Abstract
We examine the relative roles of marketing actions and product quality in determining commercial success. Using the motion picture context, in which product quality is difficult for consumers to anticipate and information on product success is available for different points in time, we model the effects of studio actions and movie quality on a movie’s sales during different phases of its theatrical run. For a sample of 331 recent motion pictures, structural equation modeling demonstrates that studio actions primarily influence early box office results, whereas movie quality influences both short- and long-term theatrical outcomes. The core results are robust across moderating conditions. We identify two data segments with follow-up latent class regressions and explore the degree of studio actions needed to “save” movies of varying quality. We finally offer some implications for research and management.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Akerlof, G.A. (1970). The market for lemons: qualitative uncertainty and the market mechanism. Quarterly Journal of Economics 84, 488–500.
Basuroy, S., Chatterjee, S., & Ravid, S.A. (2003). How critical are critical reviews? The box office effects of film critics, star power, and budgets. Journal of Marketing 67, 103–117.
Basuroy, S., Desai K.K., & Talukdar, D. (2006). An empirical investigation of signaling in the motion picture industry. Journal of Marketing Research. 43, 287–295.
Bollen, K.A. (1989). Structural equations with latent variables. New York: Wiley.
De Vany, A., & Walls, W.D. (1999). Uncertainty in the movie industry: does star power reduce the terror of the box office? Journal of Cultural Economics 23, 285–318.
Diamantopoulos, A., & Winkelhofer, H.M. (2001). Index construction with formative indicators: an alternative to scale development. Journal of Marketing Research 38, 269–277.
Elberse, A., & Eliashberg, J. (2003). Demand and supply dynamics for sequentially released products in international markets: the case of motion pictures. Marketing Science 22(Summer), 329–354.
Eliashberg, J., & Shugan, S.M. (1997). Film critics: influencers or predictors? Journal of Marketing 61, 68–78.
Ho, J.Y.C., Dhar, T., & Weinberg, C.B. (2004). Effects of pre-launch advertising for movies: why advertise when you have no product to sell? Presented at the sixth business and economics workshop summit in motion picture studies, DeSantis center for motion picture industry studies, Florida Atlantic University.
Holbrook, M.B. (1999). Popular appeal versus expert judgments of motion pictures. Journal of Consumer Research 26, 144–155.
Holbrook, M.B. (2005). The role of ordinary evaluations in the market for popular culture: do consumers have ‘Good Taste’? Marketing Letters 16, 75–86.
Jarvis, C.B., MacKenzie, S.B., & Podsakoff, P.M. (2003). A critical review of construct indicators and measurement model misspecifications in marketing and consumer research. Journal of Consumer Research 30, 199–218.
Jöreskog, K.G. (1971). Simultaneous factor analysis in several populations. Psychometrika 36, 409–426.
Jöreskog, K.G., & Sörbom, D. (1993). LISREL 8: structural equation modeling with the SIMPLIS command language. Chicago: SSI.
Kirmani, A., & Rao, A.R. (2000). No pain, no gain: a critical review of the literature on signaling unobservable product quality. Journal of Marketing 64(2), 66–79.
Kotler, P., & Keller, K.L. (2006). Marketing management. Upper Saddle River, NJ: Pearson/Prentice Hall.
Krider, R.E., & Weinberg, C.B. (1998). Competitive dynamics and the introduction of new products: The motion picture timing game. Journal of Marketing Research 35, 1–15.
Lehmann, D.R., & Weinberg, C.B. (2000). Sales through sequential distribution channels: an application to movies and videos. Journal of Marketing, 64(3), 18–33.
Maltin, L. (2002). Movie & video guide 2002 edition. New York: Signet Books.
Martin, M., & Porter, M. (2001). Video movie guide 2002. New York: Ballantyne Books.
Schindler, R., Holbrook, M.B., & Greenleaf. E. (1989). Using connoisseurs to predict mass tastes, Marketing Letters 1(1), 47–54.
Wedel, M., & Kamakura, W. (2000). Market segmentation: conceptual and methodological foundations, 2nd ed. Boston: Kluwer.
Weinberg, C.B. (2005). Profits out of the picture: research issues and revenue sources beyond the north american box office. In Charles Moul (ed.), A Concise Handbook of Movie Industry Economics. New York: Cambridge University Press, 163–198.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Hennig-Thurau, T., Houston, M.B. & Sridhar, S. Can good marketing carry a bad product? Evidence from the motion picture industry. Market Lett 17, 205–219 (2006). https://doi.org/10.1007/s11002-006-7416-0
Issue Date:
DOI: https://doi.org/10.1007/s11002-006-7416-0