. Dr. Bernd Hallier with the tall-ship Kruzenshtern from Kaliningrad/Russia via the Skagarak to Bremerhaven/Germany. The focus was beside speaking English and acting in an international team also character-building by climbing the masts of the boat or to build an emergency-team for the case of SOS.
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Bulgaria – Inspirations In November 2022 the Trade Department of the University for World Economics in Sofia will celebrate its 70 years anniversary. Prof. Dr. Bernd Hallier will contribute a lecture about Innovation in Retail for this event. For November a special Reader is planned with more than 30 essays from the University and its friends.
“The first contact was made 20 years ago by a EuroShop Press Conference in Sofia. Then diverse follow-up sessions were organized by the University and separately by the retailmagazine Regal. Sometimes nearly 100 people joined those meetings: it was a great entrepreneurial spirit to learn about Modern Distribution,” Prof. Dr. Bernd Hallier remembered. “Via the University those contacts continued by traineeships of students: they had also a great impact to push our vocational training at www.european-retail-academy.org/EUCVOT,” he added. “But it is also an indicator about how an exhibition like EuroShop can inspire as a sector show young people and potential innovators in countries being in transition - in this special case from post-socialism towards market-driven economies,” Prof. Dr. Bernd Hallier stated.
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Location-based market positioning a company – A case study of food retailers in Romania. Part I: Literature Review Nicolas Alexander BOTZOKAN and Tudor EDU Abstract As customer is the center of retailing there is no doubt about the importance of retail stores’ visibility, accessibility and parking, neighboring of business communities etc., retailers’ longterm performance depending on good location (proximity, appearance, amenities, development, land size), the potential opportunity for a specific retail stores’ site to attract and retain customers, to impact their satisfaction, and even to turn them in promoters thanks to its location being crucial. And on the basis of such a good location, omnichannel marketers can better target consumers in each touchpoint or micro-moment of their decision journey, both ensuring them a seamless improved experience, and influencing their perception regarding retailer brand relative to its competitors, converting this way more prospects into customers. That is why a good estimation of the retail store location is a real challenge. The most significant aspects of location selection will be described and discussed in this paper, followed by a direct comparison alongside with a comparison model, based on three examples of three different retailers, located in three different cities. Keywords: Retail location; Market positioning; Location-based market positioning; Food retailers JEL Classification: D81; M21; M31; L66
Introduction Literature review is always a true challenge to researchers, and a review of the literature on retail location theory makes no exception, by identifying step by step significant advances, as well as some neglected research issues (Brown, 1993). One of the most crucial strategic choices a retailer must make for long-term success is the location of its stores (Cottrell 1973; Ingene & Lusch 1980; Kuo et al. 2002). Since convenience stores have the most direct contact with customers (Kuo et al. 2002), easy access, draw large crowds of customers, and increase the potential sales of retail outlets, an estimation of the market area in which the store is located is a crucial strategic tool for retailers to be able to attract customers attention and them to the store (Cheng et al. 2007; Grewal et al. 2009). Even little locational differences can have a big influence on market share and profitability in the fiercely competitive retail sector (Ghosh & Mclafferty 1982; Craig et al. 1984). Store site is a retailer’s long-term fixed investment since it cannot be quickly adjusted, unlike other marketing-mix components, in response to changing external conditions (Ghosh & Craig 1983; Craig et al. 1984). Holistic Marketing Management
The current review gives an overview on characteristics that influence store performance. In many studies, store performance has been assessed using various metrics such as store sales, market share, retail patronage, store traffic, store profits, and so on. The review’s goal is to categorize store location-selection criteria and offer a theoretical model to base future store performance studies on. One of the most essential strategic decisions a shop must make for long-term success (profitability, etc.) is store placement. (Ingene & Lusch 1980; Kuo et al. 2002; Cottrell 1973; Ingene & Lusch 1980; Kuo et al. 2002). Estimating the market region in which the store is located is a critical strategic tool for retailers looking to attract customers. Since convenience stores have the greatest direct interaction with customers (Kuo et al. 2007; Grewal et al. 2009), they provide easy access, attract a large number of customers, and improve the potential sales of retail outlets. Even minor differences in location can have a large impact on the market share in the highly competitive retail industry. (Ghosh & Mclafferty 1982; Craig et al. 1984). Store location, unlike other marketing-mix elements that may be easily modified in response to changing environmental conditions, can only be changed at a significant cost, and thus reflects a retailer’s long-term fixed investment (Ghosh & Craig 1983; Craig et al. 1984). We can find from over 100 years ago different very interesting approaches in the application of variety models (ex. Huff’s (1964) attraction models, Applebaum’s (1966) analog methods, Hotelling’s (19 9) “principal of minimum differentiation”) to solve the decision process in terms of location. However, it has been observed that there is a paucity of comprehensive research into the selection criteria required for evaluating suitable store sites. The proposed model, which displays a variety of characteristics that influence shop performance, might help businesses analyze their site choices. 