ISBM REPORT 10-1993 - pdfs.semanticscholar.org REPORT 10-1993 Institute for the Study ofBusiness Markets ThePennsylvania State University 113 Business Administration Building II University

Customer Value Assessmentin BusinessMarkets: A State-of-Practice Study

James C. AndersonDipak C. Jam

NorthwesternUniversity

Pradeep K. ChintaguntaCornellUniversity

ISBM REPORT 10-1993

Institutefor theStudyof BusinessMarketsThePennsylvaniaStateUniversity

113BusinessAdministrationBuilding IIUniversityPark,PA 16802-3009

(814)863-2782or (814)863-0413Fax

CustomerValue Assessmentin BusinessMarkets:

A State-of-PracticeStudyJamesC. Anderson

Dipak C. JamPradeepK. Chintagunta

ABSTRACT. The state-of-practicewith respectto customervalueassessmentin businessmarketswas studied. Familiarity with andusageof nine methodswere investigatedfor a sampleof 80 infor-mantsfrom the largestU.S. industrial firms and20 informantsfromthe largestU.S. marketresearchfirms that conductstudiesin busi-nessmarkets.Focusgroupvalueassessmentsandimportanceratingsare the mostwidely-usedmethods,while conjoint analysis,thoughusedlessfrequently,hasthe highestpercentageof judgedsuccessfulapplications.Implicationsof the results for marketingpracticearediscussedand some worthwhile areaswhere academicresearchmight advancethe presentstate-of-practiceare suggested.

In businessmarkets,the valueof a productoffering in a given applica-tion canbe thoughtof asthecornerstoneof marketingstrategy.Viewed in

lamesC. Andersonis theWilliam L. Ford DistinguishedProfessorof Market-ing andWholesaleDistribution andProfessorof BehavioralSciencein Manage-ment,andDipak C. lain is AssociateProfessorof Marketing,J. L. KelloggGrad-uateSchoolof Management,NorthwesternUniversity. PradeepK. ChintaguntaisAssistant Professorof Marketing, S. C. JohnsonGraduateSchoolof Manage-ment, Cornell University. The authorsgratefullyacknowledgethe financial sup-port of Penn State’sInstitute for the Studyof BusinessMarkets (ISBM) in spon-soringtheresearch,andthemanyhelpful commentsandsuggestionsof a numberof managersfrom ISBM memberfirms. Theauthorsalsogratefullyacknowledgetheableassistanceof JennyLewelling andSteveChristiansenin the research.

Send correspondenceto: JamesC. Anderson, Departmentof Marketing,NorthwesternUniversity, Evanston,IL 60208.

Journalof Business-to-BusinessMarketing,Vol. 1(1) 1993© 1992 by The l-Iaworth Press,Inc. All rights reserved. 3

4 JOURNAL OF BUSINESS-TO-BUSINESSMARKETING

this way, value is the underlyingconsiderationthat drivesdecisionsaboutproductdevelopmentand modification, pricing, distributionalternativesand marketingcommunications.Given the fundamentalnatureof valueinbusinessmarkets,it is critical for managersto gain estimatesof the valueof their productsin particularcustomerapplications,and to learnhow itcanbe enhanced(Wind 1990).

A numberof methodsfor customervalue assessmentexist, but apartfrom knowledgeaboutthecommercialapplicationsof conjoint analysisinbusinessmarkets(Cattin and Wittink 1982; Wittink and Cattin 1989),little is known aboutthe usageof thesemethodsin practice.Specifically,greaterknowledgeand understandingof what the presentawarenessandusageof thesemethodsby practitionersis, which of the methodspracti-tionersconsiderappropriatefor particularapplications,andwhat thecir-cumstancesare underwhich practitionerswould recommend,or not rec-ommend,thateachmethodbeemployedwould beof considerableinterestto both marketingacademicsand practitioners.A state-of-practicestudywould provideguidanceon which methodsarepreferredfor variousbusi-nessproblemswhereknowledgeof valueis consideredcritical, andit alsowould providedirection on neededadvancementsin presentmethods.

In this paper,we examinethe state-of-practiceof customervalue as-sessmentin businessmarkets,drawing upona field researchstudyof thepresentpracticesof the largestU.S. industrial firms. Our objective is toidentify the set of methodsused in assessingcustomervalueand to deter-minethe extentof their usageby industrialfirms. Our interestis in gainingan understandingof presentpractice,not in developingtheoreticalaspectsof valueassessmentor in derivingnormativeimplications.Thus,the con-tribution of our study is that we examinea broadsetof value assessmentmethods,focusingsolely upon their usagein businessmarkets,as con-trastedwith Wittink and Cattin (1989; Cattin and Wittink 1982), whofocusedsolely on conjoint analysis,butmorebroadlyconsideredits com-mercial applicationsin both consumerandbusinessmarkets.In addition,we delineatethe variousbusinessdecisionsthat firms addresswith valueassessmentmethods,and investigatetheextentto which thesefirms judgethe particularmethodsusedto be successful.Finally, becauseour intent isto capturethe “best” state-of-practice,ratherthanto be representativeofall presentpractice, the researchemploysa purposiverather than a ran-dom sample.

An overviewof the paperis as follows. First, we discusstheconceptofvalue in businessmarkets.Then, basedupon exploratoryfield research,we briefly discussthe businessdecisionareasfor which knowledgeof

Anderson, lain, and Chintagunta S

value is consideredcritical, followed by the methodsthat havebeenusedto assesscustomervalue.We next presentour field studyand its results,and discussthe implications of theseresultsfor marketingpractice.Wethen suggestsomeworthwhile areaswhereacademicresearchin market-ing might advancethe state-of-practice.

THE CONCEPT OF VALUEIN BUSINESSMARKETS

A numberof aspectsneed to be consideredin defining the conceptofvalue in businessmarkets.Christopher(1982)considersvaluein termsofthepricea customeris willing to pay for a productoffering, andpointsoutthat willingnessto pay needsto be understoodin termsof the set of per-ceivedbenefitsthat the productoffering providesto a customerfirm. Herelatesthis aspectof value to the notion of a customersurplus,which heexpressesas the amountby which the monetaryequivalentof the set ofperceivedbenefitsexceedsthe price paid for it. Reuter(1986) introducesthe notion of “usagevalue” which representsthe value associatedwiththe performanceof the productin a givencustomerapplication.As Reuter(1986,p. 79) writes, “Especiallyin industrial products,the value analystis primarily concernedwith use value—the performanceandreliability ofthe product— ratherthanits existing value(basedon prestigeor aesthetics,costvalue,or exchangevalue).”Usagevalueappearsto becloselyrelatedto the conceptof a productoffering’s value-in-use(Wind 1990). Forbisand Mehta (1981) emphasizethe aspectof competition in consideringvalue.They introduce the conceptof “economicvalue to the customer(EVC),” which refersto the maximumamounta customerfirm would bewilling to pay, given comprehensiveknowledgeof a focal productoffer-ing and the other, availablecompetitiveproductofferings.This suggeststhat customerfirms considerthe value of a productoffering relative toalternativeofferings.

