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Signals, e.g. information released by firms about new products attract the attention and scrutiny of customers, competitors and other stakeholders. In product management, an important area of research focuses on the economic value of such signals. However, extant studies consider valuation effects of product signals independently, and largely ignore how the value of a product signal at launch depends upon prior preannouncements. This study aims to investigate how the dependence of new product development (NPD) signals on past preannouncements affects firms’ security prices.

The study develops a conceptual model that draws upon information asymmetry theories, i.e. signaling and agency theory to hypothesize the effect of firms’ product introduction announcements on security prices given two antecedent preannouncement types (costless and costly signals). Hypotheses are tested by conducting an event study analysis on a sample of 149 matched observations (product introduction announcement preceded by a certain type of preannouncement).

Empirical results confirm the hypothesis that positive valuation effects are observed during product launch that is preceded by initial costless product signaling. In contrast, for ex ante costly product signaling, launch events are not diagnostic enough to affect value. Since organizations’ NPD communications can revise investors’ prior beliefs, they need to be understood in more detail and managed strategically.

Valuation metrics can be noisy with a potential to influence information events. In addition, product introduction signals may be deployed more frequently in certain fast-paced industries, e.g. hi-tech.

Managers can incorporate signal dependence in product communications. For example, in costless ex ante product signaling situations, initial economic loss may be recovered through launch announcements. Furthermore, when costly signals have been used earlier, firms may economize on promotion costs during launch.

Past research has focused on assessing the economic value of new product signals independently, i.e. as discrete events. Absent is an examination of valuation effects due to the dependence of launch signals on prior preannouncements. This paper addresses the dependence gap, and empirical results show that even if firms do not deploy product signals ex ante, value can be created through ex post launch announcements.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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

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

Profitability considerations lead service providers to terminate service contracts with low-value customers. However, customers targeted by service contract terminations often take revenge through negative word-of-mouth (NWOM). Presently, it is unclear how service contract termination initiatives prevent this harmful side effect. The purpose of this study is to compare the effectiveness of common service contract termination initiatives for reducing NWOM of customers whose service contracts are being cancelled. The study results provide guidance for minimizing the downside of service contract termination.

This study distinguishes between service contract termination initiatives common in practice (preannouncement, explanation, financial compensation, apology and support in finding an alternative provider). Drawing on a multi-industry survey of 245 customers who have experienced service contract terminations in real life, the authors estimate regression models to link perceived service contract termination initiatives to NWOM.

All else equal, only preannouncement and support in finding an alternative are effective to reduce NWOM. This study also shows that the right choice of service contract termination initiatives depends on the context of the termination. Making a preannouncement, offering an explanation and providing support in finding an alternative are more effective in reducing NWOM when these actions are aligned with the contextual factors of relationship duration and competitive intensity.

This study shows that service contract termination needs to address several aspects of the service termination experience. The key implication for future research is that it matters in terms of NWOM how service contract terminations are performed.

This research identifies the service contract termination initiatives that are most effective to reduce NWOM after service contract termination in general and under consideration of the moderating roles of relationship duration and competitive intensity.

While most related studies have considered customer responses to the cancellation of other customers’ contracts, this study contributes to the scarce literature on the undesirable customer responses (such as NWOM) to the termination of their own contract. To the best of the authors’ knowledge, it is the first study in this emerging stream of research that accounts for the effects of process- and outcome-oriented contract termination initiatives on NWOM. To the best of the authors’ knowledge, it is also the first study to account for moderators of the effect of contract termination initiatives on NWOM, namely, relationship duration and competitive intensity.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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?

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.

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.

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.