1.1 Criteria of store location In location analysis, numerous parameters are used. Based on literature review, criteria for choosing a store location are classified into seven categories: 1. Economic factors 2. Performance measures 3. Population structure 4. Competition 5. Store characteristics 6. Saturation level 7. Magnets
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1.1.1 Economic factors Household income, income distribution, mobility (autos-per-household), inclination to spend money at the store, source of income, rentals, and other economic factors all have a role in the decision to site a store (i.e., Ingene 1984; Karande and Lombard 2005). In addition, the type and price of residences in the area where a retailer is considering locating, the proportion of families who own their homes (as opposed to those who rent), and the per capita sales for that area show the people’ income patterns. The “Survey of Buying Power,” which is arguably one of the greatest sources for collecting estimates of income distribution by country, is another useful resource. The number of people employed in a family, their total average income, and the consistency and frequency with which they earn money are all indicators of inhabitants’ ability to buy goods (Redinbaugh, 1987). Residents in the region where retailers are considering locating have spending power (i.e., the amount of money that will be available to buy things), but it is more crucial for retailers to know whether the residents are eager to spend their money at the shop (Redinbaugh, 1987). The total retail sales potential of an area in which they reside (Ingene and Lusch 1980; Redinbaugh 1987; Reinartz and Kumar 1999), profitability (Kumar and Karande, 2000), retail patronage behavior (Karande and Ganesh 2000), and price sensitivity are all closely related to economic characteristics of a population (Ingene and Lusch 1980; Redinbaugh 1987). As a result, the model used to make location selection decisions includes a number of economic elements. 1.1.2 Performance measures Because the store with the best expected performance is picked from among the possibilities, performance is used to determine where the store should be located. The aspects impacting store performance are, in fact, criteria that must be considered while choosing a retail location. As a result, the ability to predict performance goals such as dollar sales volume or demand (Cottrell 1973; Ingene and Lusch 1980; Reinartz and Kumar 1999; Berman and Evans 2010; Li and Liu 2012), store profits (Walters and MacKenzie 1988; Kuo et al. 2002), the number of customers patronizing the store (Stanley and Sewall 1976; Gautschi 1981), market share (Hoch et al. 1995). Using different indicators of store performance is seen to be important in determining the likelihood of a new store or stores entering the region providing the most utility. As a result, in this study’s location selection model, the most typically employed measures are sales volume, store profits, market share, retail patronage, and pricing elasticity. 1.1.3 Population structure The incorporation of demographic characteristics in store performance modeling considerably improves the model’s ability to choose good store locations. Many earlier studies have looked at Holistic Marketing Management
population structure using a variety of variables such as demographic characteristics (income, age, gender, and so on) as well as other data such as travel time and shopping patterns. The demographic structure of the market in every potential location is arguably the most crucial aspect for retail managers. Demography also enables retailers to determine whether the population in the area they want to serve is representative of their target market (Berman and Evans 2010). Because of their financial situation or long-standing habits, some people’s consumption behaviors are difficult to adapt or adjust (Redinbaugh, 1987). As a result, while evaluating potential placement areas, businesses must consider the spending habits of the people who live and/or work there. The addition of the purchase habit variable to the model will greatly increase the predictive ability of the location selection model. Several factors can be used to define characteristics of the population residing in the proposed location, including the number of households (Reinartz and Kumar 1999), population size (Berman and Evans 2010), population density (Karande and Lombard 2005), population growth rate (Berman and Evans, 2010), customer size and density, age (Irwing, 1986), gender (Irwing, 1986), education (Irwing, 1986), occupation (Berman and Evans, 2010), household size (Cottrell 1973), travel time (or distance) (Li and Liu, 2012), social classes and cultures (Irwing,1986), and purchasing habits (Redingbaugh9, 1987).