In sum,the conceptof valuein businessmarkets:is perceptualin natureand shouldbe expressedin monetaryterms; needsto be viewed with re-spectto the setof benefitsthat the customerreceivesfrom usageof theproductoffering; and is inherentlyframedagainsta competitivebackdrop.Thus, we definevalue in business marketsasthe perceivedworth in mon-etaryunits of the set of economic,technical,serviceand social benefitsreceivedby a customerfirm in exchangefor the price paid for a productoffering, taking into considerationthe availablealternativesuppliers’of-feringsand prices.’

How does this definition of value in businessmarketsrelate to past

6 JOURNALOF BUSINESS-TO-BUSINESSMARKETING

work on value in consumermarketing?It appearsto be consistentwith thelatter two alternatedefinitions of consumerperceivedvalue reportedbyZeithaml (1988, p. 13): “(3) value is the quality I get for the price I pay,and (4) value is what I get for what I give.” In contrast,Monroe andKrishnan(1985)conceptualizea consumer’sperceivedvalueasthediffer-encebetweenthe utility inferredfrom the perceptionof quality andutility(sacrifice)associatedwith the price to be paid,whereperceivedquality is“the perceivedability of a productto providesatisfaction‘relative’ to theavailable alternatives” (p. 212). So, in their view, value capturesthenotion of the difference,or tradeoff(Dodds and Monroe 1985),betweenperceivedworth andprice paid. In the contextof our definition, we mightrefer to this differenceas “value surplus” or “incentive to purchase.”2

BusinessDecisionAreasWhereKnowledgeof Value Is Critical

We conductedin-depthfield interviewswith managersresponsibleformarketingresearchin nine large industrial firms, and with managersatthreemarket researchfirms that conductstudiesin businessmarketstogainan understandingof thebusinessdecisionsthatrequirean assessmentof thevalueof a productoffering to a customerfirm and the methodsthatare used in theseassessments.Each interview, lasting about an hour,startedwith thesamesetof questions,anddependingon the interviewee’sresponses,we probedwith follow-up questions.From theseinterviews,we identified a numberof businessdecisionsareaswhere knowledgeofvalueis critical for supplier firms. We groupthesebusinessdecisionsintothreeprimary areasfor expositionalpurposes,althoughsomeoverlapex-ists amongthem.

The first areais productdevelopmentwhich encompassesnewproductdesignandmodificationof existingproductofferings.Decisionson modi-fications mayinvolve eitheraddingor deletingelementsof a firm’s offer-ing. A secondareacan be termedvalue audits, where a supplier firmattemptsto gain an estimateof the value of its presentoffering, or anestimateof thevalueof presentaugmentingservicesthat “wrap” thecoreproduct.A final areais competitivestrategy,whereknowledgeis soughton the valuerelationshipof a firm’s productoffering to thoseof its com-petitors,with the resultsusedto allocateresourcesto the variousmarket-ing mix variables.

Anderson, Jam, and Cliintaguna 7

Methodsof CustomerValueAssessment

Basedon a review of the marketingliteratureandour exploratoryfieldresearch,we identified nine methodsthat havebeenused to assesscus-tomer value, developedoperational definitions for them for use in theresearchquestionnaire,andelicited questionsin the areaof value assess-ment that were of particularinterestto practitioners.

We elicited threemethodssurfacedduringour field researchthat drawupon industrial engineeringto provideestimatesof customervalue. Thefirst methodis intenial engineeringassessment,which requireslittle or nodirect customerfirm input. Theoperationaldefinition of this method is:

Internal engineering assessment. An estimateof the value for aproductoffering is obtainedby laboratorytestsconductedby scien-tists/engineerswithin the supplier’sown firm.

Applicationof this methoddependsupon detailedknowledgeof the usageof the supplierfirm’s productin the customerfirm’s productaswell as thecustomer’sproductionprocess.Assumptionsare typically madeabouttheway in which resultsfrom lab testswill generalizeto the customer’sactualusageof the product.

Field value-in-use assessments, by contrast,requireconsiderablecus-tomer firm cooperationand active input to arrive at an estimateof cus-tomervalue.The operationaldefinition of this methodis:

Field value-in-useassessment.Interviewsareconductedat customerfirm(s) to determinea comprehensivelisting of costelementsassoci-atedwith the usageof a productoffering comparedwith the incum-bent product offering (e.g., life cycle cost). Making explicit as-sumptions,valuesareassignedto thesecostelementsto estimatetheoverall value-in-useof the productoffering in that application.Thisvalue-in-useis typically expressedin centsper poundor dollars perunit.

In conductinga value-in-useanalysis,all relevantcosts associatedwiththe productoffering and its usage(e.g., life-cycle cost,ForbisandMehta1981) needto be considered,aswell as any differential value due to theproductoffering that accruesdownstreamin the production-consumptionvaluechain(Porter1985). Customerfirm reactionsaretypically soughttorefine assumptionsmadeabout,or the initial valuesassignedto, particularcostelements.

8 JOURNALOF BuslNESS~TO.BUSINESSMARKETING

Theusageof indirectsu,veyquestionsis the final industrialengineeringbasedmethod,and it is intermediateto the previoustwo methodsin theextent of customerfirm cooperationor active input that is required toprovidean estimateofvalue.Theoperationaldefinition of this methodis:

Indirectsurveyquesilons. In a field researchstudy,respondentsareaskedwhat the effectsof oneor morechangesin thepresentproductofferingwould beon certainaspectsof their firm’s operations.Fromtheseanswers,typically combinedin someway with otherknowninformation,estimatesof thevalueor worth of eachproductofferingchangecanbe obtained.

Hence,this methodcanbe usedto fill in critical gapsin the supplierfirm’sknowledgeof the customerfirms’ usageof its productoffering, or to testwhetherassumptionsmadeaboutthis usageare reasonable.

Two methodsprovide overall estimatesof customervalue. The first,focusgroupvalueassessment,employsfocusgroupsasa qualitative,phe-nornenologicalapproachto gain a betterunderstandingof the perceptionsand reactions of participantsto actual or potential product offerings(Calder 1977). In doingso, the researcherattemptsto generateestimatesof value.The operationaldefinition of this method is:

Focusgroupvalueassessment.Within a focusgroupsetting,partici-pantsareexposedto potentialproductofferingsor productconcepts,andarethenaskedwhat the valueor worth of themwould beto theirfirms. As an example,this kind of value assessmentmight be madeby askingthemquestionssuchas“What would yourbossbewillingto pay for this?”

Theparticipantsaretypically knowledgeableindividuals within customerfirms that are targetsfor the productoffering, although the perceptionsand reactionsof industryconsultantsor pundits mayalsobe studied.

