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Article
Publication date: 1 January 1998

Paul Herbig and Brad O'Hara

A preannouncement is a formal, deliberate, publicly‐issued communication given before an actual event. Preannouncements are an increasingly applied concept of…

Abstract

A preannouncement is a formal, deliberate, publicly‐issued communication given before an actual event. Preannouncements are an increasingly applied concept of communication whereby a company shares information with an audience or group some weeks, months, or years before its formal introduction. It offers the media information such as financial information regarding prospective mergers, acquisitions or earnings reports. This article looks at who is inclined to preannounce, when it seems appropriate to do it, and to provide recommendations for preannouncement activities.

Details

Corporate Communications: An International Journal, vol. 3 no. 1
Type: Research Article
ISSN: 1356-3289

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Article
Publication date: 14 August 2017

Maria Sääksjärvi, Tripat Gill and Erik Jan Hultink

The purpose of this paper is to focus on the potentially positive role of rumors in generating curiosity about new products, and further shows how this prior knowledge…

Abstract

Purpose

The purpose of this paper is to focus on the potentially positive role of rumors in generating curiosity about new products, and further shows how this prior knowledge through rumors affects consumer responses to subsequent official preannouncements about these products.

Design/methodology/approach

Building on the seminal work by Rogers (2003) on the innovation-adoption process, the authors examine how two factors – product newness (incremental vs radical) and rumor ambiguity (ambiguous vs unambiguous) shape consumer interest (curiosity) toward new products.

Findings

Study 1 experimentally tests the assumption that incremental and radical new products may benefit from different types of rumors, and shows that radical new products benefit more from ambiguous rumors as compared to incremental new products in terms of increased curiosity toward the product. Study 2 links rumors to preannouncements, and shows that rumors set expectations that become confirmed or disconfirmed by preannouncements. The results show that the curiosity evoked by the rumor has a significant impact on purchase intentions toward the new product, especially when they are confirmed by the preannouncements about the same product.

Originality/value

There is scant research investigating how rumors may shape consumer expectations about new products despite the prevalence of rumors in the marketplace, and this research provides a first outlook on the positive role that rumors play in the marketplace.

Details

European Journal of Innovation Management, vol. 20 no. 3
Type: Research Article
ISSN: 1460-1060

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Article
Publication date: 1 December 2001

Leonard C. Soffer

Reviews the literature on earnings preannouncements (EPs) and investigates their use as a communication strategy and the difference in investor’s reactions to occasional…

Abstract

Reviews the literature on earnings preannouncements (EPs) and investigates their use as a communication strategy and the difference in investor’s reactions to occasional, regular and one‐off EPs by using 1995‐1997 US data on 1,444 EPs. Finds that in general, market reactions to PSs is larger than to formal earnings announcements, that about half the EPs were one‐offs and that firms tended to release all of their bad news but only some of the good. Analyses abnormal returns to suggest that investors anticipate earnings surprises better for repeated EPs, although there is no evidence that firms using them repeatedly choose their amounts differently from one‐off announcers. Briefly considers consistency with other research and avenues for further research.

Details

Managerial Finance, vol. 27 no. 12
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 15 July 2020

Debi P. Mishra, Gizem Atav and M. Deniz Dalman

This paper aims to investigate if product pre-announcement effects measured using stock market returns conform to the predictions of two competing consumer marketing…

Abstract

Purpose

This paper aims to investigate if product pre-announcement effects measured using stock market returns conform to the predictions of two competing consumer marketing theories. In particular, while buzz marketing theory indicates a direct positive effect, information asymmetry theory suggests an influence contingent upon evidence. The study also investigates whether a pecking order of performance effects exists across different signaling situations.

Design/methodology/approach

The final sample consists of 219 product-preannouncements reported in the Wall Street Journal between 2005 and 2015. The standard event study methodology was used to test for performance effects.

Findings

The results show that preannouncements with evidence alone significantly outperform those with buzz alone, and announcements containing buzz and evidence. Also, buzz acts as a salient moderator of the relationship between evidence and performance. In addition, company size also affects the evidence-performance relationship, with smaller firms benefiting more from evidence than larger firms.

Research limitations/implications

The event study method assumes efficient markets and deals with publicly traded companies.

Practical implications

Managers can allocate resources wisely by deciding whether to invest in evidence or buzz in their pre-announcements.

Originality/value

In contrast to extant research that primarily investigates contingency effects, this study identifies how an important moderator, i.e. buzz affects performance.