1.1.4 Competition When looking for appropriate sites, retailers should consider the competitive environment as a factor that influences shop success (Reinartz and Kumar, 1999). To give an example, Hoch et al. (1995) discovered that competitive forces account for the bulk of pricing elasticity variance across stores. In direct competition, a new store will be forced to compete with existing retailers selling the same products in order to get more market share. In the case of indirect competition, retailers who sell unrelated products are seen as potential competitors of newcomers to the market because they are vying for the same customer euro. Each retailer competes with other retailers in the neighborhood to take a portion of the citizens’ spending (Redinbaugh, 1987). As a result, they are direct or indirect competitors with the same market share. We still don’t know much about how a competitive retail environment affects store performance (Grewal et al., 2009). Retailers must be aware of what happens when competitive considerations are factored into the store-performance model in order to compete effectively. When evaluating competition in the context of retail location selection, a number of facts or figures should be surveyed and analyzed for the location’s eventual success: the spatial distance between retail stores, the size and number of competitor stores, shopping alternatives, settlement with comparison to competitors, relative competitive strength, competitors’ sales volume, stiffness in competition, and the quantity, quality, and extent of aggressiveness. Holistic Marketing Management
1.1.5 Store characteristics To achieve a competitive advantage or superior performance against their market competitors, retailers should investigate a wide range of shop features. Indeed, store-specific factors are strongly linked to retail store competitiveness. In this study, the most crucial characteristics of the store are divided into three groups: (1) accessibility, (2) store image characteristics, and (3) expenses. Probably one of the most studied variables in literature for store location-selection decisions is ease of access, which relates to people’s ability to reach the business easily and quickly (Dune and Lusch, 2008). Because many shoppers go by automobile, special attention should be made to the roads, streets, and parking facilities to make it easier for them to get to the shopping area. When the state of existing transportation facilities is assessed in terms of ease of access to the store, it is believed that they have a positive or negative impact on a community’s sales potential and, ultimately, the store in a given trade region (Redinbaugh, 1987). Then, to explain a significant variable in store performance, store-image attributes such as atmospherics, assortments, quantity, and quality of goods are addressed. Increasing merchandising assortments or improving store atmospheres through better layout and store-allocation procedures affects income as well as expenses (Ingene and Lusch, 1980). As a result, before making any changes to improve a store’s image, retailers should consider the impact on profitability. Finally, the model for selecting shop locations should take into account the impact of various expenditures on store performance. These expenses include the price of constructing, renting, purchasing, and remodeling the physical store, among other things (Irwing, 1986). 1.1.6 Saturation level The index of retail saturation (IRS) is a tool that can be used by retail experts to determine the desirability of a market. Formula (Bhatia, 2008, Retail Management): Index of retail saturation = IRS Population in an area who are likely to buy = POP Per capita retail expenditure = EXP Current retail space (sq. ft.) in area = CRS
The index is quite beneficial in determining whether or not they would be able to make a bigger profit in a particular market. The IRS is the ratio of a product’s or service’s demand to its supply
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(Dune and Lusch, 2008). As a result, IRS equals total retail sales per square foot of its marketplace location for a certain line of retail trade (Dune and Lusch, 2008). Some academics, such as Dune and Lusch (2008), have proposed using a measure of household size and retail spending instead of the number of inhabitants in a given area. The extent to which current retail facilities or enterprises are meeting demand for products and services in a given area is referred to as IRS (Dune and Lusch, 2008). The number of stores in a geographic area or the total square footage of such stores are considered the supply of retail facilities, while total store sales in the market are considered the demand (Ingene & Lusch, 1980). The