The secondmethodthat generatesan overall estimateof value is directsurveyquestions. This method, suggestedby the managerswe inter-viewed, wasoperationallydefinedas:

Direct surveyquestions. In a field researchsurvey,respondentsaregiven a descriptionof a potential productoffering or productcon-cept,and are then askedwhat the valueor worth of it would be totheir firms. As an example,this kind of valueassessmentmight bemadeby askingthem questionssuchas“What would your firm bewilling to pay for this?”

Anderson, lain, and Chintagunta 9

To obtain a dependableestimateof value, the respondentsmus be bothwilling and have the requisite knowledgeto answera direct questiononthe perceivedworth of the productoffering. To the extent that eitheroftheseconditionsis not met, the validity of the obtainedestimatewill beproblematic.A seriesof follow-up questionswould be neededin eitherthefocusgroupor direct surveyquestionvalueassessmentmethodsto gain anunderstandingof how the componentpartsof an offering contributeto itsoverall estimatedvalue.

Two methodsof customervalueassessmentcan be groupedtogetherasbeingdecompositionalin nature;that is, they enablea researcherto breakdown a respondent’soverall perceptionof the valueof a productofferinginto the elementalvaluescontributedby its componentparts. The first,conjoint analysis, hasreceivedthemost researchby marketingacademicsof any value assessmentmethod(cf. Green and Srinivasan1990; 1978).Its operationaldefinition is:~~

Conjoint or Tradeoffanalysis. In a field researchsurvey, respon-dentsare askedto evaluatea set of potential productofferings intermsof their firm’s purchasepreferencefor each of the offerings.Eachoffering consistsof an arrayof attributesor features,and thelevels of theseattributesare systematicallyvariedwithin the set ofofferings. Respondentsprovide a purchasepreferencerating (orranking) for the offerings. Statistical analysisis then used to “de-compose”theseratings into the value (“part-worth”) that the re-spondentplaceson each level of eachattribute.The rangeof thesevaluesfor thelevelsof eachattributedeterminesthe relativevalueofattributesthemselves.

Wittink and Cattin (1989) have found that for the periods 1971-80and1981-85, industrial goodsrepresentedonly 20% and 18% of the reportedapplications,respectively;in comparison,consumergoods respectivelyaccountedfor 61% and 59% of the reportedapplicationsfor the sameperiods.4A potential explanationfor this differential usage,drawingonour field interviews, is the greaterperceivedcostand complexityof con-joint analysisrelativeto othermethods.5

Benchmarks, usedby oneof the firms we interviewed,representa sec-ond decompositionalmethodof customervalue assessment.An opera-tional definition of this methodis:

Benchmarks. In a field researchsurvey,respondentsaregiven a de-scription of a productoffering, typically representingthe present


industrystandard,that servesas a “benchmark”offering. They arethen askedhow much more their firm would be willing to pay forselectedadditionsin productattributesor featuresto this “bench-mark” offering. Likewise, they might be askedhow much less theirfirm would expect to pay for selectedreductionsin attributesorfeaturesfrom the “benchmark”offering.

Thus, this methodtradesoff someof the methodologicalrigor andbreadthof valueestimatesprovidedby conjoint analysisin favor of lowercost andease-of-use.

An oppositetack is taken with the compositionalapproach,also re-ferred to as the self-explicatedapproach(Greenand Srinivasan 1990).With this approach,an overall value estimatefor an offering is built upfrom separatevalue estimatesgiven by respondentsfor eachof its ele-ments.The operationaldefinition of this methodis:

compositionalapproach. In a field researchsurvey,respondentsareaskedto directly give the value of selectedlevels of a set of attrib-utes or featuresto their firm. For example, respondentsmight beaskedto give thevalue in centsperpoundor dollarsperunit for eachof threealternatelevelsof a given attribute,where all otherattrib-utesof the productofferingwere the same(heldconstant).Theval-uesgiven for the attribute levelscan then be addedto give estimatesof the overall valueof variousproductofferings to the respondent’sfirm.

Although the compositionalapproachhasthe strengthof being relativelyeasyto use,particularlywhenthe numberof attributesstudiedis large, itdoeshavesomepotentialshortcomings,such asrespondentunwillingnessto reveal the true values for attribute levels (cf. Green and Srinivasan1990).

Lastly, a methodfor assessingcustomervaluethat wasgiven by a num-ber of practitionersis importanceratings (Churchill 1987). An under-standingof the value of a productoffering, andwhere it can be strength-ened,typically is gainedby usingthe resultsfrom the importanceratingsfor a setof offering attributesin conjunctionwith the resultsfor a corres-pondingset of performanceratingsof the supplieron the offering attrib-utes(e.g.,Wilson, Coreyand Ghingold 1990;Martilla andJames1977).The operationaldefinition of this methodis:

Anderson,Jam, and Chintagunta 11

Importance ratings. In a field researchsurvey, respondentsaregiven a setof attributesor featuresof a productofferingandarethenaskedto rate (or rank) them on importanceto their firm. For theattributesor featuresthat were rated, respondentsare alsoaskedtorate (or rank) the supplierfirms with respectto their performanceonthem, therebyproviding a competitoranalysisof the valueprovidedby eachsupplier’sproductoffering.

A shortcomingof importanceratingsas a methodof customervalueas-sessmentis that theydo not providean estimateof the perceivedworth inmonetaryunits of the product offering or its elements.Relatedto this,importanceratingsalsodo not providean indication of a customerfirm’srelative value for a changein the level of performanceon one attributeversusanother(Montgomery1986).

METHOD

Sampling Frame

Theobjectiveof the studywas to gain an understandingof the state-of-practicewith respectto the usageof customervalue assessmentmethods.Further, in constructingour samplingframe,we purposivelyattemptedtocapturethe “best” or most progressivestate-of-practice.Our exploratoryresearchindicatedthat only the largestindustrial firms tendto haveman-agerswith marketresearchresponsibility,and that firms that do have in-housemarketresearchstuffsarehavinga greaterproportionof their mar-ket researchstudiesbeing conductedby outside marketresearchfirms.Thesefindings areconsistentwith the recentfindingsof KinnearandRoot(1989).Therefore,we limited our samplingframeto the 125 largestU.S.industrial firms (Fortune 1988)andsupplementedit with the top 40 U.S.marketresearchfirms (Advertising Age 1988).

Seventy-sevenof the Fortune 125 corporationsservebusinessmarkets,while the remainderserveconsumerproductmarkets.We madethis deter-mination by referringto the Business Week1000 Industry Classification(BusinessWeek 1988).6To augmentthis list, we alsoconsultedthe Insti-tute for the Studyof BusinessMarkets (ISBM) ContactDirectory to in-cludesomefirms in our studythat arenot includedin theFortune 125 listbut areof comparablesizeandservebusinessmarkets.From this source,we added3 memberfirms to our samplingframe:Dun & Bradstreet,GTEand United Telecom.Of the top 40 U.S. marketresearchfirms, only 24conductedindustrial marketingresearchstudies.Thus, usinga purposive


or judgment sampling approach (Churchill 1987), our final samplingframe consistedof 80 of the largestindustrial firms and 24 of the largestmarketresearchfirms.

