Creating Loyalty Towards Magazine Websites: Insights from the Double Jeopardy Phenomenon

Creating Loyalty Towards Magazine Websites: Insights from the Double Jeopardy Phenomenon

Anssi Tarkiainen (School of Business / Technology Business Research Center, Lappeenranta University of Technology, Lappeenranta, Finland), Hanna-Kaisa Ellonen (School of Business / Technology Business Research Center, Lappeenranta University of Technology, Lappeenranta, Finland), Mart Ots (Jönköping International Business School, Jönköping, Sweden) and Lara Stocchi (School of Business and Economics, Loughborough University, Loughborough, Leicestershire, UK)
Copyright: © 2014 |Pages: 14
DOI: 10.4018/ijebr.2014010101
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Abstract

For years, magazine publishers have been developing their online presence, pursuing a range of different goals and strategies for their websites. One of the key questions in creating online presence is whether to allocate resources on developing the offline print brand and expect brand equity transfer to the online environment or to allocate resources on developing the online brand for new audience. In this paper the authors propose an application of double jeopardy approach for assessing this issue. Finnish secondary data is used to test two competing research hypotheses. The analysis reveals that the magazine publishers who have been able to build market share in online environment seem to have more loyal customer-base in their websites. Market share of printed magazine does not predict loyalty towards magazine websites.
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Theoretical Background

The Double Jeopardy Phenomenon

DJ is one of the most widely recognized empirical generalizations in the field of marketing (e.g., Lees, 2006). Building on the original work by McPhee (1963) based on media consumption, researchers have reported empirical evidence illustrating how brands with high market share tend to have more customers (higher market penetration), as well as slightly higher levels of brand loyalty (e.g. higher level of repeat purchases or higher purchase frequency) compared to ‘smaller brands’, i.e. brands with low market share. A way of interpreting this simple empirical rule from a managerial perspective is that there is a strong direct relationship between the ‘size’ of a brand (expressed in terms of market share) and its level of loyalty and overall market performance (Ehrenberg, 2000). This affects also other aspects of buying behavior, such as typical components of brand equity. Barwise and Ehrenberg (1985), demonstrated that the DJ pattern affects also a key brand equity component: the set of brand perceptions held in memory by consumers. Bigger brands, in fact, having more users (higher penetration) also tend to be associated with a larger pool of concepts by consumers, hence to be more salient marketwise (Barwise & Ehrenberg, 1985).

The DJ pattern has been observed to hold robustly in many product categories, such as coffee (Ehrenberg, Goodhardt, & Barwise, 1990 1990), packaged goods (Wrigley & Dunn, 1984) and automobiles (Colombo & Morrison, 1989). However, media consumption has also been in the focus of studies, starting from the original work of McPhee focusing on comic strips and radio presenters and moving on to newspapers (Barwise & Ehrenberg, 1988; Ehrenberg, Goodhardt, & Barwise, 1990, 1990; McDowell & Dick, 2001), television (Barwise & Ehrenberg, 1987; Donthu, 1994) and radio (McDowell & Dick, 2005; Lees, 2006). Researchers have also shown that DJ effects are visible on Internet search engines and online retailers (Donthu & Hershberger, 2001).

Since it illustrates repeated purchasing behavior or repeated usage of the same media, in this paper we ‘use’ the DJ pattern as empirical and theoretical guideline to explore the drivers of loyalty towards online magazines and to understand whether it is mostly driven by the ‘size’ of the offline version of the magazine, or simply its online readership. We now clarify how this is going to be approached.

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