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Executive Summary
Structural equation modeling is a major analytic tool for marketers to model and test complex marketing activities and consumer behaviors. Traditionally, two distinct approaches have been employed for structural equation modeling: covariance structure analysis and partial least squares. A third alternative, generalized structured component analysis, was introduced recently in the psychometric literature.

The current research presents the technical underpinnings of generalized structured component analysis to marketers. Moreover, it compares generalized structured component analysis with the two traditional approaches to structural equation modeling to highlight their theoretical similarities and differences.

This research carries out a Monte Carlo simulation study to assess the relative performance of generalized structured component analysis with respect to the traditional approaches under a variety of experimental conditions. Overall, the results of the Monte Carlo analysis provide guidelines with respect to the conditions under which generalized structured component analysis is preferable to the two traditional approaches. Specifically, when the model is correctly specified, in general covariance structure analysis recovers parameters better than generalized structured component analysis and partial least squares. Conversely, when the model is misspecified, generalized structured component analysis tends to recover parameters better than the two traditional approaches. As a result, generalized structured component analysis may be regarded as a good alternative to partial least squares. Moreover, this approach may be recommended over covariance structure analysis unless correct model specification is ensured.

This research provides a greater understanding of the three currently available approaches to structural equation modeling and encourages marketing researchers to adopt generalized structured component analysis for use in many situations, particularly those in which they have little confidence that their models are correctly specified.

Biography
Heungsun Hwang is Assistant Professor of Psychology at McGill University. Previously, he was Assistant Professor of Marketing at HEC Montreal. He received a PhD in Quantitative Psychology from McGill University. In general, his research interests lie in the development and applications of quantitative methods and advanced modeling methodologies to a variety of issues and topics in psychology, marketing, and other fields of inquiry. His research has appeared in journals such as Psychometrika, Multivariate Behavioral Research, Behaviormetrika, and Computational Statistics and Data Analysis.

Naresh K. Malhotra is Nanyang Professor in the Nanyang Business School at Nanyang Technological University, Singapore, and Regents’ Professor Emeritus in College of Management at the Georgia Institute of Technology. He has been listed in Marquis Who’s Who in America continuously since 1997 and in Who’s Who in the World since 2000. He received the prestigious Academy of Marketing Science CUTCO/Vector Distinguished Marketing Educator Award in 2005. In an article by Wheatley and Wilson (1987), Professor Malhotra was ranked number one in the country on the basis of articles published in Journal of Marketing Research during 1980–1985. He also holds the all-time record for the maximum number of publications in Journal of Health Care Marketing. He was also ranked number one on the basis of publications in Journal of the Academy of Marketing Science since its inception through 1995. In a Journal of International Marketing editorial by Schlegelmilch (2003), Malhotra was ranked number one on the basis of publications in the International Marketing Review from 1992 to 2002. He is also ranked number one on the basis of publications in International Marketing Review since its inception (1983) through 2003. A study by Xu and colleagues in Asia Pacific Journal of Management (2008) also ranks Malhotra number one on the basis of publications in International Marketing Review from 1996 to 2006. In a landmark study by West and colleagues (2008) that examines publications in the top four marketing journals (Journal of Marketing Research, Journal of Marketing, Journal of the Academy of Marketing Science, and Journal of Consumer Research) over a 25-year period from 1977 to 2002, Professor Malhotra has three top-three rankings: number three on the basis of publications in all the four journals combined, number three on the basis of publications in Journal of Marketing Research, and ranked number one based on publications in Journal of the Academy of Marketing Science. He has published more than 100 articles in major peer-reviewed journals, including Journal of Marketing Research, Journal of Consumer Research, Marketing Science, Management Science, Journal of Marketing, and Journal of Academy of Marketing Science. His book Marketing Research: An Applied Orientation (Prentice Hall 2009) has been translated into Chinese, Spanish, Russian, Portuguese, Hungarian, French, Bahasa Indonesia, and Japanese, and it has several English editions. His book Basic Marketing Research: A Decision-Making Approach was published by Prentice Hall in 2008.

Youngchan Kim is Professor of Marketing at Yonsei University. He received his BS in Applied Statistics from Yonsei University and obtained his PhD in Quantitative Marketing from the University of Michigan. He has been Assistant Professor of Marketing Research in the University of Groningen. His interests lie in developing quantitative models, especially as they pertain to substantive marketing problems in product conception and development, market structure, consumer choice, market segmentation, and competitive strategy. He has published several articles in journals such as Journal of Marketing Research, Journal of Econometrics, European Journal of Operational Research, Service Industries Journal, International Journal of Advertising, Korean Marketing Review, Korean Journal of Marketing, and Journal of Consumer Studies. He has taught such courses as Marketing Management, Marketing Research, Product Management, Marketing Decision Models, Marketing Strategy, International Marketing, Marketing Information System, and Advertising and Promotion, and he has conducted various seminars. Currently, he is editor of Korean Journal of Marketing.

Marc A. Tomiuk is Associate Professor of Marketing at HEC Montréal. His substantive research interests revolve around the assessment of services, consumer behavior, and retailing. He has published several articles in journals such as Journal of Cross-Cultural Psychology, Journal of International Consumer Marketing, and Group and Organization Management, among others.

Sungjin Hong is Assistant Professor of Psychology at University of Illinois at Urbana–Champaign. He has published in Journal of Chemometrics, British Journal of Mathematical and Statistical Psychology, Journal of Educational Psychology, and Journal of Journal of Child Psychology and Psychiatry. His primary research interest is in the area of n-way component analysis.

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