IDEAS home Printed from https://ideas.repec.org/a/aic/revebs/y2020j26forrestj.html
   My bibliography  Save this article

Market-Sensing Capabilities, Profitability Within Stagnant Industries And Crafting Of Customer Value Propositions

Author

Listed:
  • JEFFREY YI-LIN FORREST

    (Department of Accounting, Economics and Finance, Slippery Rock University, Slippery Rock, PA 16057, USA)

  • ZAIWU GONG

    (College of Management Engineering, Nanjing University of Information Science and Technology, Nanjing 210044, China)

  • EDWARD SCOTT

    (Department of Accounting, Economics and Finance, Slippery Rock University, Slippery Rock, PA 16057, USA)

  • GERARDO ELOY SOTO RUIZ

    (Marketing Department, Autonomous University of the West, Blvd. Lola Beltrán and Blvd. Mario Lopez Valdes, CP 80020, Culiacán, Sinaloa, Mexico)

Abstract

From the perspective of market competition, this paper investigates the impact of market-sensing capability on a company, and sources profits within a slow growth industry. As an example, our results are applied to demonstrate how effective customer value propositions can be formulated. Among others, it is shown that market-sensing capability empowers a company to categorize customers, lower its operational costs while increase expected profits; that when an industry experiences slow growth, its member company’s profit can grow only through a combination of raising unit price and lowering unit cost; and how market knowledge and innovative understanding of market invitations potentially lead to effective CVPs. Instead of employing either a statistics-based approach or an anecdotal analysis, this work relies on the rigor of game theory so that all results established are generally true unless given conditions are violated. Managerial recommendations for decision makers and potential questions for future research are provided.

Suggested Citation

  • Jeffrey Yi-Lin Forrest & Zaiwu Gong & Edward Scott & Gerardo Eloy Soto Ruiz, 2020. "Market-Sensing Capabilities, Profitability Within Stagnant Industries And Crafting Of Customer Value Propositions," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 26, pages 53-76, December.
  • Handle: RePEc:aic:revebs:y:2020:j:26:forrestj
    DOI: 10.47743/rebs-2020-2-0003
    as

