Search results

Retailers are known to present tensile price claims (TPCs) stating high discounts to entice shoppers. Prior research on TPCs suggests that high TPC discounts increase purchase intentions. However, the current study proposes, first, that the TPC discount shifts expected price discount (EPD) and, second, that the gap between the actual price discount and the EPD influence perceptions of the discount deal. Support for these propositions would suggest that high TPC discounts will only be effective when they closely match the actual price discount. Therefore, the purpose of this paper was to evaluate the effectiveness of exaggerated maximum-discount TPCs.

Two experiments were used. Study 1 investigated the effect of exposure to a TPC on EPD. Study 2 examined discount discrepancy as a mediator of the relationship between a TPC and consumer perceptions (i.e. perceived savings and price fairness) and purchase intentions. PROCESS and ANOVA were used for the analysis.

This research showed that exposure to a TPC influenced consumers’ EPDs. As TPC discount increased, EPD increased and the discount discrepancy (i.e. actual price discount minus EPD) decreased (and, in some cases, became negative). The discount discrepancy influenced consumer perceptions of savings and fairness, as well as purchase intentions. Consequently, when the actual price discount encountered was not as large as the advertised TPC discount, the results showed a negative, indirect influence of exaggerated maximum-discount TPCs on consumers’ discount perceptions, mediated by the discount discrepancy.

Previous TPC studies found that the size of the TPC discount positively influences consumers’ discount perceptions, implying that larger discounts are more effective. However, this approach does not take into consideration the notion that larger TPC discounts increase consumer expectations about the size of discount and these expectations are used as a frame to evaluate a discount deal. The findings of the current research show a negative, indirect influence of exaggerated TPC discount on consumer perceptions and purchase intentions through discount discrepancy. Therefore, this study provides a new perspective to explain the influence of TPC discount size on consumer perceptions.

Marketers have been using discounts and freebies for sales promotion strategy for a long time, yet a dilemma concerning better promotion remains. The paper tries to address this issue through empirical research by classifying sales promotion based on their utility and relatedness to the product to which they are bundled.

Two hypotheses were drawn: there is a distinctive preference of sales promotional offering, when it is bundled with a product, and the preference of promotion varies with the product category it is bundled with; discounts by retailers are preferred over advertised discounts, but they negatively affect the credibility of the product The hypotheses were tested by a double‐staged experimental protocol. The first stage standardized the perceived price of the freebies, and the second stage consisted of a 2 × 2 × 2 mixed model experiment. The first hypothesis was tested with Friedman's Test and Wilk's λ, and the second hypothesis was subjected to t‐test and factor analysis on a four‐item scale.

Promotion type influences the rate of increase in market demand and is product category dependent. Promotional offerings which can be readily converted into monetary terms are more preferred to freebies but in the long‐run, they can affect the overall value of the product. Retailer discount is preferred over advertised discount but has a negative perception. Hedonic freebies are least preferred; but have a higher perceived value.

The study deals with the promotional choice of consumer durables and consumables. It is applicability to other product categories needs confirmation.

The findings can be useful for marketers in designing promotional strategies, especially in the consumer retail segment, new product marketing and brand extension situations.

The paper will help marketers design better and appropriate promotion vis‐à‐vis a product and its target consumers.

The study aims to investigate customers' emotional and behavioral responses to price promotion in omnichannel retailing through the integration of the expectancy-disconfirmation theory, feelings-as-information-theory and regret regulation theory.

An online survey was designed in Qualtrics and distributed by an online survey to collect data from 786 (main study) and 150 (a follow-up study) customers from the USA. The participants were randomly assigned to different scenarios related to the need to purchase a toothbrush, laptop or health supplement. After the first purchase, the participants received a discount on the same product that has just been purchased. The discount can be used at an online store or a physical store. The three levels of price promotion after the purchase were 10% (low), 25% (moderate) and 50% (high).

The study found that consumers are likely to feel more surprised and less discontented when being offered a higher discount. The emotions further significantly impact their anticipated regret. Further, different discount levels influence patronage intention and omnichannel usage via emotional responses and anticipated regret. These relationships are moderated by product involvement.