Fifty-eight of the 80 industrial firms and 16 of the 24 marketresearchfirms wereableandwilling to participatein the survey.The remaining22industrial firms eitherdid not do any customervalueassessmentresearch(8 firms), wereunableto participatebecausetheywere toobusy(7 firms),werenot interestedin participating(5 firms), or could notget approvalforseniormanagementto participatein the survey(2 firms). The remainingeight marketresearchfirms eitherdeclinedto participate(4 firms), partici-patedin the pretestfor marketresearchfirms (3 firms), or hadheadquar-ters locatedin England(1 firm: ResearchInternationalLtd.). Becauseofthe largesizeof the firms studiedand the diversityof experiencethat canoccur within eachfirm, industrial firms wereallowed to nameup to threeinformantsthat were from different businessesandmarketresearchfirmswere allowed to nameup to two informantsthat were from different of-fices.

We obtainedthenamesof 122 participantsfrom the industrial firms and22 participantsfrom the marketresearchfirms. Participantsfrom the in-dustrial firms had titles such asManagerof MarketingResearch,Managerof BusinessPlanning,and Managerof MarketingPlanningandDevelop-ment,while participantsfrom the marketresearchfirms had titles suchasVice President,SeniorVice President,andExecutiveVice President.Weusedthis list of 144 potential participantsas the target informantson thepresentstate-of-practicefor customervalue assessmentmethods.Withinthe time frame of the study, interviewswith 100 informantswereable tobe completed:8() from industrial firms and20 from marketresearchfirms.Thebusyschedulesand frequenttravel inherentto theseinformants’ posi-tions prohibitedcompleting interviewswith the remaining44 informants(i.e., noneof the informantsrefusedto participate).A brief descriptionofthe informant sampleappearsin the Appendix.

Procedure

SurveyQuestionnaire Design. Basedon our exploratoryfield research,we beganthe questionnairewith a brief overviewof the studyandaspartof this providedsomeexamplesof researchthat we refcrredto as “cus-tomervaluestudies” (e.g.,determiningthe valueof potentialchangesinpresentproduct offerings). For each of the value assessmentmethodsstudied, its operationaldefinition was first provided and then the samesequenceof questionswasasked.Briefly, the informants from industrialfirms wereasked:

Anderson, Jam, and Chirnagunta 13

“Are you familiar with this method?”“Haveyou used this methodin the pasttwo years?”“If you haveusedthis methodin the past,but no longeruseit, whatare the reasonsfor this?”

Informantswho hadusedthe methodwithin the pasttwo yearswereaskedthe remainingquestionsin the set:

“What businessdecision,or decisions,wereaddressedin the mostrecentapplicationof this method?”“In your judgment,how successfulwas this tool in answeringthequestionsthatyou soughtto answerwith it?” [Notsuccessful,Partlysuccessful,SuccessfulJ“Based upon your experiencewith it, under what circumstanceswould you recommend/notrecommendusageof this method to as-sesscustomervalue?”

The version of the questionnairefor market researchfirm informantswasdifferent in two respects.First, the internal engineeringassessmentmethodwasnot includedasthis methodis applicableonly to the industrialfirms. Second,given that market researchfirms likely perform a greaternumberof value-assessmentstudiesrelative to industrial firms, we de-cided to shortenthe time framefor the usagequestionand asked:“Haveyou usedthis methodin the pasttwelve months?”

After the set of value assessmentmethodswas covered, informantswere askedabout additionalmethods(up to two methods)that they hadfound most useful in assessingcustomervalue.For each,theyprovidedabrief descriptionand answeredthe latterset of abovequestions.Finally,informantswere asked:

“What, if any, problemsin assessingcustomervalue do you havethat are not adequatelyaddressedwith the presentmethods?”

Eachversionof the questionnairewaspretested,andneededchangesweremade.

Data Collection Procedure.The data were collectedfrom informantsusing a combinationmail and telephoneinterview approach.The inter-views wereconductedby a market researchfirm, under the directionofthe researchers.After our initial contactcall to set up a time for the tele-phone interview, a copy of the questionnairewasmailed to eachpartici-pant. Each participant then interviewed over the phone.This mail andtelephonecombinedapproachobviatedhavingparticipantsfill-out andre-


turn the questionnaireby mail, and enabledus to collect the datawithinthe time frame set for the study.

Content analysis. To obtaina setof the kindsof businessdecisionsthatare addressedwith value assessmentmethods,we content-codedthe re-sponsesgiven by informantsacrossthe methods.A set of nine businessdecisionswas defined from theseresponses,and then threejudgesas-signedeachbusinessdecisionmentionedto one of thenine categories.Asthesecategorieswere to be used in further analysis,we calculatedthereliability index (Ir) recentlydevelopedby Perreaultand Leigh (1989) toassessinterjudgeagreement.TheI, values(and95% confidenceintervals)for the threepairsof judgeswere .91 (±.03), .88 (±.03) and .86 (±.04), indicating significant and substantialreliability in the assignmentjudgments.The disagreementsamongjudgesin their initial assignmentswere resolvedby discussionand then majority rule.

RESULTSAND DISCUSSION

Familiarity and Usage

The resultsfor the informants’ familiarity with and usageof the valueassessmentmethodsappearin Table 1. Although the patternof resultsforinformants from industrial firms and market researchfirms are similar,thereare somesignificant differences.A greaterpercentageof industrialfirm informantsarefamiliar with field value-in-useassessmentsandreportusing it in the recentpast. An explanationfor this is that value-in-useassessmentswould eitherbe performedby industrial firms themselves,or,whenoutsideassistanceis sought,they would typically go to engineeringconsultingfirms ratherthan to marketresearchfirms.

A smaller percentageof industrial firm informants are familiar withconjoint analysis.Perhapsbecauseof its greatercomplexity, a consider-ablysmallerpercentageof theseinformantshaveusedconjoint analysisinthe recentpast,comparedwith marketresearchfirm informants.A gen-eral finding is that firms in businessmarketsrely upon methodsthat havelesscomplexity (or cost) associatedwith them. As supportfor this, notethat focus groupvalue assessmentsand importanceratingsare the onlymethodsthat have90% or greaterfamiliarity and60% or greaterusage.Finally, informantsreport having the least familiarity with and usageofthe compositionalapproach.?

Anderson, Jam, and Chintagunta 15

TABLE 1.

Familiarity With and Usage of Value Assessment Methods (Z)

Industrial Firms Market Research Firms

Method Familiar Wi tha ~gjb £MLLLLL2~L~h ~jjgjC

Internal engineering

assessment 61.3 42.5

Field value-in-use

assessment 63.8 36.3 25.0 5.0

Focus group value

assessment 92.5 60.0 90.0 60.0

Direct survey questions 91.3 48.8 85.0 55.0

Importance ratings 91.3 62.5 90.0 65.0

Benchmarks 83.8 27.5 80.0 25.0

Conjoint analysis 75.0 28.8 90.0 60.0

Compositional approach 45.0 10.0 40.0 5.0

Indirect survey questions 71.3 26.2 60.0 20.0

(n—80) (n—20)

Afcer an operational definition was given for each method, informants from both

industrial firms and marker research firms were asked: Are you familiar withthis mechod?. The percentage of informants answering yes is presented.

blnformants from industrial firms were asked, Have you used this machod in thepast two years?tm.

