Consumers’ multifaceted deal knowledge in a grocery retail setting

Despite its relevance to retailers, studies of consumers’ deal knowledge have been few. This study explores consumers’ deal knowledge before, during, and after the store visit applying a between-subjects field-study design with 1204 respondents. In particular, the authors investigate perception of deal price status, typical deal price knowledge, and deal-spotting ability. Results show reasonably stable knowledge of typical deal prices, while knowledge of deal price status and deal-spotting ability improves significantly during grocery shopping. Surprisingly, consumers’ deal knowledge is not conditional on purchasing a special thus indicating that most consumers, consciously or unconsciously, scan for promotion signals when shopping groceries. In addition, the results suggest consumers are not easily fooled, as the vast majority is able to spot ‘good’ and ‘bad’ deals, while also possessing typical deal price knowledge. Furthermore, the findings suggest that consumers store internal reference deal prices. Retailers are therefore well advised to consider mixed depth and creative discount patterns to prevent ‘perfect’ perceptions of typical deal prices.     

Bayesian estimation of the output gap for a small open economy: The case of Canada

We introduce a novel approach for estimating output gaps for small open economies. Identification is based on a multivariate trend-cycle decomposition in which transitory exchange rate movements are linked to the output gap and inflation. The model is then applied to Canadian data.     

Model-based development and testing of advertising messages: a comparative study of two campaign proposals based on the MECCAS model and a conventional approach

Traditionally, the development of advertising messages has been based on ‘creative independence’, sometimes catalysed by inductively generated empirical data. Due to the recent intensified focus on advertising effectiveness, this state of affairs is beginning to change.

The purpose of the study described in this article is to compare the development and effects of two campaign proposals, with the common aim of increasing the consumption of apples among young Danes (18 to 35 years of age). One of the proposals is the result of an inductive-creative process, while the other is based on the MECCAS model, i.e. means—ends based data collection employing the laddering method and subsequent use of the guidelines for message development formulated in MECCAS. The project was a joint venture of the Association of Danish Fruit Growers, Odense, Denmark, and the MAPP Centre, and was financed by EU funds.

The comparison involved the efficiency of the managerial communication taking place in the message development process as well as target group communication effects. The managerial communication was studied by interviews with the involved advertising agency (Midtmarketing, Ikast, Denmark) and client staff. The target group communication was assessed by pre-testing the two campaign proposals (n = 500).

The main finding of the managerial study was that the implementation of the MECCAS guidelines for message development led to better agency-client communication, which resulted in a more common understanding of the objective of the campaign. The pre-test showed that the MECCAS-based message compared to the conventionally developed message was perceived as more focused by the target group and stimulated better central processing.     

VALUATION OF FLOATING RANGE NOTES IN LÉVY TERM-STRUCTURE MODELS

Turnbull (1995) as well as Navatte and Quittard-Pinon (1999) derived explicit pricing formulae for digital options and range notes in a one-factor Gaussian Heath–Jarrow–Morton (henceforth HJM) model. Nunes (2004) extended their results to a multifactor Gaussian HJM framework. In this paper, we generalize these results by providing explicit pricing solutions for digital options and range notes in the multivariate Lévy term-structure model of Eberlein and Raible (1999) , that is, an HJM-type model driven by a d -dimensional (possibly nonhomogeneous) Lévy process. As a byproduct, we obtain a pricing formula for floating range notes in the special case of a multifactor Gaussian HJM model that is simpler than the one provided by Nunes (2004) .     

The brand architecture of grocery retailers: Setting material and symbolic boundaries for consumer choice

This article discusses how the brand architecture of grocery retailers set material and symbolic boundaries for consumer choice, thus limiting consumer sovereignty. The article first discusses previous work on store atmospherics, servicescapes and brand architecture. It is argued that work based on these concepts has taken an internal management perspective on how retailers can manipulate aspects of the retail setting to serve their own interests. Then, we develop an alternative conceptualisation of retailer brand architecture that takes into account that consumers (and other constituents) are active co-constructors of material and symbolic aspects of retail settings. It is discussed how consumers participate in constructing retailer brand architecture and how this concept differs from previous research. Implications for both research and practice are discussed.     

An integrative conceptual framework for analyzing customer satisfaction with shopping trip experiences in grocery retailing

Grocery retailers aim to satisfy customers, and because grocery shopping trips are frequently recurring, they must do so continuously. Surprisingly, little research has addressed satisfaction with individual grocery shopping trips. This article therefore develops a conceptual framework for analyzing customer satisfaction with individual grocery shopping trip experiences within an overall ‘disconfirmation of expectations model’ of customer satisfaction. The contribution of the framework is twofold. First, by focusing on satisfaction with individual grocery shopping trips, previous research on satisfaction is extended to a context marked by frequently recurring, often tedious and routine activities. Understanding what causes satisfaction/dissatisfaction with individual shopping trips is required to explain overall, cumulative satisfaction with a retailer, which has been the focus of prior research on satisfaction in the retailing literature. Second, the framework synthesizes and integrates multiple central concepts from different research streams into a common framework for analyzing shopping trip satisfaction. Propositions are derived regarding the relationships among the different concepts in the framework and suggestions for future research are offered.     

