This study aims to gain insights into consumers’ motivations when purchasing mimics of luxury cosmetics goods and their evaluation towards mimicry products. Consumers’ desire for mimicry luxury cosmetics hinges on their motivations underlying their consumption of luxury cosmetics. Attitude functions are applied to measure consumers’ underlying motivations towards luxury products. Consumers’ attitude and familiarity with luxury cosmetics and mimicry cosmetics also influence their choice between luxury brands and mimicry brands. In addition, consumers’ personality factors and perceived risk of purchasing mimicry cosmetics and their brand loyalty towards the original luxury brands restrain their purchase intention of mimicry brands. Finally, the study examines the effect of products conspicuousness (private/public visible goods) and the effect of mimicry types (feature/theme) on consumers’ preferences on concerning mimicry consumption. The findings will provide insights for policymakers, brand managers, and academics, and better understand mimicry in the luxury cosmetics industry.

Firms cooperate not only with complementary partners such as their suppliers and customers, but also increasingly with their competitors which can result in a simultaneous pursuit of cooperation and competition – coopetition (Brandenburger and Nalebuff, 2011). Coopetition is a paradox as it involves firms interacting with two contradictory logics – cooperation and competition, which their contradictory, yet interrelated, demands seem logical in isolation, but absurd and irrational when appearing simultaneously (Peng et al., 2017). The extant research on the role of the competitor as an NPD partner also throws conflicting results; positive and negative NPD performance. This variance could be related to the firm’s internal capability to manage the partnership in NPD activities. This research aims to investigate these issues: Part I examines ‘the paradox of coopetition’ by investigating how firm’s experience of coopetitive relationship influence on firm’s coopetition capability. Part II investigates the key antecedents and outcomes of coopetition capability on the competitor partnership for new product development. The findings suggest a balanced-strong coopetition and alliance management capability are useful to build coopetition capability. In turn, coopetition capability has direct and indirect effects on NPD performances.

Over the last several years, the growing accessibility of VR has shifted its application from military and aviation to education as it provides the capability to create immersive learning experiences (Buń et al., 2017). However, VR simulations have mostly been used in the educational curriculum of “hard sciences” or the STEM disciplines (for a review, see Merchant et al., 2014). Most notable educational applications of VR have been used in medicine and science (e.g., Arora et al., 2014; Lindgren et al., 2016). This study develops and tests a VR marketing simulation designed for a second-year marketing unit at an Australian university. Within their respective tutorials, 150 students will experience the simulations and tutorial presentation on a pre-assigned topic in their marketing curriculum. A within-subject experimental design will be adopted to examine the feasibility of the simulation, which is measured by : (1) immersion; (2) e-learning enjoyment; (3) learning self-efficacy; (4) learning attitude; (5) intention to use; (6) student engagement; and (7) knowledge-based learning performance.

Satisfaction paradox indicates customer satisfaction does not necessarily translate into customer repurchase. Competitor’s attractiveness and customer demographics are two main moderators for the paradoxical phenomenon. Competitor’s attractiveness exhibits customer switching effect, whereas customer demographics imply customers moored with their current service provider. Still, the cases were few investigated in B2B settings where customers are in general more complex than consumers as involving more intricate organizational network influences. In a business network, transactions may incur buyer/seller relational activities that mitigate paradoxical behavior. Nonetheless, the variable is yet identified and the interacting effects between the moderating variables are not clarified. Thus, this study aims to develop an operational model to classify satisfied customers into loyal, moored and paradoxical segments using three genres of moderators: competitor’s attractiveness, organizational and transactional variables in a B2B setting. In the model, the theoretical bases of switching behaviors are applied for four statistical analysis executed in a logic sequence, including a factor analysis to consolidate quality measurements, a quadrant analysis to locate the effect of competitor’s attractiveness, a clustering analysis to segment satisfied customers into four segments, and finally, nonparametric tests to validate the organizational and transactional segmentation variables. Empirically, we study Taiwanese manufacturers who engaged in global trade and have had experiences in choosing the global air express services that form an oligopolistic market and a strategic group so competitor’s attractiveness can be better calibrated. A total of 180 valid samples are collected and analyzed. The results contribute to the literatures of B2B service marketing.

Despite the rise of digital media, trade shows have not lost their importance within the marketing mix. However, to this date, their specific impact has been hard to measure. To address this gap, this article aims to investigate the outcomes of knowledge creation, sharing, and acquisition occurring at trade shows by utilizing Return on Trade Show Information (RTSI) model (Bettis-Outland et al. 2010). The analysis supports the findings of Bettis-Outland et al. (2012) as well as shows that information quality has a positive impact on information dissemination and information, which then increases the value of this information.

