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This study examines the effect of credit card teaser rates on consumer indebtedness and the revenue generated by new customers.

A unique dataset from a national bank in the United States of America is utilized to employ a relatively new method called the covariate balancing propensity score matching, which measures the causal effects of teaser rates.

The results indicate that offering teaser rates improves the revenue generated by customers by indirectly increasing indebtedness. Such offers increase customers' willingness to borrow at regular interest rates that are significantly higher than the teaser rate – the “spillover effects.” Interestingly, customers who pay off their promotional balances before the termination of the promotional period borrow even more at regular rates than customers who do not pay off their balances timely.

The results can assist managers of credit card companies in measuring the value of teaser rates more accurately. Furthermore, the results have implications for public policy aimed at reducing credit card debt by enhancing the understanding of credit card customers' borrowing behavior.

To the authors' knowledge, this is the first study that documents the direct and indirect impacts of teaser rates on credit card customers' borrowing behavior and the resulting bank revenue.

Promotional support, as a push strategy, that manufacturers use to encourage retailers to carry their products needs retailers' cooperation. This study investigates the effects of retailers' fashion and price orientations on manufacturers' offerings of and retailers' cooperation with promotional support. Twenty‐one promotional support items applicable to the apparel retailing were studied. Questionnaires completed by 137 US apparel retail buyers via a modified national mail survey were analyzed. A factor analysis determined four factors: sales support, ad/display materials, monetary support, and selling aid samples. MANCOVAs revealed that the effects of price orientation on both offering frequency and cooperation level were significant. The effects of fashion orientation were not significant. For sales support and selling aid samples, the differences in offering frequency and cooperation levels were found among the different levels of price orientation groups. Monetary support was found most favorably accepted by retailers, regardless of price orientation or fashion orientation.

The authors offer a new approach to segment credit card customers by classifying customers into two unobserved (latent) segments: opportunistic and needy.

The authors develop a finite mixture model to estimate customers’ tendency to borrow using the three alternatives available to them—promotional cash advances, regular cash advances and retail balances.

The results support the presence of at least two segments among credit card customers. The authors find that relative to opportunistic individuals, needy customers are typically more sensitive to interest rates. Additionally, the results indicate that offering promotional cash advances to current credit card customers increases their sensitivity to regular interest rates. Furthermore, the findings indicate that needy customers tend to have a higher stickiness in their debt. In the post-estimation analyses, the authors observe that needy customers generate more revenue than opportunistic customers. Interestingly, the bank does not perform well in targeting needy individuals and targets both groups with the same probability.

The authors argue that teaser rates attract at least two segments of borrowers—the “needy” segment, which is more likely to be cash-strapped, and the “opportunistic” segment, which looks at these teaser rates as an opportunity. However, banks do not observe segment membership. Hence, the authors offer a new approach to identifying these segments and show that understanding the behavior of these latent segments could help a bank target profitable customers more effectively.

The exponential growth of organised retail has led to competition among mall retailers with the use of promotions to increase traffic to the stores. The footfall in the malls is dependent on the sales generated by various retail stores located in the malls. The current research analyses the role of promotions used by the retailers located in Indian malls in improving consumers’ commitment towards the mall. The purpose of this paper is to examine the influence of culture, personality traits like value consciousness, price consciousness and coupon proneness, and promotions used by retailers in malls on consumers’ commitment towards the malls.

Eight malls from six cities were selected by popularity and footfall. Mall-intercept technique along with systematic sampling was used to collect data from 453 mall shoppers using a self-administered questionnaire. Structural equation modelling was used to analyse the data.

Retailer promotions were categorised under discounts, promotional offers and loyalty cards. The findings suggest that cultural values of long-term orientation and masculinity have an impact on consumers’ perceptions towards discounts, promotional offers and loyalty programmes. Different promotional strategies had varied responses from consumers.

Mall retailers can use the findings to design promotions according to the cultural values of masculinity and long-term orientation. Loyalty programmes can symbolise status and long-term relationship with retailer. Commitment towards retailers and consequently malls could be enhanced through discounts and promotional offers. Different promotional strategies can be used to target price-conscious consumers and increase footfall in the stores. The linkages between cultural dimensions and promotional techniques would be helpful in targeting different consumer groups by designing promotions which are in line with cultural values.

The research extends the existing literature on mall retailing by analysing the importance of cultural dimensions on sales promotions strategies used by retailers in malls. The study establishes that perceptions towards retailer promotions differ across cultures. Different promotions offered by retailers generate varied response from consumers across different cultures which would influence their commitment towards malls.

This study aims to understand the effect of cultural dimension (individualism/ collectivism) on promotional rewards (social or economic) resulting in incentivizing consumers to engage in electronic word-of-mouth (eWOM), further impacting their repurchase intentions.

In Study 1, a 2 (culture: individualism vs collectivism) × 2 (promotional rewards: social vs economic) between-subjects design was used. Structural equation modeling was used to test the hypotheses. In Study 2, culture was measured instead of just being manipulated. The authors used regression analysis in this study.

Owing to the characteristics of collectivistic individuals, consumers in collectivistic cultures were more likely to respond to social rewards as an incentive to engage in eWOM. However, consumers in individualistic cultures were more motivated to engage in eWOM when economic rewards were offered.

Despite the global nature of eWOM, little research has explored the effects of cultural traits on consumer response to amplified eWOM strategy. Additionally, though many organizations now offer various promotional incentives to reviewers, little research has explored the effects of promotional offers on a reviewer’s subsequent behavior, and no research has explored the relationship between cultural dimensions and current and future response to promotional eWOM rewards.

