Organization's response to external disruptive events
Authors:   , Anand Divya 
Published: February 2023

[EMBARGOED UNTIL 8/1/2023] Essay 1: While implementing a change in distribution strategy, firms often end up creating negative ramifications for some of their channel partners. One such ramification is channel demotion, defined as a downward movement of channel partners in the focal firm's distribution network system. Despite its pervasiveness in industry practice (e.g., Nike (2017), Schaeffler Group (2016), Compaq (2002), Cisco (2001)), a systematic review of channel demotion remains unaddressed. Using multi-disciplinary theories, the goal of this essay is to conceptualize channel demotion and create a framework for firms to utilize when implementing such distribution change. This essay also uncovers numerous opportunities for developing critical insights on new distribution strategies by examining change implementation from a customer's perspective. Further, various research agenda and prospective theories in use are explored that can help future researchers establish a clear relevance and contribute to improving practitioner-oriented gaps in marketing. Essay 2: Tightening margins and emerging competitors motivate manufacturers to organize their distribution channels to profitably serve varied customers. One frequent strategy is involuntary intermediation: unilaterally terminating a customer's direct relationship and encouraging migration to a designated intermediary. Research has scarcely examined this strategy, which eliminates the customer's preferred direct relationship while promising potential efficiencies. This research examines customers' decisions when facing involuntary intermediation, specifically: (1) whether to migrate to the designated intermediary or to defect, and (2) for customers that migrate, how much to purchase subsequently from the intermediary. Analyzing a unique data on 600+ intermediated customers, drawn from both the manufacturer's as well as the intermediary's databases, the authors find that, despite almost 20 percent of the customers defecting, the manufacturer and intermediary benefit from this strategy. Interestingly, purchasing increases most among customers with the greatest proclivity to defect, indicating that devoting resources to persuade customers to migrate can pay high dividends for both manufacturer and intermediary. Essay 3: Celebrity endorser's negative publicity often spills over to the brand. While research on the economic effects of such events is widespread, we remain largely uninformed of their impact on the key reason why brands hire celebrities, i.e., to enhance customer engagement. This research aims to examine the effect of celebrity's negative publicity on brand's social media user engagement behavior, and determine the ideal response strategies for brands to implement in such crises. The uniqueness of this research lies in its contextual idiosyncrasies and empirical complexities: 1) the brand is not the primary transgressor, but is guilty by association, 2) any online communication by the brand without providing a definitive decision on the celebrity can become a catch 22 situation -- addressing the event will enhance its salience and not addressing it will signal brand's disregard, and 3) parsing out the stated effect from the noisy social media data is extremely challenging, especially when the negative publicity events have a high level of heterogeneity and must be studied as different treatment conditions. Using the Multi-Valued Treatment matching using the Generalized Boosted Model on a unique dataset of 235 hand-collected negative publicity events between 2016-19 from various archival sources including Twitter, Owler, Factiva, among others, I show that even though these negative publicities fall under the same broad umbrella of events, their impact varies substantially across groups, with Activistic and Professional negative publicity events creating the most negative impacts on brands social media engagement metrics--chatter volume, chatter valence, and sentiment ratio. Despite the effects being in the same direction, this research shows that brand's response strategy should be different for each categories of events. After the onset of an Activistic- or Personal- negative publicity event by the celebrity endorser, brands should reduce the valence (positivity) of their own posts on social media. However, when faced with Professional- or Societal- events, brands should reduce the valence of their own posts. Mangerial implications and contributions are discussed.