Introduction An important decision that a manufacturer has to make in distributing a product to customers is the degree of forward channel integration (Aulakh & Kotabe, 1997; Coughlan et al., 2001; John & Weitz, 1988). Transaction cost economics (TCE) developed by Williamson (1975, 1985, 1986, 1999) has been one of the leading theoretical frameworks used to explain the channel integration decision (Frazier, 1999; Watson et al., 2015). TCE is generally a theory for explaining the choice of an efficient governance structure in transactions and includes asset specificity, uncertainty, and frequency as its explanatory variables. According to Williamson (1985, 1986, 1999), much of the explanatory power of TCE is driven by asset specificity. TCE-based channel integration studies argue that as asset specificity increases, firms are expected to increase the degree of channel integration. This study proposes to extend existing research in four important ways. First, existing studies have not examined individual dimensions of asset specificity. This study examines two important dimensions discussed by TCE: human asset specificity and physical asset specificity. Second, existing studies have tended to measure asset specificity in a particular way (i.e., with a particular set of questionnaire items). This study examines the robustness of the estimated asset specificity-integration relationship to alternative measures of asset specificity. Third, existing studies have focused on firms in one country such as the United States, Canada, or Germany. This study empirically examines the roles and relative importance of human and physical asset specificity in channel integration in two countries with different cultures, the United States and Japan. Fourth, existing studies have not investigated the possibility of endogeneity between asset specificity and channel integration. This study tests whether asset specificity is endogenous in explaining channel integration through an instrumental variables and two-stage least squares (IV-2SLS) approach. Literature Review In the context of distribution channels, asset specificity refers to the extent to which durable, transaction-specific investments in human and/or physical assets are needed to distribute the product in question (John & Weitz, 1988; Klein et al., 1990; Shervani et al., 2007). Examples of such investments include (1) the time and effort employed to acquire the firm-specific, product-specific, and customer-specific knowledge needed for distribution activities, and (2) specialized physical equipment and facilities (e.g., warehouses, deliver vehicles, refrigeration equipment, demonstration facilities, and repair and service centers) (Anderson, 1985; Bello & Lohtia, 1995; Brettel et al., 2011a, 2011b; John & Weitz, 1988; Shervani et al., 2007; Williamson, 1985, 1986). According to TCE, when the assets needed to distribute a product are non-specific, the use of independent channels is a priori more efficient than the use of integrated channels based on the benefits of distribution specialists and competition in the market place (Anderson, 1985). Conversely, a high level of specific assets, whether human or physical, has important implications for the degree of channel integration. The primary consequence is to reduce a large number of relationships between a manufacturer and independent channel members to a small number of relationships, which may expose the transaction in question to opportunistic behavior. Because the unique productive value created by a high level of specific assets makes it costly to switch to a new relationship, the use of independent channels will not be effective as a safeguard against opportunism (John & Weitz, 1988; Shervani et al., 2007). Channel integration provides a safeguard against opportunism by permitting (1) the better monitoring and surveillance of integrated channels relative to independent channels, and (2) the reduction of profits from opportunistic behavior since employees in integrated channels do not ordinarily have claims to profit streams (John & Weitz, 1988). As a result, as asset specificity increases, manufacturers are expected to increase the degree of channel integration to exercise greater control over the channels (John & Weitz, 1988; Shervani et al., 2007). This leads to the following basic TCE hypothesis concerning asset specificity and channel integration: TCE hypothesis. Asset specificity will be positively related to the degree of channel integration. Existing studies of channel integration tend to provide support or partial support for the hypothesized positive relationship between asset specificity and channel integration. One limitation of key studies is that they have not fully explored the dimensions of asset specificity because they treat asset specificity as unidimensional or examine only one dimension of asset specificity. Specifically, Anderson and Schmittlein (1984), Anderson (1985), Anderson and Coughlan (1987), and Krafft et al. (2004) focus on human asset specificity. While John and Weitz (1988), Shervani et al. (2007), and Brettel et al. (2011a) consider both human and physical asset specificity in their theoretical discussions, their empirical analyses focus only on human asset specificity. Klein et al. (1990), Aulakh and Kotabe (1997), and Brettel et al. (2011a) use a single measure of asset specificity that contains distinct items measuring human and physical asset specificity. Importantly, none of these studies has examined the dimension of physical asset specificity while controlling for the impact of human asset specificity. These observations suggest that further research is needed that explicitly measures and evaluates the relative importance of human and physical asset specificity in the channel integration decision. Research Hypotheses Based on the above literature review, we seek to extend existing research by distinguishing between two types of asset specificity, human and physical asset specificity. As already explained, TCE and TCE-based channel integration studies argue that both human and physical asset specificity are positive drivers of the degree of channel integration. Thus, our research hypotheses are the following: Hypothesis 1. Human asset specificity will be positively related to the degree of channel integration. Hypothesis 2. Physical asset specificity will be positively related to the degree of channel integration. Research Methodology As shown in Table 1, previous empirical studies attempt to test the basic TCE hypothesis concerning asset specificity and channel integration using (1) a particular measure of asset specificity, (2) data from a single national survey of firms in the United States, Canada, or Germany, and (3) methods such as an ordinary least squares (OLS) regression analysis and a partial least squares structural equation modelling (PLS-SEM) approach. In contrast with these studies, we seek to test the above two hypotheses concerning two types of asset specificity and channel integration using (1) different measures of asset specificity, (2) data from parallel national surveys of firms in two countries with different cultures, the United States and Japan, and (3) the methods used in prior empirical analyses and an IV-2SLS approach, which is a widely accepted method for investigating the potential endogeneity problem of focal explanatory variables (Antonakis et al., 2010, 2014; Zaefarian et al., 2017). This research strategy is partly based on the guidelines for high-quality replication studies articulated by Bettis et al. (2016b). The aims are to assess the generalizability of important prior results using different survey data drawn from different research contexts and to assess the robustness of these results using different measures and methods, thereby providing important additional evidence that contributes to the establishment of repeatable cumulative knowledge (Bettis et al., 2016a, 2016b). We developed the survey questionnaire in several steps. Following John and Weitz (1988), Shervani et al. (2007), and Brettel et al. (2011b), the dependent variable, channel integration, was operationalized by the percentage of sales through direct channels. We measured the focal explanatory variable, asset specificity, in four ways: (1) a four-item scale of human asset specificity used by Shervani et al. (2007), (2) a four-item scale of physical asset specificity based on Bello and Lohtia (1995) and Klein et al. (1990), (3) a six-item scale of human and physical asset specificity used by Klein et al. (1990), and (4) a four-item scale of human and physical asset specificity used by Brettel et al. (2011a). We also included four control variables: environmental uncertainty, behavioral uncertainty, financial performance, and channel members’ capabilities. Based on existing studies, manufacturers of electronic and telecommunication, metal, and chemical products in industrial (business-to-business) markets were selected as the setting for the empirical test. The unit of analysis was the domestic channel integration decision made at a product-market level. Respondents were sales/marketing managers (or executives) knowledgeable about channel design and strategies. In the United States, a professional marketing research company administered the data collection. In Japan, respondents were surveyed by mail. In total, we obtained 235 usable responses from US managers and 279 responses from Japanese managers. Results and Conclusions Following similar studies (John & Weitz, 1988; Shervani et al., 2007), an OLS regression analysis was used to test the hypotheses. The results, shown in Table 1, exhibit significant explanatory power for each model. As expected, (1) human asset specificity exhibits significant positive relationships with the degree of channel integration in both the United States and Japan (Models 1 & 2). These findings support Hypothesis 1. Conversely, (2) physical asset specificity does not have the expected significant positive relationships with the degree of channel integration in both the United States and Japan (Models 1 & 3). These findings do not support Hypothesis 2. Also, (3) asset specificity (Klein et al., 1990) and (4) asset specificity (Brettel et al., 2011a), two composite measures of human and physical asset specificity, exhibit the expected significant coefficients (Models 4 & 5). Additionally, we conducted a similar analysis using a structural equation modelling approach. The results mirrored those of OLS regression, thus providing further support for it. To assess the problem of potential endogeneity between asset specificity and channel integration, we employed IV-2SLS. We used (1) the level of the product’s technical content and (2) the need for coordination between production and distribution activities as instruments for human/physical asset specificity. Our instruments were individually significant predictors of asset specificity and met the exclusion restriction. However, the endogeneity test revealed no evidence of endogeneity. Thus, asset specificity was treated as exogenous in the model. In summary, our preliminary results suggest that human asset specificity, not physical asset specificity, is relevant to the channel integration decision. This finding is significant in that TCE-based channel integration studies tend to measure only one type of asset specificity. We are currently conducting additional analyses to better understand the relationship between human and physical asset specificity, for example, (1) the effects of human and physical asset specificity on different kinds of direct distribution, and (2) a multiple equation model in which human asset specificity is a function of physical asset specificity and direct distribution is a function of both human and physical asset specificity. We believe that our results will have important implications for the ways in which managers approach the channel integration decision.

Brand love has received considerable attention in the past few years. This study focuses on social adjustive as a potential antecedent of brand love. This study also examines the contingent roles of brand love and brand identification in the relationship between social adjustive and brand relationship outcomes such as brand loyalty and positive word of mouth (WOM). Findings reveal that social adjustive is significantly related to brand love and brand relationship outcomes; and that brand love partially mediates the relationship between social adjustive and brand relationship outcomes. Further, brand identification is found to elevate the positive relationship between social adjustive and brand love, but not between social adjustive and brand relationship outcomes. These results lead to several theoretical and managerial implications.

