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.     

Promoting healthy eating to children: a text message (SMS) feedback approach

The paper presents the design and results of a goal‐setting and feedback intervention aimed at increasing consumption of fruits and vegetables. The intervention involved 256 Danish adolescents (aged 12), and consisted of a nutrition education programme and an SMS‐based diary and feedback procedure that involved setting and modifying consumption goals. Effects were measured by comparing consumption goals and consumption data from the SMS diaries as well as from pre‐ and post‐intervention surveys. In addition to assessing the effects of the intervention on the consumption of fruits and vegetables, an objective of the study was to evaluate the intervention process in terms of attrition and goal accommodation behaviours. Based on the pre‐intervention survey, the sample was split into two groups consisting of pupils with low vs. high intake of fruits and vegetables. The diary and feedback design resulted in low attrition for both groups of pupils. Contrary to expectations, however, pupils with a high vs. low pre‐intervention intake were not less likely to reduce their intake goals during the intervention. For the pupils with low pre‐intervention intake, the intervention resulted in small but significant increases in consumption frequencies, whereas the partial effect of the SMS routines was only marginally positive. Unexpectedly, the pupils with a high pre‐intervention intake reduced their consumption of fruits and vegetables during the intervention.     

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.     

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.     

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     

On the valuation of compositions in Lévy term structure models

We derive explicit valuation formulae for an exotic path-dependent interest rate derivative, namely an option on the composition of LIBOR rates. The formulae are based on Fourier transform methods for option pricing. We consider two models for the evolution of interest rates: an HJM-type forward rate model and a LIBOR-type forward price model. Both models are driven by a time-inhomogeneous Lévy process.