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The current research aims to explore the differential effects of bundling products with guarantees (explicit promises of product performance) or with diagnostic kits (kits that allow the user to measure actual product performance) on pre‐purchase product evaluations. It is proposed that when product performance evaluation relies on external sources of information, the effect of a guarantee exceeds the effect of a self‐diagnostic kit. However, when product performance evaluation relies on internal information or self‐reports, product evaluations are better leveraged by an offer of a diagnostic kit than by a guarantee.

The first study examines the differential effects of guarantees and of diagnostic kits on pre‐purchase evaluations of hypothetical products as a function of the mode of evaluation of product performance (internal versus external information sources). The second study explores these effects on pre‐purchase evaluations of actual products, and further includes a control condition.

The findings confirm the hypothesis that a guarantee (diagnostic kit) leads to higher product evaluations than a diagnostic kit (guarantee) when product performance evaluation relies on external (internal) sources of information.

The relative benefits of bundling guarantees or diagnostic kits to product offers have not been examined to date. The current research not only demonstrates this relative effect and its underlying mechanism, but also identifies the product attributes that contribute to this effect.

In financial planning, customers are typically confronted with choosing a premium payment scheme when investing in a mutual fund, which is often equipped with an investment guarantee to provide downside protection. Guarantee costs may thereby also be charged differently depending on the provider. The paper aims to investigate the impact of the premium payment method on different performance measures for a mutual fund with an investment guarantee.

The paper compares a fund with annual and upfront premiums as well as constant guarantee costs versus the guarantee price as an annual percentage fee of the fund value, always ensuring that the present value of premium payments is the same for all product variants. The paper further studies the relevance of the guarantee level and the contract term.

The results emphasize that even though the present value of premiums paid into the contract is the same, the type of premium (upfront versus annual) as well as the type of guarantee cost (upfront versus annual fee) has a considerable impact on the performance.

Providers can thus make a product more attractive for consumers by individually adjusting the premium scheme depending on their preferences and by making the resulting risk-return-profile transparent, while keeping the other contract characteristics unchanged (e.g. extent of the guarantee).

To date, there has been no comprehensive analysis with specific focus on the impact of different premium payment schemes (in particular with respect to savings premiums and guarantee costs) on risk and return of a mutual fund with otherwise given contract characteristics such as the underlying fund strategy and the investment guarantee, even though the premium scheme itself can already have a considerable impact on the terminal payoff distribution and thus risk-return profiles. In addition, such an analysis can provide important information for consumers and providers in designing and choosing attractive products by simply adjusting the premium scheme (if possible) instead of or in addition to changing other product features.

Although service guarantees are generally believed to give firms a competitive edge, much remains to be learned about the value of, and return on, this customer relationship management strategy. This study aims to examine the influence of implicit service guarantees on two important aspects of business performance: customer satisfaction and return on investment.

The study hypotheses are tested utilizing three different sources of secondary data to assess the study variables.

Over a four-year period, top implicit service guarantee provider firms generated superior market and financial performance in terms of customer satisfaction and return on investment than their industry peers

Research limitations/implications

The number of top implicit service guarantee provider firms used to test the study hypotheses is relatively small due to inherent constraints associated with using secondary data. Testing more exemplar firms against their respective industry averages would have been preferable and may have yielded even more robust findings.

Firms recognized for leveraging customer service skills and resources to “make right” any sources of customer dissatisfaction may achieve positional advantages associated with superior business performance. Therefore, focusing on building a firm's reputation for exceptional customer service provision may be a more effective approach than offering an explicit service guarantee.

This research offers support for contentions that customers value the implicit service guarantees associated with firms recognized for outstanding customer service and responds to calls for research that evaluates the specific information that must be communicated to customers to enhance the credibility and effectiveness of service guarantees.

The purpose of the paper is to examine the law relating to different types of guarantee schemes and the circumstances in which they are used to safeguard against default risks in international commercial practice. Different types of guarantee schemes are used in different contexts, often depending on which types and the purpose they have been sought.

The paper was undertaken by evaluating secondary data sources, empirical examples and case law to underscore the pitfalls commercial parties need to always bear in mind with regard to guarantees and factoring and their usage in international commercial practice.

The paper articulates the law relating to different types of guarantees and how they are harnessed to provide security against default risks in international commercial practice. By the very nature of guarantees, they tend to be in high demand in times of economic uncertainties when banks and other financial institutions find it less prudent to lend to borrowers without ensuring some form of security against potential defaults.

There are many different types of guarantee schemes clients can always opt for, but some of them are never written about as much. There is therefore limited data available to inform policy decisions by those who seek to use them. Lack of adequate information on any financial produces, leave alone guarantees, is not good for businesses and the public in terms of how to safeguard against risks inherent in usage and practice of guarantees. In this similar respect, there were not enough data available to evaluate the varied context in which guarantees are used.

There are limited data available on guarantees, and because they are speciality products, the way they are used in practice can never be overlooked. It was necessary to publish this paper not only to address the foregoing need but also to discuss different types of guarantees and enhance understanding on their usage and practice. The paper articulates the law relating to guarantees and what guarantors need to always bear in mind before they accept to sign contracts of guarantees.

Guarantees are important for markets to operate efficiently. Their usage and practice has wide implications for various stakeholders such as banks, businesses, economies, governments and people, especially where contracts relating to them are not constituted and executed properly. Defaults on borrowed loans can lead banks not to lend money to businesses and subsequently choke them of a source on which many depend.

This is the first paper that articulates the close relationship between guarantees, factoring and trusts. The paper has articulated the varied contexts in which each of the foregoing speciality products is harnessed in practice. Although this paper was written largely by reviewing and internalizing secondary data sources, it was done in a distinctive way to underscore the objectives it was written to achieve.