Anecdotal evidence suggests that incidents like the recall of the exploding Samsung Galaxy 7 phones drive owners of other (competing) brands to experience and express feelings of joy when a rival brand fails (e.g., “the hottest phone in the streets!”). Although consumers sometimes experience brand-related schadenfreude—that is, joy out of other brand’s failure—, psychological processes driving schadenfreude are not clearly understood (Hickman & Ward, 2007; Van Dijk, Van Koningsbruggen, Ouwerkerk, & Wesseling, 2011). We propose that schadenfreude may be elicited by consumers’ tendencies to stand by their choices (Ye & Gawronski, 2016). We demonstrate that consumers show higher levels of schadenfreude if their choice is disconfirmed; for example, by a comparative product review that evaluates their chosen brand to be inferior to a rival non-chosen brand. Furthermore, this effect is moderated by the popularity of the chosen brand and mediated by feelings of self-threat. Moreover, we show that this effect is stronger for narcissists. We also find evidence that schadenfreude is a means for consumers to reaffirm their sense of self after they experience a self-threat induced by the disconfirmation of their choice.

In recent years brands have come under the spotlight for delivering unique and authentic brand experiences. Consumers find themselves looking for brands that add experiential value to their daily life, from a sensory, behavioral, intellectual and relational perspective (Brakus et al., 2009). Moreover, there is a growing demand for brands that are able to deliver their brand promise authentically (Morhart et al., 2015; Schallehn et al., 2014). On this background, our research was conducted in order to examine the role of brand experience and brand authenticity in generating brand love. In addressing this issue, the present study attempts to perform a test on research hypotheses by empirically validating the proposed conceptual model in a cross-country context (Japan and Portugal) for the brands Apple and Samsung. Additionally, it analyses the moderating effect of self-authenticity in relation to brand experience and brand authenticity. Data collection was done using a structured questionnaire to final consumers, who are owners of Apple and Samsung devices. A total of 574 valid questionnaires were collected regarding Apple brand (Japan = 300; Portugal = 274). Following the testing of the structural equation model, results demonstrate the correlation between brand authenticity and brand experience and show that the greater the self-authenticity, the higher is the effect of brand authenticity on brand love. It is worth noting however that the direct and moderating effects are different for Apple and Samsung in Japan and Portugal. This accounts for the cultural differences in how consumers perceive the experiential and authentic brand value propositions and how they relate emotionally to brands. Our study also provides important managerial implications by helping brand managers to understand how to drive passionate and intense feelings towards brands and to target consumers who are looking for compelling, meaningful and authentic brand experiences.

Introduction The concept of brand equity has been receiving considerable interest from academia and practice in the past decades. While mutual understanding exists on the importance of establishing high-equity brands, less agreement among academics and practitioners prevails regarding its conceptualization and operationalization. Many approaches have been proposed to measure brand equity in academic literature and numerous competing companies such as Millward Brown, Interbrand, or Young & Rubicam offer commercial metrics and brand evaluations, which are likely to estimate different values to a specific brand. This study reflects a consumer-based perspective on brand equity, which resides in the heart and mind of the consumer and captures the value a brand endows beyond the attributes and benefits its products imply. Growing calls for the accountability of marketing has resulted in increasing interest in marketing metrics, which includes mind-set metrics to address the “black box” between marketing actions and consumer actions in the market. Theoretical Development One of the most prominent conceptualizations of brand equity is based on the premise that brand equity is “the differential effect of brand knowledge on consumer response to the marketing of the brand” consisting of brand awareness and brand image as the predominant dimensions that shape brand knowledge. In this model, a crucial role is ascribed to consumer’s associations with a brand as a reflection of its image. Accordingly, brand building and differentiation is based on establishing favorable, strong, and unique associations. Human associative network theory is a widely accepted concept to explain the storage and retrieval of information and has been largely applied in the context of brands. Associative network theory suggests that brand information is stored in long-term memory in a network of nodes that are linked to brand associations such as attributes, claims or evaluations. Consumers use brand names as cues to retrieve associations. Once cues activate corresponding nodes and consumers retrieve information from memory, the activation spreads to related nodes. Consequently, a transfer of associations can also occur through associative chains in a process of attitude formation. Consumer response to a brand can be of attitudinal and behavioral character and research on attitudes supports the general notion that both, affective and cognitive structures, explain attitude formation. The predictive properties of attitudes regarding actual behavior have been acknowledged by prior research and the attitude-behavior relationship has been established. Research Design Operationalization of Brand Equity This study distinguishes between attitudinal and behavioral measures of brand equity. The behavioral measures of brand equity should reflect the attitudinal brand equity components in predicting product-market outcomes. High brand equity should lead to a willingness to pay a price premium, purchase intention and willingness to recommend. Survey Brand equity measures are tested with two waves of data collection2 from online surveys conducted in 2015 and 2016. Respondents were recruited from a professional panel provider to ensure that the same respondents participated in wave two after a year from the first wave. Participants were selected according to a quota regarding age and gender to increase representativeness and were then randomly assigned to one of the three industries beer, insurance, and white goods capturing brand equity from different perspectives and allowing for a more holistic view. Sample The sample for the first wave consists of 2.798 respondents. The sample was matched with the response from wave two and only those respondents were selected who participated in both waves. Given the panel mortality rate, the final sample size for longitudinal analysis is 1.292 observations. The respondents’ age ranges from 18 to 74 with 52 percent being male and 48 percent female. Analysis Panel regression is used to estimate models assessing the relative importance of various brand equity metrics regarding the three outcome variables for the three categories included. The results suggest that no universal brand equity metric dominates that can be applied to predict behavioral outcomes across categories. Yet, category-specific brand equity metrics prevail across outcomes. Consumers seem to evaluate a strong brand as an entity they can personally connect to in the insurance category. In the beer category, consumers’ evaluation of strong brands reflects deep affect and the perception of product quality. High equity brands relate to loyal consumers with strong affective evaluations in the category of durable household products. Moreover, the results indicate that brand equity measurement can be simplified to a small subset of metrics without risking loss of model fit and predictive power. Discussion While a plethora of brand equity metrics exists, the results of this study suggest that brand managers can apply a small subset of available metrics to track their brands’ equity and predict behavior without implementing long surveys that require considerable time and effort from increasingly overloaded consumers. Yet, adjustments to the composition of brand equity metrics might be inevitable in light of category-specific effects. Moreover, the results reveal that a consideration of metrics capturing affective components such as brand self-connection and deep feelings such as brand love is indispensable for brand equity measurement. Including emotional measures and extending established brand equity metrics that are deeply rooted in extant research might provide a considerable advantage when it comes to measuring brand value in different product categories. References are available upon request.