This study aims to analyse what type of premium, hedonic or utilitarian, is preferred in a promotional context. Additionally, it seeks to examine the role of affective and cognitive reactions in decision processes where utilitarian and hedonic premiums are involved.

Three experiments were conducted. A single factor within-subjects design was employed, with the nature of the premium (hedonic/utilitarian) as the treatment factor. Respondents were asked to make their choice between two promotional offers. Affective and cognitive reactions were measured. Regression analyses were conducted to test the hypothesized effects.

The results show that hedonic premiums are preferable to utilitarian ones in a promotional context, other characteristics of the premium (e.g. premium attractiveness) being equal. The findings also identify that a preference for the hedonic/utilitarian premium is more likely to emerge when affective/cognitive reactions are incited, and indicate that the nature of the preferred premium determines the mediating effect of cognitive reactions.

The paper only focuses on the hedonic/utilitarian nature of the premium. However, premiums come in very different forms and several characteristics – such as a premium with a relatively low price, the reception delay of the premium, and the perceived fit between the product and the premium – may reverse the relative preference for hedonic premiums.

The hedonic vs utilitarian nature of the premium should be considered when planning premium promotion. It appears that the use of more hedonic premiums increases the effectiveness of promotional actions alongside other variables such as premium attractiveness, the promotional benefit level or the product-premium fit. Furthermore, the type of premium offered influences the role of affective and cognitive reactions aroused during shopping. Thus, the nature of the premium may influence the reactions of consumers when participating in promotional actions.

The research extends the factors that may explain the effectiveness of premium promotions, since few studies to date have focused on the hedonic or utilitarian nature of premiums.

This paper aims to examine whether consumers’ appreciation of promotional gifts exceeds firms’ cost of providing these gifts. The paper also compares characteristics of appreciated and unappreciated gifts.

The authors surveyed 1,289 college students in five European countries. The authors use willingness to accept cash (WTA) for an item to assess consumers’ appreciation of promotional gifts. They then compare WTA to firms’ estimated cost of providing the gifts.

On average, consumers’ appreciation of promotional gifts is 2.4 times the estimated cost of these gifts to sellers. Appreciated gifts tend to be less costly, tend to accompany more expensive purchased items and are more likely to complement these items. The results also reveal that more expensive items come with more costly gifts, although the gifts’ cost increases less than proportionally with the associated items’ price. The gift items are appreciated by men more than women.

This study enriches the literature on promotional gifting by introducing a simple measurement that can help firms decide whether to use gifts or discounts to promote their products.

The underlying thesis of this paper is that consumers will infer that the costs of production of a product that is offered free are low, and this will reduce the price they are willing to pay for the product when it is a stand‐alone offering.

Two laboratory experiments examine how consumers respond to products that have been offered as “free gifts with purchase” of another product.

Study 1 shows, that when an economically identical offer is framed as a joint bundle (Buy X and Y for $), compared with when it is framed as a “Buy one, get one free” offer, consumers are willing to pay less for the product offered “free.” Study 2 shows that, when a product is given away “free,” then consumers are willing to pay less for it as a stand‐alone product, especially when the original promotional offer does not include the price of the free gift.

Results imply that the design and communication of consumer promotions affect the price consumers are willing to pay for a product.

Managerial implications for the design and communication of consumer promotions are discussed.

The paper adds to the growing body of research that shows that a price promotion has more than just an economic effect; it also has an informational effect through which it affects consumer responses.

In pharmaceutical marketing, salespeople require promotional instruments to satisfy and retain their customers (physicians), but companies ignore the need because of the costs involved. It appears that the importance of promotional support is understood differently by managers and sales representatives. This study aims at developing a new construct called “promotional support”, as a resource support provided to salespeople to help them satisfy customer needs and achieve sales goals.

A detailed review of literature is followed by in-depth interviews to create items for the construct “promotional support”. Substantive validity is performed for identification of items measuring the construct. To initially validate the measures, a vignette study is performed. Formative index development procedure is followed. Data from a sample of 124 pharmaceutical sales representatives are collected and analyzed.

A formative construct is developed which possesses convergent (redundancy analysis) and nomological validity. The results of post hoc validation tests like confirmatory tetrad analysis and inter-item correlation are satisfactory and confirm the authors’ conceptualization.

The scale requires external validation by testing it with different samples such as managers of pharmaceutical firms.

This study will help managers of pharmaceutical firms gain insights into the role and importance of promotional inputs given to their sales representatives.

This study uses the formative scale development procedure to develop promotional support. This construct can be used to understand the effect of promotional support given to pharmaceutical sales representatives on other constructs, which in turn helps in theory-building.

To evaluate the awareness and behaviours of Malaysian consumers towards sales promotional tools such as, coupons, price discount, free samples, bonus packs, and in‐store display in the purchase of low involvement products.

The paper also recognises that certain demographic factors such as education and income of consumers could potentially confound the observed relationships hence, these factors were controlled. A total of 312 consumers in Kota Kinabalu, Malaysia were surveyed using a structured questionnaire.

The results show that price discounts, free samples, bonus packs, and in‐store display are associated with product trial. Coupons do not have any significant effect on product trial.

Only one category of product was considered. None were high involvement so these need further research.

Greate understanding of how Malaysian customers respond to the various sales promotions therefore increased alitity to pich the appropriate promotional miso.

The level of education appears to have no bearing on consumers’ preferences.