The study extends knowledge of price promotion and provides insights that can assist retailers in increasing the effectiveness of their sales promotion strategy. Addressing the lacuna in the current literature, which predominantly focuses on the cost and benefits analysis of sales promotion, the study revealed that cross-channel price promotion results in consumers' sophisticated emotional responses.

The purpose of this paper is to decompose and measure the microstructure of property investment returns for Tokyo’s residential property markets in as much detail as possible in comparison with office market.

Using enterprise value data for property investment trust companies composed of share prices available on capital markets, this study proposed a method of estimating property investment returns corresponding to changes in capital markets, and clarified the distortion in capitalization rate that are formed based on property appraisal prices.

The results for residential property showed that as building floor space increased, income and price increased while the discount rate decreased. In particular, a higher return could be obtained from office property than residential property by investing in larger-scale properties. Building age lowered asset price and income for both residential and office property, especially for residential property.

In Japan, investors believe that investment returns are high for properties close to the city centre, relatively new properties and those with large design or floor space. Therefore, this study first measured how asset prices, income and asset price–income ratios that comprise property investment returns change based on differences in these property characteristics. Second, the reliability/distortion of information that can be observed on the property investment market was measured. Furthermore, there was a significant divergence between discount rates and risk premiums formed by asset or space markets versus capital markets.

The differences of discount rate and risk premium formed by asset markets versus capital markets indicate that appraisal prices have biases. Thus, when it comes to property investment decisions, it is essential to make active use not just of property investment returns based on appraisal prices formed by asset markets but also information formed by capital markets.

A greater difference was generated in a shrinking market, suggesting that analysing property returns estimated on asset market information alone could lead to erroneous investment decisions.

This research is the first to use the enterprise value data from real estate investment trust companies composed of share prices available on capital markets for calculating discount rate and risk premium in property market.

Price is an important variable because it has a direct impact on a company’s profitability. However, there is limited evidence to support the effectiveness of competing strategies of fixed pricing and discounted pricing. As a result, both strategies are practised extensively in the industry. This paper draws on theories on affect, information processing, and pricing to provide a conceptual framework. The aim is to examine the effect of fixed pricing and discounted pricing on consumers’ affect and evaluation of products. Results from an experiment indicate that a fixed price format elicits more positively valenced thoughts and stronger positive affect than a discounted price format. This affective response, in turn, results in a less thorough processing of price information and, consequently, higher perceptions of quality and value for the fixed price format. Managerial implications of these findings are discussed.

This is the first REIT paper to seek to empirically examine potential influencing factors on the discounts and underwriting fees of Australian REIT rights issues.

Using a methodology similar to Owen and Suchard, and Armitage, a sample of 62 A‐REIT rights issues during 2001‐2009 is analyzed. A variety of potential factors influencing discounts and underwriting fees are explored.

Over A$20 billion was raised by A‐REIT rights issues during 2001‐2009 (this around three times that raised through A‐REIT initial public offerings during the same period). The mean offer price was discounted around 9.5 percent from the current market price and underwriting fees averaged 2.9 percent of gross proceeds raised – both substantially less than for industrial rights issues. The standard deviation of daily returns for the past year appears to influence the percentage discount offered to subscribers. This volatility was particularly noticeable in 2008 and 2009, during the global financial crisis, where new issues were discounted substantially so as to raise equity to repay debt. This historical risk variable appears paramount in determining the discounts to subscribers and fees to underwriters.

A‐REITs seeking to minimize the discounts offered to subscribers and to minimize their underwriting costs with rights issue equity capital raisings must first minimize their share price volatility.

This paper adds to the international costs of capital raising literature of REITs by examining such costs with A‐REIT rights issues and is the first paper to examine factors influencing these costs.

This research examines the effects of bundling format (partially‐bundled attributes vs. unbundled attributes) and framing of promotional discounts (rebate, discount and free‐options) on perceived quality, price acceptability, perceived value and subsequent purchase intentions. The results indicate that price reductions that are framed as providing “free” product options are perceived more favorably than conventional discounts which, in turn, are more favorable than rebates, holding the total amount of a price reduction constant. The results also suggest that unbundling of deals (or segregation of gains) enhances these perceptions.