supply of retail facilities influences the demand for goods and services in a given market. When measured in terms of the number of stores per thousand households, a market might be “understored, overstored, or saturated” (Kuo et al., 2002; Irwing, 1986; Dune and Lusch, 2008). To meet the demands of its population, an underserved market has too few stores supplying a given commodity or service. Profitability is quite strong with a high degree of possibility for retailers who choose to settle in such a region. When a trade region is an overstored market with too many businesses to adequately serve customers for a certain commodity or service, some retailers are unable to make a profit. When a market has just enough store facilities to suit the needs of the market’s population while also allowing retailers to make a reasonable profit, it is said to be saturated (Dune and Lusch, 2008; Berman and Evans, 2010). The study advises analyzing the saturation level of a market, which is a decretive factor in luring customers to retail businesses, as in prior studies on site analysis for retail stores. 1.1.7 Magnets Kuo et al. ( ) proposed a set of magnets that took into account “crowd point” (Irwing (1986), Timmermans (1986), “culture and education organization” (Irwing, 1986; Kuo et al., 2002) and “relaxation” (Irwing, 1986; Redingbaugh, 1987; Kuo et al., 2002) aspects to help build a more complete model when considering alternative store sites. To recently, most marketing research has focused on the influence of other aspects on business performance, but few have addressed the magnets in making a real location decision for a retail store. Timmermans (1986) discovered that the presence of magnet stores in the marketplace, which are difficult to identify, appears to be an essential determinant in retailers’ location decisions. All retailers should regard the presence of magnet stores as an advantage, according to researcher Timmermans (1986), because magnet stores draw more trade from larger distances. Pedestrian flows at a place with the most magnet stores have the potential to become more widespread. As a result, the site where magnet stores are located has the ability to draw the majority of the trade (Borgers and Timmermans, 1986). Kuo et al. (2002), who share this viewpoint, proposes a link between the magnet (i.e., crowd point) and shop performance in terms of the number of daily visitors. As a result, merchants
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should consider the existence of magnet stores throughout optional sites as an evaluation parameter to aid in the selection of a store location when aiming to attract visitors to their store. 1.2 Considerations The attractiveness of shop sites varies from day to day. Due to future competition invasion, a place that was formerly regarded good and profitable may become unwanted and unproductive. For example, Ghosh and Craig (1983) argued that population distribution and composition are essential determinants impacting store volume, and that these elements are changing over time. As a result, store owners and retailers must consider the shifting competitive landscape as well as the dynamic character of the retail market. This necessitates an understanding of how elements affecting store performance, such as profitability (Ghosh and Craig ,1983), will evolve over time in a certain market area. Furthermore, shifting demographics will create more confusion about how best to address consumer demands and desires (Ingene and Lusch, 1980). As a result, retailers must do timely research on the elements affecting shop performance in order to properly position their stores in a changing consumer market.
References Achabal, D., Gorr, W. & Mahajan, V., 1982. MULTILOC: A multiple store location decision model. Journal of Retailing. 1982. 58 (5-25). Applebaum, W., 1966. Methods for determining store trade areas, market penetration, and potential sales. Journal of Marketing Research, 1966. 3 (127-141). Berman, B. & Evans, J. R., 2010. Retail management: A strategic approach. (11th ed.). Prentice Hall, NJ, 2010. Bhatia, S.C., 2008. Retail Management: ATLANTIC, 2008. Borgers, A, Timmermans, H.J.P., 1986. City center entry points, store location patterns and pedestrian route choice behavior - a microlevel simulation-model. Socio-Economic Planning Sciences, 1986. 18 (25-31). Brown, S., 1993. Retail location theory: evolution and evaluation, The International Review of Retail, Distribution and Consumer Research, Volume 3, 1993 - Issue 2, pp. 185-229, Published online: 28 Jul 2006. https://doi.org/10.1080/09593969300000014. Cheng, E. W. L., Li, H., Yu, L., 2007. A GIS approach to shopping mall location selection. Building and Environment, 2007. (42, 884-893).