Marketing becomes more and more data driven and hence enables machine learning to empower instruments to foster the interaction between firms and consumers to a new level of customization. Replacement and redirection of workforce through machine learning powered devices is not anymore a mere myth (Huang and Rust 2018). Adaption of machine learning has remained low in the recent years even though disposability was given. Nevertheless the acceptance and the implementation of machine learning based marketing efforts experience currently an exponential increase (Syam and Sharma 2018). In this article, the authors aim to develop a stronger understanding of machine learning in the context of marketing as well as to provide an overview about already established usage and implementation of machine learning in the interactions between firms and customers. To achieve this objective, the authors discuss and study machine learning in marketing from both the management and the consumer perspective. This is supported by survey data retrieved from managers out of varies industries as well as consumers, which reveal great variety in usage of machine learning not only among different marketing activities but also among industries. The authors examine the roots of machine learning in marketing and evaluate inferential state-of-the-art instruments. Predictions of what can and will evolve in the marketing context with the help of machine learning in the near future are also connected with concerns and safety issues related to the increasingly transparent consumer-firm-relationship. To conclude, the article the authors present a summary of state-of-the-art mechanisms in machine learning in marketing and propose a research agenda for upcoming research.

Markets are changing more quickly than ever and marketing managers are increasingly puzzled as to how to achieve marketing excellence. Marketing excellence represents a target state for firms with respect to the design, structure, and coordination of all marketing activities that enables sustainable superior performance. However, little research has scrutinized marketing excellence and the existing literature lacks an overarching theory as well as empirical insights. Thus, the knowledge is scarce with respect to how firms can attain marketing excellence. In addressing this neglect, the authors develop an integrative theory of marketing excellence by adapting the cognitive–affective personality system theory to the organizational context. In particular, this study conceptualizes marketing excellence in terms of five dimensions: functional, structuring, cultural, relational, and change capabilities. By integrating field-based insights of 39 high-ranking executives with supplementary literature, the authors specify each of these capabilities in terms of various actionable elements. All dimensions and elements, along with their mutual relationships, are consistently embedded in the marketing excellence theory, thus offering a coherent and comprehensive framework for researchers and practitioners in their search for marketing excellence.

Many commercial vendors provide brand valuation measures, which have important practical implications for many stakeholders on how brands are bought and sold and how they are managed. These commercial measures, however, differ to a great extent from one another, which raises serious concerns about their accuracy. In this study, we assess the measurement properties of brand valuation measures provided by the four dominant commercial vendors: Interbrand, Brand Finance, Millward Brown, and Corebrand. We find that the brand valuation measures from the four commercial vendors measure the same underlying construct in a reliable and valid way according to established psychometric test methodology. However, it appears that they measure a construct that does not predict actual brand transaction prices well. In most cases, they significantly overestimate the transaction price. The magnitude of systematic bias varies by method and industry. Our results suggest that an upward bias is more likely to occur in situations when the relevance of tangible assets and non-brand intangible assets is high. These empirical findings challenge current practical and academic thinking on brand valuation. A main conclusion is that brand valuation for transaction purposes needs to first value all assets of the company in their totality and then allocate a fair share to the brand.

Corporate reputation – the central antecedent of trust – bears the potential to create sustainable competitive advantage. However, far too many examples of companies’ socially irresponsible behavior over the past years led to a severe crisis of confidence. Disgraced companies suffer from the adverse effects of their misbehaviors at all levels. As a consequence, one of the top priorities for both practitioners and business scholars is the identification of opportunities to (re)build corporate reputation. Corporate Social Responsibility (CSR), a key driver of reputation perceptions, is a very promising one. However, as CSR is a multidimensional construct that comprises a wide range of activities, the selection of the “right” ones deems a major challenge. Based on a literature review, we advocate that news media data should be utilized to analyze which CSR dimensions are particularly likely to affect reputation perceptions. As journalists rely on companies’ press releases as a starting point for their business articles, companies need to carefully evaluate which CSR dimensions they emphasize in their communication strategy. Based on superior measures of reputation and CSR, this study utilizes reputation and news media coverage data on companies listed in the German DAX30 between 2005 and 2011. The panel data regression encompasses the multidimensional concept of CSR, presenting a six-dimensional CSR construct including environment, employee relations, community, product issues, corporate culture and corporate governance. Relevant moderating variables, namely firm and stakeholder characteristics, are investigated. In this context, the results show that the relevance of each of those six distinct dimensions differs for the formation of reputation judgements and varies across investigated stakeholder and company types: across all model specifications, negative media coverage addressing employee relations and community affects reputation perceptions. The general public primarily perceives negative news coverage as relevant for their reputation judgements. Opinion leaders seem to be less dependent on the media to learn about CSR dimensions, as only four out of twelve independent variables exert a significant impact on their reputation judgments. News coverage about product issues only constitutes a key role in the formation of reputation judgements of firms that are predominantly known from direct experiences. A particularly large amount of variation can be explained for reputation ratings of these companies as well as for reputation perceptions of opinion leaders.