    Download full text from publisher

    File URL: http://rebs.feaa.uaic.ro/articles/pdfs/304.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.47743/rebs-2020-2-0003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Adrian Payne & Pennie Frow & Andreas Eggert, 2017. "The customer value proposition: evolution, development, and application in marketing," Journal of the Academy of Marketing Science, Springer, vol. 45(4), pages 467-489, July.
    2. Jeffrey Yi-Lin Forrest & Jeananne Nicholls & Kurt Schimmel & Sifeng Liu, 2020. "Managerial Decision Making," Springer Books, Springer, number 978-3-030-28064-2, December.
    3. Margaret A. Peteraf & Jay B. Barney, 2003. "Unraveling the resource-based tangle," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 24(4), pages 309-323.
    4. Corinna Clements & Jeffrey Alwang & Ramadhani Achdiawan, 2019. "Value Chain Approaches in a Stagnant Industry: The Case of Furniture Production in Jepara, Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 55(3), pages 341-365, September.
    5. Guangliang Ye & Richard L. Priem & Abdullah A. Alshwer, 2012. "Achieving Demand-Side Synergy from Strategic Diversification: How Combining Mundane Assets Can Leverage Consumer Utilities," Organization Science, INFORMS, vol. 23(1), pages 207-224, February.
    6. Shantanu Dutta & Om Narasimhan & Surendra Rajiv, 1999. "Success in High-Technology Markets: Is Marketing Capability Critical?," Marketing Science, INFORMS, vol. 18(4), pages 547-568.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Forrest Jeffrey Yi-Lin & Gong Zaiwu & Köse Erkan & Galbraith Diane D. & Arık Oğuzhan A., 2021. "An Economy’s Emergent Properties and How Micro Agents with Inconsistent or Conflicting Interests Are Holistically Organized into Macro Entities," Naše gospodarstvo/Our economy, Sciendo, vol. 67(3), pages 53-66, September.
    2. Chahal, Hardeep & Gupta, Mahesh & Bhan, Namrita & Cheng, T.C.E., 2020. "Operations management research grounded in the resource-based view: A meta-analysis," International Journal of Production Economics, Elsevier, vol. 230(C).
    3. Wilden, Ralf & Leiblein, Michael J. & Lin, Nidthida, 2024. "Exploring performance heterogeneity: Integrative insights from strategic management and marketing," Journal of Retailing and Consumer Services, Elsevier, vol. 79(C).
    4. Jenny María Ruiz-Jiménez & Matilde Ruiz-Arroyo & María Mar Fuentes-Fuentes, 2021. "The impact of effectuation, causation, and resources on new venture performance: novice versus expert entrepreneurs," Small Business Economics, Springer, vol. 57(4), pages 1761-1781, December.
    5. Abhi Bhattacharya & Joseph Johnson & Ashkan Faramarzi & Niket Jindal & Ross W. Johnson, 2024. "Marketing capability and the turnaround of financially distressed firms," Journal of the Academy of Marketing Science, Springer, vol. 52(4), pages 1195-1215, July.
    6. Lars Matysiak & Alan M. Rugman & Andreas Bausch, 2018. "Dynamic Capabilities of Multinational Enterprises: The Dominant Logics Behind Sensing, Seizing, and Transforming Matter!," Management International Review, Springer, vol. 58(2), pages 225-250, April.
    7. Said Echchakoui, 2018. "An analytical model that links customer-perceived value and competitive strategies," Journal of Marketing Analytics, Palgrave Macmillan, vol. 6(4), pages 138-149, December.
    8. Ahmed, Muhammad Usman & Kristal, Mehmet Murat & Pagell, Mark, 2014. "Impact of operational and marketing capabilities on firm performance: Evidence from economic growth and downturns," International Journal of Production Economics, Elsevier, vol. 154(C), pages 59-71.
    9. Marvin B. Lieberman & Rajeev Dhawan, 2005. "Assessing the Resource Base of Japanese and U.S. Auto Producers: A Stochastic Frontier Production Function Approach," Management Science, INFORMS, vol. 51(7), pages 1060-1075, July.
    10. S. Arunachalam & Sridhar N. Ramaswami & Pol Herrmann & Doug Walker, 2018. "Innovation pathway to profitability: the role of entrepreneurial orientation and marketing capabilities," Journal of the Academy of Marketing Science, Springer, vol. 46(4), pages 744-766, July.
    11. Shaheer, Noman Ahmed & Li, Sali, 2020. "The CAGE around cyberspace? How digital innovations internationalize in a virtual world," Journal of Business Venturing, Elsevier, vol. 35(1).
    12. Muhammad Imran Hanif & Muhammad Shahzad Hani & Asif Kamran & Rabia Khan & Shao Yunfei, 2016. "Knowledge Sharing And Innovation Performance Affected By Hr Generic Strategies: An Empirical Study Of Smes In China And Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 12(1), pages 272-306.
    13. van Riel, A.C.R. & Lievens, A., 2003. "New service development in high tech sectors: a decision making perspective," Research Memorandum 013, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    14. Francisco Javier Forcadell & Fernando Úbeda, 2022. "Individual entrepreneurial orientation and performance: the mediating role of international entrepreneurship," International Entrepreneurship and Management Journal, Springer, vol. 18(2), pages 875-900, June.
    15. Leroi-Werelds, Sara & Verleye, Katrien & Line, Nathaniel & Bove, Liliana, 2021. "Value proposition dynamics in response to external event triggers," Journal of Business Research, Elsevier, vol. 136(C), pages 274-283.
    16. Aseem Kaul & Jiao Luo, 2018. "An economic case for CSR: The comparative efficiency of for‐profit firms in meeting consumer demand for social goods," Strategic Management Journal, Wiley Blackwell, vol. 39(6), pages 1650-1677, June.
    17. Jeffrey Yi-Lin Forrest & Zhen Li & Roger A. Solano & David J. Doorn, 2021. "Technological and Disruptive Innovations in a Nation's Industrialization and Leadership Development," International Journal of System Dynamics Applications (IJSDA), IGI Global, vol. 10(4), pages 1-17, October.
    18. Ludivine Ravat & Aurélie Hemonnet-Goujot & Sandrine Hollet-Haudebert, 2023. "Data-driven innovation capability of marketing: an exploratory study of its components and underlying processes," Post-Print hal-04151199, HAL.
    19. Marco S. Giarratana & Martina Pasquini & Juan Santaló, 2021. "Leveraging synergies versus resource redeployment: Sales growth and variance in product portfolios of diversified firms," Strategic Management Journal, Wiley Blackwell, vol. 42(12), pages 2245-2272, December.
    20. Cannavale, Chiara & Esempio, Anna & Ferretti, Marco, 2021. "Up- and down- alliances: A systematic literature review," International Business Review, Elsevier, vol. 30(5).

    More about this item

    Keywords

    customer relation; market invitation; market knowledge; market-level growth; Nash equilibrium; profit portfolio;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aic:revebs:y:2020:j:26:forrestj. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sireteanu Napoleon-Alexandru (email available below). General contact details of provider: https://edirc.repec.org/data/feaicro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.