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Cottrell, J., 1973. An environmental model of performance measurement in a chain of supermarkets., Journal of Retailing, 1973 (49, 51-64). Craig, C.S., Ghosh, A. & McLafferty, S., 1984. Models of the retail location process: A review. Journal of Retailing, 1984 (5-36, 60). Dune, P. M. & Lusch, R. F., 2008. Retailing, Harcourt College Publishers. 2008. Gautschi, D. A., 1981. Specification of patronage models for retail center choice, Journal of Marketing Research, 1981, (162-174). Ghosh, A. & Craig, S., 1983. Formulating retail location strategy in a changing environment. Journal of Marketing, 1983. Available at: <https://www.jstor.org/stable/1251197?readnow=1&seq=11#page_scan_tab_contents> [Accessed 12.05.2022]. Ghosh, A. & McLafferty, S., 1982. Locating stores in uncertain environments: a scenario planning approach. Journal of Retailing, 1982. Grewal, D., Levy, M. & Kumar, V., 2009. Customer experience management in retailing: An organizing framework. Journal of Retailing, 2009 (85, 1-14). Hoch, S. J., Kim, B., Montgomery, A.L. & Rossi, P.E., 1995. Determinants of store-level price elasticity. Journal of Marketing Research, 1995 (17-29). Hotelling, H., 1929. Stability in competition, The Economic Journal, Vol. 39, No. 153 (Mar., 1929), pp. 41-57. Published By: Oxford University Press. https://doi.org/10.2307/2224214. Huff, D.L., 1964. Defining and estimating a trading area. Journal of Marketing, 1964. Ingene, C. & Brown, J., 1987. The structure of gasoline retailing. Journal of Retailing, 1987. 45 Ingene, C. & Lusch, R. F., 1980. Market selection for department stores. Journal of Retailing, 1980 (56, 21-40). Irwing, B., 1986. Basic retailing. Irwin, Inc. Illinois, USA, 1986. Karande, K. & Ganesh, J., 2000. Who shops at factory outlets and why? An exploratory study. Journal of Marketing Theory and Practice, 2000 (8, 29-42). Karande, K. & Lombard, J. R., 2005. Location strategies of broad-line retailers: an empirical investigation. Journal of Business Research, 2005 (58, 687-694). Kumar, V. & Karande, K., 2000. Effect of retail store environment on retailer performance. Journal of Business Research, 2000 (49, 167-181).
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Kuo, R.J., Chi, S.C. & Kao, S.S., 2002. A decision support system for selecting convenience store location through integration of fuzzy AHP and artificial neural network. Computers in Industry, 2002 (47, 199-214). Li, Y. & Liu, L., 2012. Assessing the impact of retail location on store performance: A comparison of Wal-Mart and Kmart stores in Cincinnati. Applied Geography, 2012 (32, 591600). Mahajan V. et al., 1988. Assessing market penetration opportunities and saturation potential for multi store, multi-market retailers Journal of Retailing, 1988. Moinpour, R. & MacLachlan, D. L., 1971. The Relations Among Attribute and Importance Components of Rosenberg-Fishbein Type Attitude Model: An Empirical Investigation, in SV Proceedings of the Second Annual Conference of the Association for Consumer Research, eds. David M. Gardner, College Park, MD: Association for Consumer Research, pp. 365-375. Redinbaugh, L. D., 1987. Retailing management: A planning approach. McGraw-Hill, Inc., 1987. Reinartz, W.J. & Kumar, V., 1999. Store-, market-, and consumer-characteristics: the drivers of store performance. Marketing Letter, 1999 (5-22). Smith, A., 2000. An Inquiry into the Nature and Causes of The Wealth of Nations. First Published: 1776, Source: The Wealth of Nations, The Modern Library, © 1937, Publisher: Random House, Inc., Transcription/Markup: Brian Baggins, Online Version: Adam Smith Reference Archive (marxists.org) 2000. Available at: <https://www.marxists.org/reference/archive/smith-adam/works/wealth-ofnations/book01/ch05.html > [Accessed 15 June 2022]. Stanley, T. & Sewall, M., 1976. Image inputs to a probabilistic model: predicting retail potential. Journal of Marketing, 1976, (48-53). Timmermans, H., 1986. Locational choice behaviour of entrepreneurs: an experimental analysis. Urban Studies,1986, (231-240). Walters, R. & MacKenzie, S. A structural equations analysis of the impact of price promotions on store performance. Journal of Marketing Research, 1988 (51-63).