Introduction Recent years have witnessed a rapid growth in peer to peer (P2P) sharing-service businesses such as Uber and Airbnb. In P2P sharing-service businesses, goods or services are provided by customers (peers) rather than by service firms, who act simply as an intermediary between customers. One customer acts as a service-providing customer (SPC), and the other as a service-receiving customer (SRC). P2P sharing-service firms have no direct control over an SPC’s quality of service provided to an SRC. Further, both SPCs and SRCs are customers to the firm, and therefore firms are concerned with the quality of service provided not only to SRCs but also to SPCs. In the P2P sharing-service context, particularly in the case of services serving the needs of diverse travelers (e.g., Uber or Airbnb), SPCs and SRCs can be people of different genders and races, which can cause them to feel socially distant from each other. Since SPCs are not professional service employees, they may not know how to cope with the social distance, which can result in uncomfortable service experience for both SPCs and SRCs. The more similar to the SPC an SRC feels, the more comfortable the SRC is likely to feel, which can lead to higher service satisfaction. Yet, few studies examined how such social distance can be reduced. This study is intended to fill this gap in the research. Specifically, we propose that an SPC’s form of address for SRC can moderate the effect of the incongruence in gender and race on an SRC’s perceived social distance. Theoretical Development Social distance refers to the level of acceptance people have of others outside of their own social group or class (Bogardus, 1928). It is a measure of perceived difference (or distance) between groups. In the context of the P2P sharing service, SRCs and SPCs can be from diverse social groups. When an SRC encounters an SPC from a social group that is different from theirs, the SRC can feel socially distant from the SPC. Immediate differences an SRC can identify upon meeting an SPC is demographic such as gender, age and race. In this study, we first propose that the difference (incongruence) in gender, age and race makes an SRC feel socially distant from an SPC. Social distance is closely related with similarity (Osbeck & Moghaddam, 1997; Liviatan, Trope & Liberman, 2009). In the context of mentoring, the higher the perceived and actual similarity a portage feels with a mentor, the higher the level of the portage liking and satisfaction for the mentor and with the mentoring service (Ensher, 1997). Matching gender and race between a mentor and a portage positively influenced self-reported grade point average, efficacy and confidence of a portage (Blake-Beard et al. 2011). Race was well demonstrated to influence social distance (Triandis & Triandis, 1960). Taken together, we conjecture that the effect of the difference in gender and race on social distance will apply to the P2P sharing service context and propose the following hypothesis: H1: The incongruence in gender and race between an SRC and an SPC will make SRCs feel more socially distant from SPCs compared to the case of congruence. We propose in this study that the form of address for SRCs by SPCs can influence the level of social distance SRCs feel because of the incongruence in gender and race. The relationship between forms of address and social distance has been proposed (Brown, 1965). Intimate terms of address is associated with intimate relationship. Intimate terms of address is inversely proportional to social distance (Keshavarz, 2001). Calling someone by the first name is related with friendliness (Brown, 1961). The use of first name is positively associated with closeness in relationship (Brown, 1965). An empirical study in the healthcare context showed that most patients preferred to be addressed by the first name (as opposed to last name) (Gillette, Filak & Thorne, 1984). Taken together, we propose the following: H2: Intimate forms of address by the SPC for the SRC will reduce the level of social distance caused by the incongruence in gender and race. We propose that the level of perceived social distance influences the level of comfort SRCs feel with the SPC during the service delivery. The negative effect of social distance on the level of interaction comfort has been shown (Paswan & Ganesh, 2005). In the context of service encounters where customers feel cultural differences, psychological distance was shown to influence comfort negatively (Weiermair, 2000). Since social distance is a dimension of psychological distance (Trope & Liberman, 2011), we propose the effect of social distance on comfort as following: H3: Reduced social distance will lead to a higher level of comfort. The effect of social distance on comfort can vary by customers. In this study, we propose that the effect is moderated by the customer’s motive for the purchase of the P2P sharing service. There are largely four movies for customers who participate in collective consumptions (i.e., sharing service): economic motive, social motive, hedonic motive, and the motive to reduce risks and responsibilities (Benoit, Baker, Bolton, Gruner & Kandampully, 2017). Economic motives are associated with reducing expenses, and social motives are with meeting other people (e.g. more authentic travel) (Benoit et al., 2017). Hedonic motives are related with “accessing products that are exciting or normally out of reach” while motives to reduce risks and responsibilities are related with “no burdens of ownership, option to preview a product for potential purchase” (Benoit et al., 2017). According to a research in the context of P2P accommodations, cost saving, familiarity, trust, and utility are determinants of satisfaction with a sharing option. Thus, we propose that customer motives moderate the effect of social distance on comfort (Möhlmann, 2015). H4: The effect of social distance on comfort vary by customer motives for purchase. When feeling comfortable, people are more likely to trust, feel satisfied, and commit themselves, which can help improve relationship (Spake, Beatty, Brockman & Crutchfield. 2003). Comfort positively influences perceived service quality and satisfaction (Dabholkar, Shepherd & Thorpe, 2000). Comfort influences satisfaction positively (Paswan & Ganesh, 2005). In the P2P sharing-service context, SRCs’ evaluation of SPCs are carried out by reviews. Customer reviews of SPCs’ services are vitally important for both SRCs and SPCs. Reviews help other SRCs to identify desirable SPCs (Ert, Fleischer & Magen, 2016) and SPCs to receive feedback for their service quality improvement. Therefore, we propose the following: H5: Comfort leads to SRC’s intention to write good reviews. Data Collection Data will be collected from American consumers who have used Uber at least once in the past one year through an online scenario-based survey using a 2 (genders: male vs. female) x 3 (races: white vs. yellow vs. black) x 3 (forms of address: no address vs. first name vs. last name) between-subject experimental design. Hypotheses will be tested by an analysis of variance and a structural equation modeling analysis. In the analyses, the potential effects of trust, familiarity, community belonging, utility (Möhlmann, 2015) and age will be controlled. Implications Findings of this study will reveal the importance of reducing social distance that SRCs feel during encounters with SPCs. Of many possible ways to reduce social distance between SRCs and SPCs, the result of this study will show that SPCs’ use of appropriate form of address to SRCs is effective. Further, it will show that the effect of social distance on customer comfort can vary by the purpose of the use of the sharing service. These findings will offer P2P service firms insights on how to help SPCs offer more comfortable services to SRCs and as a result receive positive reviews from SRCs.

