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The Formation of Market-Level Expectations and Its Covariates

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  • Anderson, Eugene W
  • Salisbury, Linda Court

Abstract

A formal model of market-level expectations is developed and used to identify testable hypotheses. The empirical findings indicate that market-level expectations are more adaptive in nature than previously thought. The study also provides the first systematic investigation of cross-industry variation in the formation of market-level expectations. Several factors, including advertising, word-of-mouth, market growth, and purchase frequency, are found to have a significant moderating influence on the adaptation rate. Finally, we find that market-level expectations adjust faster when perceived quality declines, suggesting that negativity biases manifest at a macrolevel--a phenomenon that has not been previously observed. Copyright 2003 by the University of Chicago.

Suggested Citation

  • Anderson, Eugene W & Salisbury, Linda Court, 2003. "The Formation of Market-Level Expectations and Its Covariates," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 30(1), pages 115-124, June.
    • Handle: RePEc:oup:jconrs:v:30:y:2003:i:1:p:115-24
    DOI: 10.1086/374694
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    Cited by:

    1. Agnieszka Zablocki & Bodo Schlegelmilch & Michael J. Houston, 2019. "How valence, volume and variance of online reviews influence brand attitudes," AMS Review, Springer;Academy of Marketing Science, vol. 9(1), pages 61-77, June.
    2. Tolga Akcura & Kemal Altinkemer & Hailiang Chen, 2018. "Noninfluentials and information dissemination in the microblogging community," Information Technology and Management, Springer, vol. 19(2), pages 89-106, June.
    3. Hayes, Jameson L. & King, Karen Whitehill & Ramirez, Artemio, 2016. "Brands, Friends, & Viral Advertising: A Social Exchange Perspective on the Ad Referral Processes," Journal of Interactive Marketing, Elsevier, vol. 36(C), pages 31-45.
    4. Coram, Paul J. & Mock, Theodore J. & Monroe, Gary S., 2011. "Financial analysts' evaluation of enhanced disclosure of non-financial performance indicators," The British Accounting Review, Elsevier, vol. 43(2), pages 87-101.
    5. Divakaran, Pradeep Kumar Ponnamma & Palmer, Adrian & Søndergaard, Helle Alsted & Matkovskyy, Roman, 2017. "Pre-launch Prediction of Market Performance for Short Lifecycle Products Using Online Community Data," Journal of Interactive Marketing, Elsevier, vol. 38(C), pages 12-28.
    6. Debanjan Mitra & Peter N. Golder, 2006. "How Does Objective Quality Affect Perceived Quality? Short-Term Effects, Long-Term Effects, and Asymmetries," Marketing Science, INFORMS, vol. 25(3), pages 230-247, 05-06.
    7. Kim, Wonjoon & Kim, Minki, 2015. "Reference quality-based competitive market structure for innovation driven markets," International Journal of Research in Marketing, Elsevier, vol. 32(3), pages 284-296.
    8. Cayetano Medina & Ramón Rufín & Manuel Rey, 2015. "Mediating relationships in and satisfaction with online technologies: communications or features beyond expectations?," Service Business, Springer;Pan-Pacific Business Association, vol. 9(4), pages 587-609, December.
    9. Mouillot, Philippe & Pupion, Pierre-Charles, 2017. "Ecosystem-based Artefacts as a Source of Loyalty at the French Valley of the Monkeys," Ecological Economics, Elsevier, vol. 141(C), pages 106-118.
    10. De Bruyn, Arnaud & Lilien, Gary L., 2008. "A multi-stage model of word-of-mouth influence through viral marketing," International Journal of Research in Marketing, Elsevier, vol. 25(3), pages 151-163.
    11. Liu, Ran & Ford, John B. & Zhang, Weiyong & Bonnici, Joseph, 2023. "Reappraising the roles of review valence and conflict in online relationships," Journal of Business Research, Elsevier, vol. 167(C).
    12. Tolga Akcura & Kemal Altinkemer & Hailiang Chen, 0. "Noninfluentials and information dissemination in the microblogging community," Information Technology and Management, Springer, vol. 0, pages 1-18.
    13. Taeuscher, Karl, 2019. "Reputation and new venture performance in online markets: The moderating role of market crowding," Journal of Business Venturing, Elsevier, vol. 34(6).
    14. Mehran REZVANI & Seyed Hamid Khodadad HOSEINI & Mohammad Mehdi SAMADZADEH, 2012. "Investigating the Role of Word of Mouth on Consumer Based Brand Equity Creation in Iran’s Cell-Phone Market," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 2(1), pages 1-3, February.
    15. Yani Wang & Jun Wang & Tang Yao, 2019. "What makes a helpful online review? A meta-analysis of review characteristics," Electronic Commerce Research, Springer, vol. 19(2), pages 257-284, June.
    16. Hadjikhani, Amjad & Hadjikhani, Annoch Isa & Thilenius, Peter, 2014. "The internationalization process model: A proposed view of firms’ regular incremental and irregular non-incremental behaviour," International Business Review, Elsevier, vol. 23(1), pages 155-168.
    17. Bastos, Wilson & Moore, Sarah G., 2021. "Making word-of-mouth impactful: Why consumers react more to WOM about experiential than material purchases," Journal of Business Research, Elsevier, vol. 130(C), pages 110-123.
    18. Thomas O. Uitz & Eva Jancikova, 2021. "Service Failures and How the Perception of Justice Affects the Level of Satisfaction," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 105-117.
    19. Floyd, Kristopher & Freling, Ryan & Alhoqail, Saad & Cho, Hyun Young & Freling, Traci, 2014. "How Online Product Reviews Affect Retail Sales: A Meta-analysis," Journal of Retailing, Elsevier, vol. 90(2), pages 217-232.
    20. Filieri, Raffaele, 2015. "What makes online reviews helpful? A diagnosticity-adoption framework to explain informational and normative influences in e-WOM," Journal of Business Research, Elsevier, vol. 68(6), pages 1261-1270.
    21. Femke van Horen & Rik Pieters & Darren DahlEditor & Page MoreauAssociate Editor, 2017. "Out-of-Category Brand Imitation: Product Categorization Determines Copycat Evaluation," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 44(4), pages 816-832.

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