‘Informants from market research firms were asked. Have you used this method in

the past twelve months?.

dNOt asked for market research firm informants.


BusinessDecisionsAddressed

The businessdecisionsthat areaddressedwith value assessmentmeth-odsappearin Table2. Of the nine businessdecisions,new productdesignor developmentand existing productmodification or redesignrepresentslightly morethanone-thirdof thebusinessdecisionsmentioned.Obtain-ing an estimateof the value of the presentoffering and pricing decisionsrepresentslightly lessthan anotherone-thirdof the businessdecisions.

TABLE 2

Business Decisions Addressed With Value Assessment Methods

Business Decision

Frequency ofMention

a LI).Number of

Methods Used

New product design ordevelopment

Product modification orreds s igr~

Value of present offering

Value of present or potentialaugmenting services

Design of marketingcommunications andsales tools

Determine pricing

Product positioning andcompetitive analysis

Demand analysis andforecasting

New investment orbusiness entry

a

a

9

67 20.2

45 13.6

50 15.1

12 3.6

26 7.9

52 15.7

8

7

9

952 15.7

13 3.9

14 4.2

S

6

331 99.9Z

Anderson, Jam, and Chintagunta ‘7

It is interestingthat only 15.1% of the mentionedapplicationswere forassessmentof the valueof the presentoffering. Much discussionis takingplacewithin industrial firms on becoming“customer-oriented”or “mar-ket-driven” (Grossand Kijewski 1988). It would seemthat periodic as-sessmentsof the value provided by a firm’s productoffering in a givencustomerapplicationwould be an essentialpartof the firm truly becom-ing, and staying,“market-driven.”Similarly, althoughtherehasbeenarecentemphasison value-addedservicesasa sourceof competitiveadvan-tagein businessmarkets,assessmentof the valueof presentor potentialaugmentingservicesreceivesjust 3.6%of the mentions.It maybe that foreachof thesesituations,managersrely on other, moreinformal waysofobtainingvalueestimatesfrom customers(and salespeople).

We observefrom Table2 that nearlyall of the value assessmentmeth-ods studiedhavebeen used to addresseachbusinessdecision. Althougheach methodmay have been mentionedat least once as being used toaddressa given businessdecision, somemethodsmay be more widelyusedthanothersfor given decisionapplications.To explorethis possibil-ity, a furtheranalysiswasconductedto determinethe smallestsubsetofmethodsthat would collectivelyaccountfor 80% of the mentionedappli-cationsfor eachbusinessdecision.Theresultsfor this analysisappearinTable3.

An interestingpatternof resultsemergesfrom Table 3. With the excep-tions of obtainingthe value of presentor potential augmentingservicesand to determinepricing, a subsetof five or fewer methodscapturesatleast80% of the reportedvalueassessmentapplicationsfor eachbusinessdecision.Focusgroupvalueassessmentis theonly methodthat appearsineachsubset,with othermethodsbeingin the most-widely-usedsubsetforonly one or a few kinds of businessdecisions.As an instanceof this,indirect surveyquestionsappearin the subsetfor only one businessdeci-sion— productmodificationor redesign,yet it is the most frequentlymen-tionedmethodfor addressingthis decision.Similarly, while benchmarksappearsin the most-widely-usedsubsetfor just threebusinessdecisions,itis the most frequently mentionedmethod for determiningpricing, alongwith focusgroupvalueassessments.

Although importanceratingsappearin thesubsetfor only four businessdecisions,this methodis the mostwidely usedfor threeof them:obtainingthe value of the presentoffering, designingmarketingcommunicationsand sales tools, and product positioning. For this last decision, it ac-countedfor 40.4%of the reportedmethodapplications,representingthelargest “share” of reportedmethodusageacrossany businessdecision.

JOURNALOF BUSlNESS-TO-BUSINESSMARKETING

TABLE 3

Value Assessment Methods Nose Widely Used

For Each Business Decision Application5

Internal engineeringassessment

Field value-in-useassessment

Focus group valueassessment

Direct surveyquestions

Importance ratings

Benchmarks

Conjoint analysis

Compositionalapproach

Indirect surveyquestions

New Product

~uiLu

20.91’

9.0

Applicationb

Value ofProduct PresentRedesirn QLfrxins

Value of Design ofAugmenting Marketingi~x~i&u Communications

15.61

15.6

17.8

19.4

11.1

7.5

83.71

(m — 67)

80.11

(m — 45)

8.01

16.0

~L~1

16.7

14.0

1L2

16.0

82.01

(m — 50)

50.01’

(m — 12)

11.51

26.9

11.5

84.51

(m — 26)

~n~b~A

Internal engineeringassessment

Field value-in-useassessment

Focus group value

assessment

Direct survey questions

Importance ratings

Benchmarks

Business Decision Application

Determine Product Demand~ri~ing ~nziLiflfliM £2~LU1LLU&

7.71

7.7

ZLZ

13.5

7.71

17.3

9.6

40.4

23.11

n&z

18

Business Decision

NewID~U~3ID~

14.31

iLi

21.6

14.3

Anderson, lain, and Chintagurna 19

Business Decision Application

Determine Product Demand Newf.Li~.in.g frLt.Li2flLflS £~.r±uj.~ing Investment

Conjoint analysis 15.4 7.7 23.1 14.3

Compositional approach

Indirect survey questions

86.71 82.71 84.71 92.91(in— 52) (in— 52) (3—13) Cm— 14)

tmFor clarity, percentages are only given for the smallest subset of methods that

collectively account for 801 of the mentioned applications (in) for each business decision.

bto conserve space, shortened headin&s for the business decisions given in Table 2 are

employed.

‘To be read as: TMlnternal engineering assessment was used for 20.91 of the 67 mentionedapplications of value assessment methods for the new product design business decision.

dUnderscored percentage indicates the most widely mentioned method used to address the

given business decision.

As each of the methods whose percentage is not listed for this application was mentionedonly a single time (8.31), only 501 of the mentioned applications are accounted for ratherthan 801.

Further, consistentwith the earlier resultson familiarity and usage,thecompositionalapproachdid not appearin the most-widely-usedsubsetforany businessdecision,theonly methodto not do so. We alsonotethat theabsenceof conjoint analysisfrom the subsetfor newproductdesignandproductredesignreflectsits lowerusagerelative to methodssuchasfocusgroupvalue assessmentsand internalengineeringassessments.