Introduction According to the Federation of the Swiss Watchmaking Industry (FHS) in 2017, Switzerland occupies approximately 3% of the global market regarding the quantity of watches. As for value, Switzerland represents 54% of global sales that is 21 billion USD. About 95% of luxury watches with price starting from 1,000 USD are stamped "Swiss Made.” Thus, the Swiss watch industry has become an integral part of the luxury universe. However, it‟s not an easy task to get a place in this luxury market of reference. According to the estimation made by the Institute of Watch Marketing, there are approximately 200 active Swiss watch brands on the market today. In order to create an uncontested market space and stand out from the competition luxury watch brands are obliged to create a new way of dealing with concurrence. The majority of brands chose the positioning at the top of a watch pyramid. First of all, it is an economic issue: according to the recent Deloitte report (2017) on watchmaking industry, the most important increase is in the category of watches belonging to the “Haute Horlogerie” segment. While other categories have been steadily losing their shares in exports for years, the high-end category of watches is growing considerably. In the last two decades, luxury brand management has attracted much interest and discussions in academic and business circles. Among the business leaders and scientists, the debates were related to the challenges and paradoxes associated with luxury branding and management that emerged as a result of the evolution of the field (Okonkwo, 2007; Kapferer, 2008 Chevalier and Mazzalovo, 2008, Dubois B., Laurent G., et Czellar S, 2001). In order to create and maintain the position of a strong luxury brand, a number of key elements have been identified as crucial and divergent within the scientific literature (Sicard, 2008; Fionda and Moore, 2008, Merle, Chandon and Roux, 2008). Vigneron and Johnson (2004) proposes key luxury dimensions that managers should establish and monitor for creating a lasting luxury brand. Nevertheless, in our opinion there are no many researches explaining hyper luxury segment growth and the upward expansion of the Swiss luxury watchmaking to the hyper luxury. To our knowledge, there is no scientifically accepted definition of the hyper luxury segment. We attempt to define hyper luxury watch brands as “Haute Horlogerie” watch brands with a unique positioning based on the personal-oriented perceptions of customers, high experiential value and proprietary manufacturing know-how, offering mainly mechanical watches in a price range starting at roughly 60„000 USD and then passing to the price categories of 100‟000-500‟000-1‟000‟000 USD for a watch. In order to shed light on upward expansion to Hyper Luxury trend in Swiss luxury watchmaking we should formulate the following research question: What kind of resources to optimize and which processes to implement in order to create resource-based competitive advantage in a highly competitive market of Swiss luxury watchmaking? Methodology To gain a deeper understanding of the upward expansion to hyper luxury in Swiss watchmaking industry we proceed to qualitative research (semi-structured interviews with 20 CEO and Marketing managers) among watchmaking companies. We specifically focused on top managers involved in the product development and decision making and management processes. The key issues addressed were: definition of the key company‟s resources, information management, market sensing, innovative approaches in management, sources of value creation for customers and differentiation strategies, managerial vision and firm-specific practices and procedures. Qualitative research methods were selected for this study with the aim to generate data rich in details and embedded in context. This study will allow us to enlarge and enrich previous theoretical findings and illustrate it with practical evidences. Conceptual framework Last decades have seen an important economic shift from manufacturing to information and knowledge-driven services. This shift has been accompanied by an increase in the importance of intangible assets and capabilities. Thus the source of competitive advantage has changed from mostly manufacturing assets to market based intangible assets and capabilities (Ramaswami et al., 2009). The resource-based theory (RBT) provides an important framework in explanation and prediction of the firm‟s competitive advantage and superior performance based on market based insights (Barney and Arikan, 2001, Vorhies and Morgan, 2005). RBT considers a company as an idiosyncratic mix of resources and capabilities that are available for application by various departments in the company and are very difficult to imitate by competitors (Teece et al., 1997). Accordiang to Barney and Hesterly (2012), sustainable competitive advantage results only if resources are simultaneously valuable, rare, imperfectly imitable, and exploitable by the firm‟s organization (VRIO). This VRIO framework has acknowledged that resources need to be leveraged effectively by the organization, instead of simply possessed by the firm. Even if a resource is valuable, rare, and imperfectly imitable, a firm must be “organized to exploit the full competitive potential of its resources and capabilities. According to Newbert (2008), performance improvement is not directly a function of the value or rareness of a firm‟s resource-capability combinations but rather of the advantages it creates from their exploitation. Then, through insightful theoretical development researchers have expanded the RBT into the concept of dynamic capabilities. Specifically, dynamic capabilities are defined as the ability to build, integrate, and reconfigure internal and external intangible resources to address rapidly changing environments (Winter, 2003). Teece et al (1997) and Eisenhard and Martin states that sustained competitive advantage could be based on the firm‟s renewal and reconfiguration of its resources and capabilities through dynamic capabilities. The dynamic capabilities view changes from the resource-based view of the firm (Barney, 1991), by its attempts to the explanation of the conditions under which firms achieve competitive advantage based on their resources and capabilities (Molina et al., 2014). Furthermore, researchers have increased conceptual understanding of the role of marketing in enabling firms to create and sustain competitive advantage and superior performance (Ramaswami et al, 2009). In accordance with potential to improve business performance, some studies (Bruni and Verona, 2009), have introduced the term „Dynamic Marketing Capabilities‟ (DMCs hereafter). In fact, DMCs are specifically focused on releasing and integrating market knowledge that helps firms evolve. Developing DMCs could constitute the real basis for sustainable competitive advantage and superior performance in most competitive sectors (Molina et al, 2014). Fang and Zou (2009) define DMC as the responsiveness and efficiency of cross-functional business processes for creating and delivering customer value in response to market changes. It is this focus on customer value that distinguishes DMCs from dynamic capabilities in general. According to Bruni and Verona (2009) DMC are those capabilities aimed specifically at developing, releasing and integrating market knowledge that helps firm evolve. Main findings and analysis Analysis of semi-structured interviews with the CEO and marketing managers of the Swiss luxury watchmaking companies lead us to a number of findings concerning the role of DMC for the hyper luxury brand expansion. The exploratory study confirms many of the elements presented in the conceptual part of this article. Most of the Swiss high-end watchmaking companies are traditionally founded focusing on specific kind of watch and technological expertise in it. Often, these companies tend to develop and grow by mastering their technological competences. As it comes from our research nowadays rare are companies that uses dynamic DMC. Even if the majority of companies confirmed the importance of DMC, it is very difficult to implement it on practice due to the complexity of the numerous stages of industrial production, various operations and partners. Meanwhile, there are some companies that managed to integrate the concept of dynamic marketing capabilities and improve their performance. A deeper questioning into their management practices revealed that they are achieving these results because of the sophisticated and effective way of implementation marketing insights coming from partners and clients. These high performing companies generate growth because of their particular focus for constant improvement of their marketing activities. “The main idea is to question all the time our way of working and to elaborate more sophisticated marketing mix than most of our competitors. For us, sophistication of our watches has the same importance as sophistication of our marketing activities”. Our research pointed out that these few firms of Swiss luxury watchmaking industry, that successfully accomplish the search and gap-assessment stages concerning dynamic marketing capabilities have an advantage over rivals. The market-based identification of valuable resources and internal management of intangibles help managers recognize the need for improvement. In a case of such particular industry as Swiss watchmaking where any considerable changes are very costly and time consuming the companies that applies DMC through small steps and project-based development assure their presence and adaptability to the globalized changes of the economy. “Swiss luxury watchmaking industry strongly related to the overall economic and social changes in the world. So we need to be constantly aware and understand global trends, for example, emerging categories of customers and their expectations towards luxury products”. Thus, dynamic marketing capabilities are considered as very important value creation drivers. We identified marketing intelligence, customer relationships and professional networks as the most important elements for additional value creation. “It is clear that information is very important in order to stay “up to date” with the market. As most of decisions and processes depends on the feeling of the current situation on the market and clients, it’s very important to gather as much information as possible. There is no one source of information, but the multitude of different sources and various information as a puzzle helps to construct the right vision”. Organizational capabilities, information sharing and collaboration between various departments are directly related to new value creation. As it came from the qualitative analysis the main conditions are the “openness” of management vision and strategic flexibility of decision makers. Moreover, high-performing companies participated in our research confirmed that it is very important to adopt an entrepreneurial attitude and to implement “participative” way of collaboration. “On the initial stages of product development, all departments are invited to give their feedback on the product. We organize regularly a brainstorming in order to obtain various perspectives. Cross-functional teamwork brings more value”. Those companies who could create some sort of flexibility in organization of production find themselves mostly on the niche market of hyper-luxury with a very personalized, sometimes even “co-created” watches. In this approach, it is a client, his visions and his preferences that are incorporated into the watch through its design, configuration, functions and complications. This phenomenon also confirms the recent trends on the luxury market of ultimate personalization and unique experience creation that accompanying the product. “People who could acquire almost everything that they want are looking for new experiences. Millennials are willing to pay higher price for personalized high-end and luxury items. The watch became not only the symbol of the status of its owner, but the reflection and continuation of the personality of a client. In this case a unique watch for somebody unique is a great concept”. Managerial recommendations Our research revealed that the concept of the dynamic marketing capabilities as a part of intangible resources of the company could be very beneficial for swiss luxury watchmaking companies in the process of expansion to hyper luxury segment. Managerial contribution of this article lies in new approach illustration that could be used as a support for strategic decision-making in Swiss watch-making companies. The concept of dynamic marketing capabilities is a very complex phenomenon. As a first step for improvement it would be important to get more informed and deeply understand it. In order to create more value and better performance, it is important to deep “intuitive” way of decision making and to implement more explicitly insights coming from practice. Traditionally very segmented industry of Swiss luxury watches is on the road to changes due to radical social and economic changes around the world. Nowadays, company growth and performance requires connecting many elements across various sources of data. There are more opportunities and synergies in initial collaboration on the basic steps of the expansion to hyper luxury segment of watches then filling in the gaps that were not considered in the beginning. Feedbacks from customers and partners could be the most valuable data sources for sustainable changes and following up current trends on the market. Extensive data gathering and analysis, flexibility and learning has a direct impact to the performance. The more internal and external sources engaged into the flexible management and decision making process, the better performance and customer value it could bring. Nowadays, customer is placed in the center of the most of successful businesses. The level of understanding of the customer preferences and values turning to solid insights that could help for better and more efficient performance and decision making processes. Co-created value with customer‟s insights will help to achieve more recognition, exclusivity and appreciation from customers. Direct interactions with wealthy individuals are the main differentiators and value creation mechanisms of a hyper luxury segment of watches. There are numerous opportunities to engage customers in a dialogue instead of traditional for Swiss luxury watchmaking industry one-directional communication. Largely applied in other industries (luxury cars, yachts etc.) this approach is considered to be a niche in the luxury watchmaking. Thus, in our opinion even in the highly traditional industry as Swiss luxury watchmaking it is of great importance to understand and try to implement this dynamic approach and to adopt “Bottom up” management practices. From managerial point of view it is important to encourage curiosity, open-mindedness and cross-departmental communication of the employees. Our key managerial recommendation would be to state that in order to gain competitive advantage, information from the markets, partners and clients should be translated into actionable plans that, once applied, tend to yield concrete results. This transition from data to reconfiguration of processes represents the path that creates more value and competitive advantage in a highly competitive industry. More specifically, firms aimed to compete on the basis of the superior customer service and expansion to the “hyper luxury” sector are advised to invest into building new type of relationship and more dynamic organizational process based on the insights coming from various partners. Limitations and further research avenues The resource advantage theory was predominantly constructed on the theoretical level. In our opinion, such approach could be considered as the key drawback of scientific discourse. Recognition that science and practice produce distinct forms of knowledge has been longstanding. According to Van de Ven (2007), the gap between theory and practice may be a knowledge production problem. The aim of the current research is to suggest a vice versa point of view and to highlight empirical evidence coming from practice. The theoretical contribution of this article to the academic discussion lies in explaining the expansion to the Hyper Luxury Watchmaking Segment based on intangible assets management. We contribute to the development of RBT with its insights deriving from Swiss luxury watchmaking industry. These issues helps us to come up with managerial recommendations and thus to contribute to the advancement of the RBT. The main limitation of this research is in the nature of our research. The exploratory research helped us to identify the key elements in expansion to hyper luxury watch segment by Swiss luxury watchmaking companies. However, this does not allow us to understand the depth of this phenomenon. In order to confirm this results the more profound and focused analysis is needed. It could help to understand deeper micro-foundations of DMC. In addition to that, in our opinion a detailed case study of the firm with outstanding DMC‟s would be particularly valuable. Otherwise, to test quantitatively what are the links between various elements is also a promising avenue for this research.