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Congratulatory letter from Professor Peter Štarchoň on the occasion of the 30th Romanian-American University Anniversary
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‘Marketing Science and Inspirations’: Envisioning a Better Future by Educating for Sustainability. The Role of Sustainable Marketing
Dr. Dan SMEDESCU Associate Editor of the “Holistic Marketing Management” Journal Member of the scientific association Romanian Distribution Committee
JEL Classification: Y30 The “Marketing Science and Inspirations” Journal is continuing to prove the valued vocation of giving its savvy, affluent and implied readers a holistic perspective on modern marketing issues. As a true brand of the Comenius University in Bratislava, Slovakia, the “Marketing Science and Inspirations” Journal is constantly generating awareness and building lasting connections with its target audience, improving the brand image by always ensuring an improved experience. Consequently, we are witnessing our partners’ hard and smart work to provide to both current and new readers truly relevant and useful content on current business situations and key challenges faced by agile marketers, making marketing perspective happen.
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We were again happy to receive by post the new Issue 2, Volume XVII, 2022, of our Partner Journal “Marketing Science and Inspirations”, Comenius University in Bratislava, Slovakia. As usual, the new challenging issue of this valuable academic journal (addressing to academics and practitioners) covered a wide range of interesting topics in the marketing research field, such as: • “Sustainability – integration and communication in German manufacturers.” The author Marcus Diedrich provided a holistic approach based on a study conducted between December 2021 and March 2022. Research findings revealed significant theoretical and practical implications. • “The marketing potential of personalization of shipping packaging”. The authors Hana Volfová, Eliská Svobodová and Jana Pechová conducted their qualitative research both to investigate the differences in the personalization of shipping Holistic Marketing Management
packaging according to various age cohorts, and to identify the critical attributes of shipping packagages for the consumers. They demonstrated the real potential of personalization. • “Influence of Czech consumers’ education level on preferences for sustainable retailers and products”. The authors Eva Jaderná and Hana Volfová presented the results of a survey focused on the perception of sustainable retailers and products by Czech consumers. Research findings revealed among other aspects that: consumers’ education level influences perceived attributes of sustainability; the “sustainable segment” of the retail market could be represented by younger people with higher education. • “Configurator as a tool of marketing communication and its use in achieving emissions targets”. Within the context of the EU Green Deal, the author Martiná Beranek focused on cars’ ability to use the communication tool car configurator as both an element for customer education, and an influential tool in decision making. Her research revealed interesting findings. This new issue of the “Marketing Science and Inspirations” Journal also included other sections such as: ▪ “Marketing Briefs”: Pavel Štrach – “How doomscrolling habits might be used for effective marketing communications in metaverse”; ▪ “SHORT COMMUNICATIONS”: -
“COINTT 2022 Conference”; “FLEMA Media Awards 2022”; “Marketer of the year contest”.
▪ “REVIEW”, Magdaléna Samuhelová, “Ariely, Dan: How we lie” ▪ “DICTIONARY OF USEFUL MARKETING TERMS”, Dagmar Weberová. It is well-known that on the occasion of celebrating the 30th Anniversary of the Romanian-American University (RAU), “Holistic Marketing Management” Journal (HMM) was awarding an HMM Diploma of Special Merit to Professor Peter Štarchoň, for outstanding contribution in the field of Holistic Marketing and Talent Management. And we always remember with pleasure that the Editor-in-Chief of the “Marketing Science and Holistic Marketing Management
Inspirations” Journal – Professor Peter Štarchoň, Faculty of Management, Comenius University in Bratislava, Slovakia – is also a Member of the Editorial Board of both the “Holistic Marketing Management” Journal, and of the “Romanian Distribution Committee Magazine”.
It is also our honor and pleasure to remember both the significant meeting in Koln, Germany, in 2011, on the occasion of the working meeting of the European Retail Academy (ERA).
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