Details

Journal of Consumer Marketing, vol. 37 no. 7
Type: Research Article
ISSN: 0736-3761

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Article
Publication date: 21 April 2020

Xinzhe Lin, Yina Li, Xiaolan Wan and Jiuchang Wei

The purpose of this paper is to examine the effects of cross-border mergers and acquisitions (M&As) by firms in the emerging marketing on stock market cumulative abnormal…

Abstract

Purpose

The purpose of this paper is to examine the effects of cross-border mergers and acquisitions (M&As) by firms in the emerging marketing on stock market cumulative abnormal returns (CARs). This research focuses on the acquiring firms in emerging markets and broadens the existing scope which highlights the M&As by firms in developed countries.

Design/methodology/approach

Regarding the controversial argument on the effect of cross-border M&As, the authors introduce a resource-based theory to explain the motivation of M&As by Chinese firms, conduct an event study analysis of 472 international acquisitions by Chinese firms from 2010 to 2015 and indicate cross-border M&As as a positive signal in the stock market.

Findings

The results reveal that cross-border M&As result in significantly positive CARs in a short term for the acquiring firms listed in mainland markets but not for that in the Hong Kong market. Furthermore, consistent with signaling theory and the investors’ heuristic thinking in decision-making, investors may adopt the technological innovation capability of the country where the target firms locate, and the acquiring firm’s preannouncement in shaping their positive judgment of the acquiring firm’s near future performance.

Originality/value

The authors distinguished the responses of the investors from the mainland and Hong Kong stock markets and investigated how the knowledge of the national innovation capability of the target firm and acquisition preannouncement influence the investors’ interpretation of the cross-border M&As as a market signal.

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Article
Publication date: 8 March 2011

Lijun Zhang and Meng Su

Although consumers are viewed as one of the important target groups of new product preannouncements (NPPs), little existing literature focuses on the NPP's consequences…

Abstract

Purpose

Although consumers are viewed as one of the important target groups of new product preannouncements (NPPs), little existing literature focuses on the NPP's consequences from consumer perspective. To fill up this research gap, this paper explores how a NPP signal influences consumer purchase intention and how its influences vary across consumers.

Design/methodology/approach

Based on a scenario‐based survey with different new cellular phone preannouncement contexts, this paper examines impacts of brand, prior vaporware history, and innovativeness conveyed by NPP signals, as well as consumer characteristics, on purchase intentions. A logit regression and a hierarchical Bayesian Logit regression are applied to test effects of NPP signal and consumer factors, respectively.

Findings

The empirical results show that consumers may mainly rely on brand and prior vaporware history to decide whether to purchase this new product after it is launched. They are more likely to purchase a preannounced new product with strong brand, or from a company without prior vaporware. The results also demonstrate that the brand and vaporware impacts on purchase intention are moderated by consumer product knowledge, NPP experience, and risk attitude.

Originality/value

Following the competitive signal interpretation process model in signaling theory, this paper first provides and empirically examines an overall framework of NPP impacts on purchase intentions from the consumer perspective, which may contribute to the preannouncement literature. The findings also provide useful insights to help companies to make right NPP decisions.

Details

Nankai Business Review International, vol. 2 no. 1
Type: Research Article
ISSN: 2040-8749

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Article
Publication date: 10 August 2021

Rob Angell, Paul Bottomley, Matthew Gorton, Ben Marder and Antonia Erz

Sponsorships involving foreign brands are ubiquitous, but those involving a company from an animosity-evoking country can adversely affect rather than enhance domestic…

Abstract

Purpose

Sponsorships involving foreign brands are ubiquitous, but those involving a company from an animosity-evoking country can adversely affect rather than enhance domestic consumers' attitude towards the brand. This paper explains the mechanisms by which brand denigration occurs, introducing and validating a model of the animosity transfer process as well as considering if various framing and timing strategies attenuate or lead to adverse consumer responses.

Design/methodology/approach

Study 1 tests the animosity transfer model, utilizing a scenario in which English consumers respond to a German brand sponsoring the England soccer team. Study 2 assesses the generalizability of the model in the context of Indian consumers' responses to sponsorship of their cricket team by a Chinese company, and the extent to which an honest framing of the sponsorship choice through the announcement affects outcomes. Study 3 returns to an England–Germany country dyad, testing whether priming consumers with information about the sponsorship prior to a full announcement, attenuates or intensifies the impact of animosity on the studied outcomes.