The lessons of quality management apply to services as well as tangible goods. Awareness also has been increasing that services, like tangible goods, can be guaranteed as a means of implementing a total quality management (TQM) orientation in the organization. While higher education has been exploring some of the tenents of TQM, it has been slow to embrace the power of service guarantees. In this conceptual article we present a system of service guarantees designed to foster a TQM orientation in higher education. We propose that institutions consider a system of guarantees aimed at three primary constituent groups – students, faculty, and employers – over the short, medium and long term. The rationale and implications of the guarantee system are explored, and possible impediments are discussed.

The purpose of this paper is to show how performance‐based contracting functions as an enabler of service innovation by maintenance contractors.

A postal survey of medium‐sized maintenance employers was carried out. The questionnaire and findings were mapped and analysed combining existing models of service innovation and service quality.

As a consequence of the survey, performance‐based contracting maintenance companies implement innovations in their service concept, client interface and service delivery system to guarantee the quality of their services. The maintenance contractors have launched new, improved or better competing services for their own organisation. Existing services are implemented in a new environment incorporating small incremental innovations.

Maintenance companies do not solely address all business innovations as consequences of performance‐based contracting. Performance‐based contracting of, for example, building services may by the different nature of the maintenance strategies and activities lead to somewhat other outcomes.

There is very little literature on maintenance contractors as service providers and service innovators. This paper provides insights in innovations by maintenance contractors as well as the needed additional knowledge and competences of the contractors acting as maintenance‐engineering consultants.

The purpose of this paper is to review characteristics and functions of an advance payment guarantee (AP-Bond), and to analyse some legal and practical issues concerning a “reduction clause” in an AP-Bond under an overseas construction contract.

This paper compares relevant provisions of the URDG 758, the UN Convention, the ISP 98, and the FIDIC Silver Book, and also cites relevant case laws of the USA, UK and Korea. This paper also refers many Korean scholars’ views on characteristics of an independent guarantee including an AP-Bond.

A demand for payment under an AP-Bond shall not be honoured in the event that an employer wrongfully refuses to issue documents required for reduction of an AP-Bond. A beneficiary shall not be favoured by independence nature of an AP-Bond in case of fraud or abuse of right.

This paper originally analyzes a “reduction clause” in an AP-Bond. This paper provides logics that a demand for payment shall not be honoured in the event that a beneficiary wrongfully refuses to issue documents required for reduction of an AP-Bond.

In the UK, following a period of exponential growth, the budget hotel market is maturing. In the classic product/service lifecycle model, this phase of development in a market is usually associated with strategies which engender strong brand loyalty; which strengthen and underpin market share; which develop competitive relative positioning and which serve to emphasize, via differentiation, unique brand benefits or propositions. This paper considers the strategies of Whitbread Travel Inn who, as the market leader, launched their 100 per cent Good Night satisfaction guarantee (or your money back) across the brand in 2001. To begin with a review of the budget hotel market is undertaken. This is followed by an analysis of the achievements of the guarantee over its first 18 months of operation, and consideration of the training approach that inculcated a new mind‐set within the organization. The paper concludes by reiterating the successes achieved and celebrates an award winning performance.

The purpose of this paper is to explore the application of Kafalah in the practice of Islamic banking in Malaysia generally and ascertain applicable rules governing the application under relevant legislations and Shariah. The study also aims to examine the legislations in the light of Shariah provisions governing Kafalah and propose amendments.

This is a qualitative research where primary data sources mainly legislations and secondary sources comprising of articles and books on the subject of Kafalah were examined. It is an exploratory legal research that primarily focuses on library studies and adopts doctrinal approach for content analysis of data from the identified sources.

Kafalah is widely used in Islamic banking in Malaysia with primary or secondary application in structuring such products/services as personal guarantee, bank guarantee, Islamic credit card among others. The substantive law applicable to Kafalah in Islamic banking in Malaysia is the Contracts Act 1950 as decided cases indicate. However, provisions of the Act are at variance with rules of Shariah applicable to Kafalah on absolution of guaranteed debtor, multiple guarantors’ liability towards guaranteed sum as well as recourse and recovery from principal debtor.

This research explored the practice of Kafalah in Islamic banking under Malaysian legal framework based on the available literature. The research does not embody an empirical evaluation.

This research suggests, with respect to the identified issues, an amendment to the Act for clarification as follows: that recourse and recovery from principal debtor is only where creditor has requested guarantor to settle outstanding debt, that presence of surety does not absolve principal debtor from his original liability and that multiple guarantors stand as having equal responsibility towards guaranteed amount. The research findings will assist policy and law makers to harmonize the relevant laws with the Shariah to facilitate sustainable development of Islamic banking.

The purpose of this paper is to present μ-synthesis-based robust attitude trajectory tracking control of three degree-of-freedom four rotor hover vehicle.

Comprehensive modelling of hover vehicle is presented, followed by development of uncertainty model. A μ-synthesis-based controller is designed using the DK iteration method that not only handles structured and unstructured uncertainties effectively but also guarantees robust performance. The performance of the proposed controller is evaluated through simulations, and the controller is also implemented on experimental platform. Simulation and experimental results validate that μ-synthesis-based robust controller is found effective in: solving robust attitude trajectory tracking problem of multirotor vehicle systems, handling parameter variations and dealing with external disturbances.

Performance analysis of the proposed controller guarantees robust stability and also ensures robust trajectory tracking performance for nominal system and for 15-20 per cent variations in the system parameters. In addition, the results also ensure robust handling of wind gusts disturbances.

This research addresses the robust performance of hover vehicle’s attitude control subjected to uncertainties and external disturbances using μ-synthesis-based controller. This is the only method so far that guarantees robust stability and performance simultaneously.