JudgedSuccess

The judged successof the value assessmentmethodsacrossbusinessdecisionsaddressedis presentedin Table 4, and the judgedsuccessofvalue assessmentmethodsin addressingeachbusinessdecisionappearinTable5. It appearsfrom thesetablesthat evenallowing for the subjectivenatureof judgingsuccessand the potentialbiasof the informants,applica-tions of these-methodsare almostnever “not successful.”Out of 331judgments,only threeapplications(.9%)wereconsideredto be not suc-cessful.Further,by a considerablemargin,applicationsof thesemethods


TABLE 4

Judged Success of Value Assessment Method (1)

PartlySuccessful

’

Internal engineeringassessment (u —

34)b

Field value-in-useassessment Cu — 32)

Focus group valueassessment Cu — 60)

Direct survey questions(u — 48)

Importance ratings

(u — 62)

Benchmarks (u — 28)

Conjoint analysis

(u — 34)

Compositional approach

(u — 8)

Indirect survey questions(u — 25)

44.1

28.1

30.0

33.3

24.2

32.1

14.7

25.0

32.0

Successful

55.9

71.9

70.0

66.7

75.8

67.9

85.3

75.0

68.0

alncludes sparse informant reports oftmnot successfuV’ (3 reports. .91)

bThe number of reported usages, u, is given in parens for each method.

arejudgedto be successful,ratherthan partly successful.Nonetheless,asubstantialnumberof applicationsarejudgedto be only “partly success-ful,” which alsomayrepresenta sociallyacceptableresponsefor applica-tions that havenot workedout asplanned(i.e.. “not successful”).

Consideringspecificresults,conjointanalysishasthe highestpercent-ageof judgedsuccessfulapplications(85.3%). So,when informantsuseconjoint analysis,it successfullyprovidestheanswersto thevalue-related

Anderson, Jam, and Chintagunza

TABLE 5

Judged Success of Value Assessment Methodsin Addressing Each Business Decisions (1)

Partly Successful

’

New product designor development (in —

67)b

Product modificationor redesign (in — 45)

Value of presentoffering (in — 50)

Value of present or potentialaugmenting services (in — 12)

Design of marketing communicationsand sales tools (in — 26)

Determine pricing (in — 52)

Product positioning and

competitive analysis (a — 52)

Demand analysis and

forecasting (a — 13)

New investment or businessentry (a — 14)

33.3

38.0

32.0

25.0

26.9

25.0

19.2

38.5

28.6

66.7

62.0

68.0

75.0

73.1

75.0

80.8

61.5

71.4

‘Includes sparse informant reports of “not successful” (3 reports, .91)

bThe number of mentioned applications

for each business decision.of value assessment methods, a. is given in parens

questionsthat theysoughtto address.Informantresponsesto thequestionon circumstancesunderwhich theywould not recommendusageof con-joint analysisprovidesomeinsighton why it is not usedmoreoften inbusinessmarkets.First, theydo not recommendits usagefor complicatedor abstractproductconcepts,which tendto occurmorefrequentlyin busi-

21

22 JOURNALOF BUSINESS-TO-BUSINESSMARKETiNG

nessmarketsthanconsumer markets.Second,they do not recommenditsusage“when the costof the researchis particularlyan issue,”which isconsistentwith our field depth interviews.8

Obversely,internal engineeringassessmenthas the lowest percentage(55.9%) of judgedsuccess,perhapsbecauseof the difficulties of inter-nally having sufficient knowledgeof the customerfirm’s actualusageofthe productoffering. Nonetheless,this method is usedby 42.5% of theindustrial firms in our sample.Further, the relatively greaterusageofinternalengineeringassessmentfor newproductdevelopmentandproductmodification mayexplain the relatively lower percentagesof judgedsuc-cessobservedfor thesebusinessdecisions.

Themost-widely-usedmethods,importanceratings,focusgroupvalueassessmentsand direct surveyquestions,are judged to be successfulin75.8%, 70.0% and 66.7% of their applications,respectively.However,the circumstancesunderwhich informantsrecommendanddo not recom-mend usageof thesemethodssuggestthat thesemethodsshould not beusedas“stand-alone”methods.To elaborateon this, focusgroupvalueassessmentsareperceivedto be mostuseful asa preliminaryvalueassess-ment method,particularlyat the conceptstageof productdevelopment,rather thanas a methodthat can be usedto conclusivelydeterminevalue.Importanceratings can be used to identify key attributesof a productoffering, but additionalratingsof the relative performanceof suppliersonthe attributesof the productofferingwould be neededto obtaina rankingof the value provided by the alternatesuppliers’ offerings. Finally, in-formantsrecommendusageof direct surveyquestionswhenquick, quanti-tative information is neededand for familiar, simple,non-technicalprod-ucts,but recommendthat in othersettingsit be used in conjunctionwithothermethods.

With respectto businessdecisions,we see from Table 5 that productpositioningand competitiveanalysisreceivedthe highest percentageofreportedsuccessfor value assessmentmethods(80.8%). On the otherhand,demandanalysisand forecasting,andproductmodificationor rede-sign received the lowest percentagesof reportedsuccesses(61.5% and62.0%,respectively).

Additional MethodsUsedto AssessValue

Threeadditionalmethodswerementionedby morethanone informant:field-depth interviews, field tests,and opportunityanalysis.Five infor-mantshavefound field-depth interviews,conductedateitherthecustomerfirm, tradeshowsor industry meetings,to be useful. Theseinformantsrecommendusageof field-depth interviews when the supplier firm has

Anderson, lain, and Chintagunta 23

less information and expertise,for very technicalproducts,andwhen therespondents are knowledgeable.

Five informantsassessvalue with field testsof sampleor prototypeproductofferings at selectedcustomerfirms. Theyrecommendusageoffield testingfor customerswith whom the firm hasa goodworking rela-tionship, for making go/no go decisions,and for assessingwhetherahigherperformanceproductthat improvesuponthe industrystandardalsomeetscustomerrequirements.Threeinformantsuseopportunityanalysis,sometimesreferredto asgapanalysis,to identify specificwaysto enhancethe value of the firm’s productoffering, relative to either competitiveofferingsor presentlyunmetcustomerrequirements,and recommenditsusagefor assessingthe value of servicesor complicatedindustrialprod-ucts.9

ProblemsNot AdequatelyAddressedbyPresentMethods

We limit our considerationof the problemsnot adequatelyaddressedbypresentmethodsto thosementionedby more than one informant.Most-widely-mentionedwas a concernabout the validity of resultsobtainedfrom presentmethodsin that respondentsmay be unwilling or unabletorevealthe “true” values.Next-most-mentionedproblemswerehavingthe“right” individuals in thecustomerfirms (i.e.,ultimatedecision-makers,end-users)asrespondents,and thatpresentmethodsaretoocostly.A finalproblemwasthatpresentmethodswork betterwith physicalproductsthanwith servicesor ‘soft” attributes.