While researchers have demonstrated the benefits of customer reviews on company sales, a largely uninvestigated issue is the interplay between emotions and cognitive cues of information in the processing of online reviews. Drawing on Stimulus-Organism-Response framework, this paper analyzes: (i) the independent effect of each dimension of emotions (arousal and pleasure), empathy with the reviewer and persuasiveness on perceived helpfulness of online reviews; (ii) the impact of perceived helpfulness on eWOM adoption; (iii) the moderating effect of sequence of reviews on the impact of emotions on perceived helpfulness of online reviews. In order to test the hypotheses of the model an experimental subjects-design was carried out using valence order: positive-negative vs. negative-positive as a condition. Data was collected in January 2016 using a sample of 830 Spanish TripAdvisor users. Participants were instructed to imagine a situation where they were going out for dinner to an Italian restaurant with friends and they were told to read a total of 10 reviews about the restaurant in the same order they were displayed and answer the questions that followed. Data analysis shows a bias effect of sequence of reviews on the impact of emotions and empathy with the reviewer on review helpfulness, which, in turn, influences eWOM adoption. When the sequence of TripAdvisor reviews begins with positive commentaries (POS-NEG), pleasure elicited by eWOM is a stronger driver of perceived helpfulness and empathy with the reviewer than if the sequence is the opposite (NEG-POS). On the contrary, arousal only triggers eWOM helpfulness when the user reads negative commentaries followed by positive ones. This study is novel because it explains how emotions and perceived usefulness of online reviews play a central role in eWOM adoption in tourism services to make consumption decisions.

Virtual reality is the extension of every major technology we already use today (Manjoo, 2014). Barnes, Mattsson, and Hartley (2015) argue that VR is a significant new environment for experiential customer service interactions as well as a recreational activity. It is capable of blurring the boundaries between the consumer’s virtual and physical environment (Schlosser, Mick, & Deighton, 2003). In other words, in our fitness context where people enter a VR while performing a core body workout, VR is capable of blurring the boundaries between physical servicescape and virtual service environment created. In our study we answer the question which reality is predominantly perceived by the customers and which implications that has for service providers. Previous scholars focused on the evaluation of customer’s presence and perception of the physical servicescape (Baker, Levy, & Grewal, 1992; Bitner, 1992; Wakefield & Blodgett, 1999) and demonstrated the impact of cues on post-consumption constructs like emotion, customer satisfaction or service quality (Hooper, Coughlan, & R. Mullen, 2013; Reimer & Kuehn, 2005; Wall & Berry, 2007). We extend that knowledge by analysing the potential of simultaneous presence in both the physical and virtual environments. Psychological immersion into the virtual world, or in other words, escape from the servicescape into the virtual environment will both be dominant over the physical servicescape and generate additional value to the users (Holbrook, 1994; Innocenti, 2017; Yee, 2006). To address the research question, we used sports equipment which allows the survey participant to virtually fly through the Rocky Mountains while performing a workout (ICAROS). The data was generated using a questionnaire which was answered after the workout. The data shows a direct positive relationship between telepresence and escapism, supporting (a) the theory that people predominantly perceive the VR as their actual reality during the service consumption (i.e. workout) and (b) that escaping the servicescape supports participants overall desire to escape from reality, which in turn has a positive impact on participants’ functional and emotional evaluation of the service. These results contribute to a rising research interest in the use of VR in a service environment and offers great potential to practitioners on how an application of VR technology may enhance service experience and subsequently increase customer satisfaction by changing the servicescape at low cost.

Failure in servicing has detrimental effects upon customers, which can be translated into loss of resources. As such, this study employed the conservation of resources (COR) theory and developed a novel conceptualization that captures customers’ resource losses (after a failure), as well as their complaint process, by capturing dynamic loss, activation, and recovery of customers’ resources, in the case of a service failure. The use of online features and platforms for customers to voice their complaints was conceptualised as resource integration between the customer and the firm. The outcomes revealed online complaining as self-protective and selfenhancement behaviour. It is also unravelled in this study that various personal- and firm-related resource integrations in an online complaining context could result in varying emotional states and behavioural intentions among the affected customers towards the defaulting firm. These results open up an avenue for firms to devise effective intervention strategies.