Decomposing the German East–West wage gap

Wages in East Germany are persistently lower than in West Germany. We study the micro‐level determinants of this spatial wage gap, using an Oaxaca–Blinder decomposition and rich linked employer–employee data. In total, up to one half of the aggregate wage differential can be attributed to structural differences in worker, establishment and regional characteristics. Regional price and establishment size differentials alone account for one quarter of the wage gap at the median. Price level differentials are even more relevant towards the top of the wage distribution. Towards the bottom, differences in union coverage become more important. Our findings are quite stable over the period from 1996 to 2010.     

A Comparison of Option Prices Under Different Pricing Measures in a Stochastic Volatility Model with Correlation

This paper investigates option prices in an incomplete stochastic volatility model with correlation. In a general setting, we prove an ordering result which says that prices for European options with convex payoffs are decreasing in the market price of volatility risk.As an example, and as our main motivation, we investigate option pricing under the class of q-optimal pricing measures. The q-optimal pricing measure is related to the marginal utility indifference price of an agent with constant relative risk aversion. Using the ordering result, we prove comparison theorems between option prices under the minimal martingale, minimal entropy and variance-optimal pricing measures. If the Sharpe ratio is deterministic, the comparison collapses to the well known result that option prices computed under these three pricing measures are the same.As a concrete example, we specialize to a variant of the Hull-White or Heston model for which the Sharpe ratio is increasing in volatility. For this example we are able to deduce option prices are decreasing in the parameter q. Numerical solution of the pricing pde corroborates the theory and shows the magnitude of the differences in option price due to varying q.JEL Classification: D52, G13     

Do Target Groups Appreciate Being Targeted? An Exploration of Healthy Eating Policy Acceptance

The impact of healthy eating policies falls behind policy maker’s expectations. Better targeting and stakeholder support should improve their effectiveness. The research aims to identify whether a target group (the group impacted by the policy measure) is characterised by higher acceptance levels or not. Acceptance among citizens from the target was compared to a matching non-target group, based on data from an online survey on citizens’ support of healthy eating policies conducted among 3003 adult respondents from five European countries (Belgium, Denmark, Italy, Poland, UK). The policies explored were bans of advertising to children or school vending machines, school meal regulations, education campaigns at schools and workplaces, menu nutrition information and food labelling, price subsidies for healthy food, and accessibility measures for the elderly. It was found that target groups showed more support than others for four policies: parents were more supportive of vending machine bans in schools and workers eating out at lunch of education campaigns at workplaces, food labelling was more supported by those considering nutrition content in food purchase, and price subsidies for healthy food more supported by respondents in financial difficulties. However, parents were less supportive of school education campaigns, and the pattern of support through the target group differed by country. It is concluded that members of the target group tend to, but are not per se especially supportive of healthy eating policy measures concerning themselves or their children, and there are great country differences. Acceptance of policies should be surveyed per target group and country in advance of implementation. In the case of lack in acceptance, further exploration of the barriers should be conducted so that the benefit of the policy can be more effectively communicated, assuming that this increases stakeholder cooperation and favourable peer influence.     

Breaking With Neoliberalization by Restricting The Housing Market: Novel Urban Policies and the Case of Hamburg

Hamburg currently exemplifies the departure from a straightforward neoliberal urban track. The city's neoliberal path only moved into full swing in the first decade of the 2000s. During this period, urban development was primarily subject to property market mechanisms—with projects being granted to the highest bidder—prompting effects such as rapidly rising rents, deepened social segregation and increased property‐led displacement. Since 2009, however, the city's entrepreneurial urban policy encountered comprehensive resistance movements that eventually led to the rediscovery of a political will for a new housing policy and interventionist policy instruments. This article focuses on the turning point of neoliberal policies and examines the wider scope of the contemporary urban agenda in Hamburg. We first conceptualize potential limits of the neoliberal city in general and then discuss three momentous local policy experiments—the International Building Exhibition, promising ‘improvement without displacement'; the rediscovery of housing regulations through the ‘Social Preservation Statute'; and the ‘Alliance for Housing', aiming to tackle the housing shortage. We discuss these approaches as funding, regulation, and actor‐based approaches to limiting the neoliberal city.