Implications for ResearchandPractice

Drawingupon the findings of our study,someareasfor advancingthestate-of-practicecan be suggested.Our results indicatethat practitionerspresentlyrely uponsimpler methodsof customervalueassessment,suchasfocusgroupassessmentsor importanceratings.A challengefor market-ing academicsis to identify the circumstancesunderwhich the risks ofmaking incorrectinferencesbasedon usageof a simpler methodare ac-ceptable.Oneuseful researchtackwould be to conductcomparativestud-ies whereestimatesof valueareobtainedusingseveralmethodsof varying


complexity and cost.This would enabletriangulationof the methodsun-dervaryingcircumstances,to determinewhen theestimatesfrom the sim-pler methodsconvergeto thosefrom more complex methods.Further,informantsrecommendthat someof the simplermethodsnot be used asstand-alonemethods.Thus, anotherpotential result of this proposedre-searchmight be prescriptiveguidanceon the usageof particularmethodsin concert such that their potentialliabilities would be off-setting.

The problem with customervalue assessmentmethodsmost-widely-mentionedby informantsin our studywasconcernsabout the validity ofresultsobtained.That is, do value estimatesobtainedvia thesemethodsactually predict customerfirms’ marketplacebehavior?Concernsabouttheexternalor predictivevalidity of conjointanalysishavebeenexpressedelsewhere(Greenand Srinivasan1990; Wittink andCattin 1989), butourfinding suggeststhatvalidity assessmentsneedto be broadenedto includetheothervalueassessmentmethodsaswell.’0 Again, comparativevaliditystudiesare suggested,with marketingacademicsseekingthe cooperativeparticipationof industrial firms. After a suitableperiodof time, or suffi-ciently disguised,therelevantvalidity data(thevalueestimatesandactualpurchases)canbe published.

Two relatedproblemsthat havea direct bearingon validity of resultsfrom value assessmentmethodsarehaving the “right” individual, or in-dividuals,from a customerfirm act asparticipantsin thevalueassessmentresearch,and the ability of presentmethodsto effectively handle“soft”attributes.A critical issuein havingthe right individual participantis thatfor many product offerings in businessmarkets,multiple individualswithin a customer firm participate in the purchasedecision process(Bonoma 1982; Montgomery 1986). Understandingwhich individual isthe key decision-makercanbe a difficult task.Althoughmultiple partici-pantsfrom eachcustomerfirm canbe askedto provideassessmentsof thevalue of the productoffering, further researchis neededto betterunder-standhow thesemultiple estimatescanbe meaningfullyaggregatedinto afirm-level estimate(e.g.,Wilson, Lilien andWilson 1989).

Ourexploratoryresearchand the informant reportssuggestthat presentmethodshavedifficulty whenthe attributesbeingstudiedare“soft,” suchasservicesandlesstangibleperformanceattributes(e.g.,perceivedimagequality for x-ray film). Further researchis neededto suggestwaysto ef-fectively characterizeor capturethesekindsof attributes,suchasalterna-tive formsof stimuluspresentation(Anderson1987;GreenandSrinivasan1990). Researchis alsoneededto devisemethodsfor developingopera-tional definitions that “tangibilize” theseless tangible elements(e.g.,

Anderson, Jam, and Chintagunta 2S

attitude of customer service personnel) of the product offering (Levitt1981).

SUMMARY

Everythingis worth what its purchaserwill pay for it.

—Publilius Syrus,First Century,B.C.

Although this maxim hasexistedfor two millennia, gaining an under-standingof what customerswould be willing to pay for existingor poten-tial productofferings remainsa challengingtaskfor businessmarketers.We havestudied the state-of-practicewith respectto the usageof valueassessmentmethodsby firms in businessmarketsto gain estimatesof theworth of their productofferings. We found that nine different kinds ofbusinessdecisionsare addressedwith valueassessmentmethods,and thatresearcherstypically have preferencesfor a particularsubsetof the ninemethodsin addressingeachbusinessdecision.

Focusgroupvalueassessmentsand importanceratingsarepresentlythemost-widely-usedmethodsin businessmarkets.Conjoint analysis,whichis not as widely-used,has the highestjudgedsuccessof the nine methodsin addressingthe questionsthat the informants sought to answer. Al-thoughmost applicationsof thesemethodswerejudgedto havebeensuc-cessful,nonetheless,a substantialpercentageof applicationswerejudgedto beonly partly successful.Thus,thereremainsconsiderableopportunityto advancethe state-of-practicethroughresearchthat focuseson conduct-ing comparisonsamongmethodsandsubstantiatingthe validity of resultsobtainedfrom thesevalue assessmentmethods.

NOTES

1. Note that in this definition, we purposelyhave not specified the focalperspectivefrom which the worth of the offering is perceived.Customervalueassessment,by contrast,refers to the customerfirm as the focal perspectiveonperceivedworth. Further, in this definition, we regardbenefitsas “net” benefitsthat subsumecostsother than acquisition price (e.g., life-cycle costs)and use“received” to reflect performancein a given usageapplication.

2. The conceptof value,aswe havediscussedit, is quite different from thefundamentalpsychologicalconceptof values,such as the terminal valuesandinstrumentalvaluesdiscussedby Rokeach(1973). A methodhasbeendevelopedto studythe linkagesbetweenthe valuesthat consumershold and attributespos-sessedby productofferings(cf. ReynoldsandJamieson1985).Although it would

26 JOURNALOF BUSINESS-TO-BUSlNESSMARKETING

be interestingto generalizethis psychologicalconceptof valuesto the organiza-tional settingand considerhow an individual’s understandingof an organization’svalues affects his or her judgments of value for specific product offerings, this isbeyond the scope of the present paper.

3. For clarity of understanding to the respondents and meaningful interpreta-ion of the results,the operationaldefinition focusedon conjoint analysis as it is

most often employed, the full-profile stimulusconstructionwith a rating scaleorrank order response(cf. Wittink andCattin 1989).Provision was made for respon-dents to describeand evaluateother forms of conjoint analysis,such as hybridmodels(Green 1984), as additional methodsthat they usedto assesscustomervalue.

4. Some proportion of the 18% (1981-1985)and 13% (1971-1980)applica-tions reported by Wittink and Cattin (1989) as financial and otherservicescouldbeconsideredbusinessmarketingapplications,however.

5. Support for this explanation is providedby the recent finding of Kinnearand Root (1989) that industrial firms typically havemuch smallermarketingre-searchbudgetsthanconsumerfirms of equivalentsize. Montgomery(1986) alsodiscussesthe relativelygreatercostof conjoint analysisin businessmarkets.

6. The classificationof firms into thosethat servebusinessmarketsversusthosethat serveconsumermarketsis a difficult, if not an impossible,task.Ulti-mately, it becomesa matterof judgment. For example,althougha numberoffirms in the BusinessWeek Food Processingclassification(e.g., Heinz, Kraft)haveinstitutionalsales,we consideredthesefirms asprimarily servingconsumermarkets.Our intentwasto constructa samplingframethat wascomprisedof firmswhosecustomersof primaiy interestwere other firms or institutions, not con-sumers.

7. Relatively few informantsreportno longerusingone or moreof thevalueassessmentmethodsthat they haveused in the past.Seveninformantsreport nolongerusingbenchmarks,four informantseachno longer use focus groupsanddirect surveyquestions,and threeinformantseachno longeruseimportancerat-ings, conjoint analysisand the compositionalapproach.