Introduction With the opening of the 4th revolution era, platform business started to come into the spotlight. It was in the early 2000s that academics started full-scale research on platform based on the two-sided market theory but in fact the two-sided market is a business model that has existed around us since before. Examples include credit card industry, real estate brokering, and auctions. These industries are creating value through the interaction of two markets of different needs through a company that provides a specific platform (Rochet and Tirole, 2003, 2006). Recently, with the widespread use of services and products based on high technology, platform business is pouring into our lives at an amazing speed. With a single ID, you can shop, pay for, and receive shipping from a variety of online stores, without having to go through a lot of memberships. You do not have to search every single hotel for the best price, best location. You can even find a room in the house and see the reviews of customers who have stayed there. Compared to traditional pipeline business, one of the key differentiating features of the platform business is a two-sided network effect where consumers and consumers, producers and producers, and consumers and producers interact with each other. This two-sided network effect, with a positive feedback loop, has become a major driver of platform company growth. In the two-sided market, the platform‟s value to any given user largely depends on the size of the users on the other side of the platform due to the indirect network effect (Evans, 2003; Parker & Van Alstyne, 2005). Therefore, increasing the size of one side market, including the issue of „chicken or egg‟, is an indispensable task for the platform managers to maximize platform performance. But more important than increasing the size of one side of the market is transforming the new customers to loyal customers and creating positive feedback loops. This study explores the process of online payment platform users signing up, forming user loyalty, and spreading the loyalty to the sellers and platform providers. More specifically, this study examines (1) what causes the consumers to join the online payment platform at the beginning (2) what are the drivers that lead new members to the active, loyal users (3) whether the loyalty to the payment platform has a positive effect on the attitude toward the sellers (the other side market) and the platform company (platform provider). Theoretical Background and Hypotheses Two- Sided Markets and the Platform The definition of the two-sided market is varied by scholars. Chakravoti and Roson (2006) defines the two-sided market as a market where two different groups of users interact through the platform and the value created at this time is influenced by the indirect externalities of the network. Here, the platform is a physical, virtual, or institutional environment that allows different groups of users to facilitate transactions or interactions. According to Evans (2003), three necessary conditions for two sided platform markets are: (1) there are two distinct groups of customers; (2) there are externalities associated with customer A and B becoming connected or coordinated in some fashion; (3) an intermediary can facilitate that coordination efficiently than bi-lateral relationships between the members of the group. For example, we can think of a credit card company. There is a group of card holders and merchants and the demands of these two groups are very different. There is also a network effect between the two groups. Customers will not use credit cards with fewer merchants. The greater the number of merchants, the greater the benefits the customers have. Likewise, the more cardholders there are, the more profitable the merchants can generate. The intermediary role of the two groups of users to interact is a credit card company. Perceived value and Loyalty to the Online Payment Platform The loyalty to the online payment system can be expressed as the level of participation and commitment the member has over other similar payment systems. O‟Brien and Jones (1995) argue the value perception as an important prerequisite factor in developing brand loyalty; that is, only after the customer has perceived the online payment system as valuable, then would the customer become loyal to the system. The expectations that the perceived value can affect the loyalty to the online payment platform may be explained in terms of “Social Exchange Theory” (Thibaut and Kelly 1959). Within this framework, the customer will remain in the platform only when he or she perceives the value, which is defined as a trade-off between costs and benefits (Woodruff and Gardial 1996) is sufficient. Overall, perceived value of the online payment platform would affect customer loyalty. More specifically, it is expected that non-economic values such as simplicity in account setting, convenience in use will have a more meaningful effect than the economic value including sign-up grant at the stage of attracting new customers. But in the process of new customers becoming active and loyal users, the economic value including mileage points, discount coupons and free trial coupons will play a more important role in addition to this convenience. For example, benefit of being able to use the accumulated mileage or discount coupon on any online store within the platform will make consumers to stay on this payment platform and become loyal customers. Based on such argument, we put forward the following hypothesis. H1: Non economic value has a positive effect on online payment platform loyalty H2: Economic value has a positive effect on online payment platform loyalty. Loyalty Transfer According to Eisenmann et al. (2006), the platforms exhibit two types of network effects: A same-side effect, in which increasing the number of users on one side of the network makes it either more or less valuable to users on the same side; and a cross-side effect, in which increasing number of users on one side makes it either more or less valuable to the users on the other side. In case of online payment platform, it is expected that there will be a positive cross-side network effect. As the number of consumers using a specific online payment platform increases, the number of partner shops participating in the platform will increase, allowing consumers to shop in more diverse online stores. Once customers experienced the value of a specific online payment system, they would insist on paying by this method when shopping online (Parker, Alstein and Choudary, 2016), that is, becoming a loyal customer. Oliver (1999) defines customer loyalty as a deeply held commitment to re-buy or re-patronize a preferred product or service consistently in the future, thereby causing repetitive same brand purchasing. The loyal customers will be among the many online stores selling the same products/services at a same price, shopping at stores that show their favorite online payment system logo, and encouraging friends and family to use the payment system. The frequent transactions will affect consumer‟s attitude towards a certain brand or store and diffuse their loyalty. The customers that are loyal to the payment platform will not only actively try to earn points but also be willing to go and shop at the stores participating in the platform. Some customers may prefer a store among many even though they have not used it before because it belongs to the platform. The loyalty to the platform also can be transferred to the loyalty on the platform provider. Customers will have a favorable attitude when the platform providers do other business (for example, online banking, debit card business, etc.). Given the above, we put forward the following 3 hypotheses. H3: Platform loyalty has a positive effect on the loyalty toward the sellers, the other side market. H4: Positive attitude toward the sellers within the platform has a positive effect on attitude toward the platform company H5: Platform loyalty has a positive effect on the attitude toward the platform company. Conceptual Framework Data Analysis and Results The data used in this study were obtained from a survey of 562 online payment platform users. Data analysis shows that non-economic values such as simplicity, convenience, and platform reliability have a more significant impact on platform loyalty than economic values such as sign-up bonus. However, it was found that economic factors such as mileage points, and discount coupons are more influential factors in the process of converting new members to active users. In addition, loyalty to the payment system has a positive effect on attitudes towards sellers where one can use the means of payment. Also, it can be seen that the customer loyalty to the platform and the favorable attitude toward the sellers make a favorable attitude toward the platform company providing and managing the two-sided market. Conclusion and Discussion This study may contribute to a better understanding of platform business in three particular ways. First, understanding the loyalty diffusion mechanisms within the platform can support platform companies to develop effective strategies to attract new consumers to the platform and to transform them into active users. Second, even though the study uses the data collected from individual consumer level, the findings may provide some inspiration for B2B relationships. For example, as the number of loyal buyers and sellers sharing the platform increases, the value of the platform increases and the platform company can use it as a powerful bargaining power when it comes to third business. Third, the study may help us to understand the role of Platform in two-sided market and how the customer loyalty becomes diffused. Although this study explored the loyalty formation and diffusion using the sample of the major payment systems in Korea, it may be premature to generalize the findings at this stage. It is important to note that there may be negative network effects. They need to be evaluated further through careful research.