TY - JOUR

T1 - Do buzz and evidence really matter in product preannouncements? An empirical test of two competing theories

AU - Mishra, Debi P.

AU - Atav, Gizem

AU - Dalman, M. Deniz

N1 - Mishra, D. P. Do buzz and evidence really matter in product preannouncements? An empirical test of two competing theories / D. P. Mishra, G. Atav, M. D. Dalman // Journal of Consumer Marketing. - 2020. - Volume 37, № 7. - P. 739-748. Publisher Copyright: © 2020, Emerald Publishing Limited. Copyright: Copyright 2020 Elsevier B.V., All rights reserved.

PY - 2020/7/17

Y1 - 2020/7/17

N2 - Purpose: This paper aims to investigate if product pre-announcement effects measured using stock market returns conform to the predictions of two competing consumer marketing theories. In particular, while buzz marketing theory indicates a direct positive effect, information asymmetry theory suggests an influence contingent upon evidence. The study also investigates whether a pecking order of performance effects exists across different signaling situations. Design/methodology/approach: The final sample consists of 219 product-preannouncements reported in the Wall Street Journal between 2005 and 2015. The standard event study methodology was used to test for performance effects. Findings: The results show that preannouncements with evidence alone significantly outperform those with buzz alone, and announcements containing buzz and evidence. Also, buzz acts as a salient moderator of the relationship between evidence and performance. In addition, company size also affects the evidence-performance relationship, with smaller firms benefiting more from evidence than larger firms. Research limitations/implications: The event study method assumes efficient markets and deals with publicly traded companies. Practical implications: Managers can allocate resources wisely by deciding whether to invest in evidence or buzz in their pre-announcements. Originality/value: In contrast to extant research that primarily investigates contingency effects, this study identifies how an important moderator, i.e. buzz affects performance.

AB - Purpose: This paper aims to investigate if product pre-announcement effects measured using stock market returns conform to the predictions of two competing consumer marketing theories. In particular, while buzz marketing theory indicates a direct positive effect, information asymmetry theory suggests an influence contingent upon evidence. The study also investigates whether a pecking order of performance effects exists across different signaling situations. Design/methodology/approach: The final sample consists of 219 product-preannouncements reported in the Wall Street Journal between 2005 and 2015. The standard event study methodology was used to test for performance effects. Findings: The results show that preannouncements with evidence alone significantly outperform those with buzz alone, and announcements containing buzz and evidence. Also, buzz acts as a salient moderator of the relationship between evidence and performance. In addition, company size also affects the evidence-performance relationship, with smaller firms benefiting more from evidence than larger firms. Research limitations/implications: The event study method assumes efficient markets and deals with publicly traded companies. Practical implications: Managers can allocate resources wisely by deciding whether to invest in evidence or buzz in their pre-announcements. Originality/value: In contrast to extant research that primarily investigates contingency effects, this study identifies how an important moderator, i.e. buzz affects performance.

KW - Agency theory

KW - Buzz marketing

KW - Information asymmetry

KW - Pre-announcements

KW - Product pre-announcements

KW - Signaling theory

KW - Stock market return

KW - SCOPUS

KW - РИНЦ

UR - http://www.scopus.com/inward/record.url?scp=85087936796&partnerID=8YFLogxK

U2 - 10.1108/JCM-06-2018-2740

DO - 10.1108/JCM-06-2018-2740

M3 - Article

AN - SCOPUS:85087936796

VL - 37

SP - 739

EP - 748

JO - Journal of Consumer Marketing

JF - Journal of Consumer Marketing

SN - 0736-3761

IS - 7

ER -