Findings

The three studies demonstrate that when consumers learn of a sponsorship, it triggers an evaluation process in which the agonistic emotion (anger) they feel plays a pivotal role. More intense emotional appraisals weaken perceptions of sponsor-sponsee congruence, which together act as consecutive process variables mediating the relationship between animosity and sponsorship outcomes. Framing the sponsorship announcement with an honest justification for the partnership can improve outcomes but not amongst those with the highest animosity. Providing consumers with an advanced warning (preannouncement) of the sponsorship also amplifies consumers' unfavorable evaluations showcasing how difficult animosity is to manage in this context.

Originality/value

The animosity transfer model aids understanding of the mechanisms by which animosity affects brand attitude for foreign (out-group) sponsors. It identifies how animosity generates agonistic emotions and in turn weakens perceived fit between the sponsor and sponsee, leading to adverse consumer responses.

Details

International Marketing Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 7 October 2019

Qian Hao, Dayong Dong and Keke Wu

This paper aims to study the following two questions. Do earnings announcements stimulate investors to participate in online discussions? Does online investment forum…

Abstract

Purpose

This paper aims to study the following two questions. Do earnings announcements stimulate investors to participate in online discussions? Does online investment forum participation affect the market’s reaction to earnings news?

Design/methodology/approach

The authors collect all the online posts, which were related to the internet service companies and posted in a Chinese financial forum, guba.eastmoney.com (Guba), during the period between June 30, 2008 and December 31, 2015. Multiple linear regression analysis is used to test the questions.

Findings

The study finds that the earnings announcements induce online discussion. In addition, before the earnings announcement, online posting activity does not affect earnings response coefficient but can weaken the positive association between the magnitude of the upcoming earnings surprise and abnormal trading volume. In contrast, after the earnings announcement, online forum participation can facilitate the incorporation of earnings surprise into the price.

Originality/value

This study contributes to the literature studying the impact of social media on market reaction to earnings news by providing evidence that the price discovery process can be affected by the online investment forum. Several policy implications are also provided.

Details

International Journal of Accounting & Information Management, vol. 27 no. 4
Type: Research Article
ISSN: 1834-7649

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Article
Publication date: 17 October 2018

Jennifer D. Chandler, Rommel Salvador and Yuna Kim

As a social media platform, Twitter enables direct, continuous and real-time communication across many markets simultaneously. Drawing on speech act theory (SAT), this…

Abstract

Purpose

As a social media platform, Twitter enables direct, continuous and real-time communication across many markets simultaneously. Drawing on speech act theory (SAT), this study aims to view tweets as “speech acts” and explores whether language and brand on Twitter influence firm value.

Design/methodology/approach

The frequency of two language types (accommodative and defensive) used on four corporate Twitter accounts for Sony and Microsoft was observed during the product launch periods of PlayStation 4 and Xbox One, respectively, covering 5,056 tweets. A linear mixed model was used to analyze whether language and brand influence firm value.

Findings

Results show that accommodative language used by firms on their corporate Twitter accounts has an overall negative influence on firm value the following day, whereas the use of defensive language has a positive influence. Moreover, the effects of these language types on firm value are attenuated when the Twitter accounts are personal, compared to the brand accounts.

Research limitations/implications

This study focuses on one type of social media platform (Twitter) and one product category (video game consoles). Future studies should investigate other platforms and product categories to improve generalizability.

Practical implications

Managers should carefully strategize their use of Twitter, especially the use of language and account type, as they can significantly affect firm value.

Originality/value

This study applies SAT to explain how language and brand on Twitter can influence firm value.

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Article
Publication date: 1 March 2002

Ahmed Riahi‐Belkaoui

Refers to previous research on the firm characteristics which affect the relationship between unexpected returns and unexpected earnings to suggest that multinationality…

Abstract

Refers to previous research on the firm characteristics which affect the relationship between unexpected returns and unexpected earnings to suggest that multinationality may proxy for all of them. Develops mathematical models to investigate the effect of multinationality and applies them to 1995‐1999 US data on multinational firms. Describes the methodology and presents the results, which suggest that firms with relatively more multinationality have smaller, less significant earnings response coefficients and vice versa. Concludes that multinationality is a good proxy for firm size, quality of preannouncement information, earnings predictability etc.

Details

Managerial Finance, vol. 28 no. 3
Type: Research Article
ISSN: 0307-4358

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