April 2011: Vol. 6, Issue 4
Marketing Monthly Marketing Research Camp April 1, 2011
Research Advances in Marketing was the topic of our sixth annual Marketing Research Camp, held April 1. The purpose of the Camp is to bring together scholars engaged in exciting research topics in marketing and serve as a platform for the intellectual advancement of marketing. Following is a report on the speakers along with an executive summary of their talks. Gary Frazier (Richard and Jarda Hurd Chair in Distribution Management and Professor of Marketing, Marshall School of Business, University of Southern California, and Editor-in-Chief, Journal of Marketing) led off the day with a talk about “Contracts, Extra-Contractual Incentives, and Ex Post Behavior in Franchise Channel Relationships.” Executive Summary: Inherently, franchise and franchisee relationships are fraught with challenges. There may be a franchise control problem, where franchisees may have an incentive to maximize their own profit at the expense of the franchise. As a result, franchisors attempt to prevent these problems through
Why is this little boy so happy? See page 13.
TAMU’s Ram Janakiraman and USC’s Gary Frazier take time out from discussion to pose for a picture.
contract formulation. However, some problems relating to these contracts are the following: (1) No contract is complete (2) Monitoring can be counterproductive (3) There may be selective enforcement issues. To help overcome these constraints, there are a number of governance behaviors that can be undertaken to manage franchisee relationships after the start of the relationship; namely behavior monitoring, output monitoring, and enforcement. The authors look at the combinations of these governance mechanisms and the resulting effects on franchisee opportunism and compliance in the context of the US auto industry. They conclude that none of the governance mechanisms used in isolation helped to reduce opportunism or to elicit compliance. In fact, when behavior monitoring is performed alone, it actually reduces franchisee compliance levels. Their empirical results show Continued next page
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