Corporate Social Performance, Analyst Stock Recommendations, and Firm Future Returns

Strategic Management Journal (2015) 36: 123-136

Posted: 19 Dec 2016

See all articles by Xueming Luo

Xueming Luo

Temple University

Heli C. Wang

Hong Kong University of Science & Technology (HKUST) - Department of Management & Organization

Sascha Raithel

Ludwig Maximilians University of Munich - Munich School of Management

Qinqin Zheng

Fudan University - School of Management

Date Written: 2015

Abstract

As consumers spend more time on their mobile devices, a focal retailer’s natural approach is to target potential customers in close proximity to its own location. Yet focal (own) location targeting may cannibalize profits on inframarginal sales. This study demonstrates the effectiveness of competitive locational targeting, the practice of promoting to consumers near a competitor’s location. The analysis is based on a randomized field experiment in which mobile promotions were sent to customers at three similar shopping areas (competitive, focal, and benchmark locations). The results show that competitive locational targeting can take advantage of heightened demand that a focal retailer would not otherwise capture. Competitive locational targeting produced increasing returns to promotional discount depth, whereas targeting the focal location produced decreasing returns to deep discounts, indicating saturation effects and profit cannibalization. These findings are important for marketers, who can use competitive locational targeting to generate incremental sales without cannibalizing profits. Although the experiment focuses on the effects of unilateral promotions, it represents an initial step in understanding the competitive implications of mobile marketing technologies.

Keywords: mobile commerce, mobile targeting, competitive targeting, locational targeting, randomized field experiment

Suggested Citation

Luo, Xueming and Wang, Heli and Raithel, Sascha and Zheng, Qinqin, Corporate Social Performance, Analyst Stock Recommendations, and Firm Future Returns (2015). Strategic Management Journal (2015) 36: 123-136. Available at SSRN: https://ssrn.com/abstract=2887396

Xueming Luo (Contact Author)

Temple University ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

HOME PAGE: http://www.fox.temple.edu/mcm_people/xueming-luo/

Heli Wang

Hong Kong University of Science & Technology (HKUST) - Department of Management & Organization ( email )

Clear Water Bay, Kowloon
Hong Kong

Sascha Raithel

Ludwig Maximilians University of Munich - Munich School of Management ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Qinqin Zheng

Fudan University - School of Management

No. 670, Guoshun Road
No.670 Guoshun Road
Shanghai, 200433
China

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