Rewards from sales promotions may be either immediate (e.g. instant savings, coupons, instant rebates) or delayed (e.g. rebates, refunds). The latter type is of interest in this study. The purpose of this paper is to present the hyperbolic discounting framework as an explanation for how consumers delay‐discount rewards, and test whether this holds for both high‐price and low‐price product categories.

Data were collected by administering two online surveys to respondents. One survey presented choice scenarios between sales promotion formats for a high‐priced product (a laptop, n=154) and the other for a low‐priced product (a cell phone, n=98). Hyperbolic and exponential functions were then fitted to the data.

The hyperbolic function had a better fit than the exponential function for the low‐priced product. However, this effect was not evident in the case of the high‐priced product; no significant difference was found between the functions. The rate of discounting was greater for the high‐priced product than for the low‐priced product. Thus, for low‐priced products, rather than discount a reward rationally, consumers tend to discount the value of the reward at a decreasing rate.

This study addresses delay discounting in the context of a typical consumer buying situation. It also addresses the possibility of consumers applying different forms of discounting to products at different price levels and tests for the same. The results are of considerable significance for marketers wishing to offer price discounts to consumers. For low‐priced products, marketers seem to have more flexibility in delaying the reward, since the rate of discounting decreases for longer delay periods. At the same time, the discount rate for high‐priced products is higher than that for low‐priced products, hence delay periods may have a more critical role as discounted values fall steeply with an increase in delay to reward.

The purpose of this paper is to examine the conditions under which discount risk leads to closed‐end funds trading at a discount.

A model of investor portfolio choice is developed in which investors face proportional fees for holding managed funds but fixed transaction fees for purchasing other risky assets. The conditions under which investors will hold shares in closed‐end funds are derived.

It is shown that, with fixed transaction costs in the market for risky assets, investors with wealth below a certain threshold will hold pooled index funds that charge a proportional fee, rather than the market portfolio chosen by wealthier investors. If a portfolio of closed‐end index funds yields greater volatility of returns to investors than open‐end index funds (i.e. displays “excess volatility”), and charges the same fees, the closed‐end funds need to trade at a discount in equilibrium to attract buyers. The same applies to actively managed funds if higher fees fully reflect extra expected returns from the managers' skill.

A primary determinant of closed‐end fund discounts is discount volatility and co‐movement across funds.

Until now it has been argued that discount risk needs to be systematic (correlated with market returns) to be priced. The evidence that discount risk is systematic is weak. There is strong empirical evidence of excess volatility and co‐movement of discounts across closed‐end funds, which in our model are a sufficient condition for funds to trade at a discount, under plausible assumptions. This model thus provides a stronger argument that discount risk explains why discounts exist.

The purpose of this paper is to investigate the influence of the Italian real estate investment trusts (REITs)' governance and regulatory structure on the market prices discount to net asset values (NAV).

The hypothesis is that the overall regulatory design and the rules for prudential vigilance (i.e. governance rights, closed‐end form, leverage constraints, and mandatory listing) influence REITs' share value, both as market price and as NAV). In particular, the analysis focuses on the effects of the recent introduction of a shareholders' meeting in the articles of association of newly established REITs that pursues a better alignment of interests between managers and shareholders.

The original results show that the NAV discount decreases as long as time to maturity of the fund decreases. Conversely, the NAV discount is negatively affected by share turnover (as a proxy of the liquidity generated by the mandatory listing provision) and leverage. The regulatory provision of a shareholders' meeting appears to have improved the investors' governance capability having a positive impact on the NAV discount. The different sensitivity of market prices and NAVs to the regulatory variables investigated suggests the need to consider this dichotomy when defining or amending the regulatory set ruling REITs' operations and market dynamic.

This paper is the first in the Italian context to specifically consider the effect of the regulatory environment on the NAV discount. In particular, the effect of the regulatory provision of a shareholders' meeting has never been investigated before.