8. Two recent developmentsin conjoint analysisare the commercialavail-ability of softwarepackagesand the usageof telephone-mail-telephonedatacol-lection approaches(Greenand Srinivasan1990; Wittink and Cattin 1989). Thehigh judgedsuccessfor conjoint analysistakentogetherwith thesedevelopmentssuggestgreaterfuture usageof this methodin businessmarkets.

9. Of the remainingadditionalmethodsmentioned,theonly noteworthyonewasthe usageof an experimentaldesignmethodby one informant.Samplesof thetarget audiencewere divided into two groups,with each shown the productatdifferent prices, andthen the purchaseintent was assessed.

10. See Montgomery(1986) for a discussionof the empirical support for theexternalor predictivevalidity of conjoint analysisin businesssettings.

Anderson, Jam, and chintagunta 27

REFERENCES

AdvertisingAge(1988). “Top 50 U.S. ResearchOrganizations,”May 23, 5-4.Anderson, James C. (1987),“The Effect of Typeof Representationon Judgments

of New ProductAcceptance,”IndustrialMarketingandPurchasing,2(2),29-46.

Bonoma, Thomas V. (1982), “Major sales:Who Really Does the Buying?,”Harvard BusinessReview,82 (May-June), 111-19.

BusinessWeek(1988), “The Top 1000 U.S.Companies,”April 15 special issue.Calder, Bobby J. (1977), “Focus Groups and the Nature of Qualitative Marketing

Research,” JournalofMarketingResearch, 14 (August),353-364.Cattin, Philippe and Dick R. Wittink (1982),“Commercial Use of ConjointAnal-

ysis: A Survey,”JournalofMarketing, 46 (Summer),44-53.Christopher, Martin (1982),“Value-In-Use Pricing,” EuropeanJournalofMar-

keting, 16(5), 35-46.Churchill, Gilbert A. (1987), MarketingResearch,fourth edition. Chicago:The

DrydenPress.Dodds, William B. and Kent B. Monroe (1985),“The Effect of Brand and Price

Information on Subjective ProductEvaluations,” in Advancesin ConsumerResearch, vol. 12, Elizabeth Hirschman and Morris B. Holbrook, eds. Provo,UT: Associationfor ConsumerResearch,85-90.

Forbis, John L. and Nitin T. Mehta (1981),“Value-BasedStrategiesfor Indus-trial Products,”Business Horizons, 24 (May-June),32-42.

Fortune(1988), “The Fortune 500 LargestU.S. IndustrialCorporations,”April25, D1-D54.

Green, Paul E. (1984), “Hybrid Models for Conjoint Analysis: An ExpositoryReview,”JournalofMarketingResearch, 21 (May), 155-69.

Green,Paul E. and V. Srinivasan(1990), “Conjoint Analysis in MarketingRe-search:New Developmentsand Directions,“Journal ofMarketing,54 (Octo-ber),3-19.

Green,Paul E. and V. Srinivasan(1978), “Conjoint Analysis in ConsumerRe-search:IssuesandOutlook,” JournalofConsumerResearch,5 (June),103-123.

Gross, Irwin and Valerie Kijewski (1988), “Is Your Company ‘MarketDriven’?,” Marketplace:The ISBMReview,Spring, 1-2.

Kinnear,ThomasC. and Ann R. Root, Eds. (1989), 1988 Surveyof MarketingResearch. Chicago:AmericanMarketingAssociation.

Levitt, Theodore(1981), “Marketing Intangible Productsand ProductIntangi-bles,” HarvardBusinessReview,81 (May-June),94-102.

Martilla, John A. and JohnC. James(1977), “Importance-PerformanceAnaly-sis,” Journal of Marketing, 41 (January). 77-79.

Monroe, Kent B. and R. Krishnan (1985), “The Effect of Price on SubjectiveProductEvaluations,”in PerceivedQuality, JacobJacobyandJerryC. Olson,eds.Lexington, MA: Lexington Books,209-232.

Montgomery,David B. (1986),“Conjoint Calibrationof theCustomer/Competi-


tor Interface in Industrial Markets,” in Industrial Marketing:A Gennan-Amer-ican Perspective,Klaus Backhausand David Wilson, eds. Berlin: Springer-Verlag, Inc., 297-319.

Perreault,William D., Jr. andLaurenceE. Leigh (1989),“Reliability of NominalData Basedon QualitativeJudgments,”Journalof MarketingResearch,26(May), 135-48.

Porter,Michael E. (1985), CompetitiveAdvantage, New York: FreePress.ThomasJ. ReynoldsandLinda F. Jamieson(1985),“ImageRepresentations:An

Analytic Framework,” in PerceivedQuality, Jacob Jacoby and Jerry C.Olson,eds.Lexington,MA: LexingtonBooks, 115-138.

Reuter,Vincent G. (1986), “What GoodAre Value Analysis Programs,”Busi-nessHorizons,29 (March-April), 73-79.

Rokeach,Milton (1973), TheNatureofHuman Values, New York: FreePress.Wilson, David T.. RobertJ. Corey,and Morry Ghingold (1990),“Beyond Cost-

Plus: A Checklist for Pricing Under Pressure,” JournalofPricing Manage-ment, I (Winter), 41-49.

Wilson, Elizabeth J., Gary L. Lilien, and David T. Wilson (1989), “SituationalFactorsand Formal Models of Group Choice in OrganizationalBuying: AContingencyParadigm,”ISBM Working Paper# 5-1989,PennsylvaniaStateUniversity.

Wind, Yoram (1990),“Getting a Readon Market-Defined‘Value’,” Journal oJPricing Management, I (Winter),5-14.

Wittink, Dick R. andPhilippeCattin (1989),“CommercialUseof ConjointAnal-ysis: An Update,”JournalofMarketing,53 (July), 91-96.

Zeithaml, Valarie A. (1988), “Consumer Perceptionsof Price, Quality, andValue: A Means-EndModel and Synthesisof Evidence,”Journal ofMarket-ing, 52 (July), 2-22.

Anderson,Jam, and Ghintagunta

Appendix

Informant Sample

Industrial Firms:

Fuels

Office equipment

Conglomerate

Aerospace

Steel

Chemicals

Leisure

Machinery

Aluminum

Paper

Electrical products

Semi -conductors

Drug & research

Auco parts

Lumber

Service industry

(bus mess publishing)

Telecommunications

Total

Number of

Infrxman~a

7

9

13

3

3

6

2

3

4

9

6

I

6

5

I.

1

1.

80

Marker Research Firms:

20 Informants representing 16 firms that do research on business markers. Allfirms were ranked in the top 40 marker research firms in the U.S.

29

Documents

ISBM REPORT 10-1993 - pdfs.semanticscholar.org REPORT 10-1993 Institute for the Study ofBusiness Markets ThePennsylvania State University 113 Business Administration Building II University