Why do many consumers prefer to pay now when they could pay later?

Payment timing is conceptualized as a payment characteristic useful in explaining motivations to prefer payment types. Cash, debit cards, and online banking represent consumers' preferences to pay now, while credit cards and loans represent the inclination to pay later. Based on a grounded theory study, a payment-timing model is developed to theorize consumers' choices of payment types with differences in payment timing. The model presents four motivations for payment-timing preferences: (1) the extent of rewards salience, (2) the perception of financial stress, (3) adopting heuristics for money management, and (4) the influence of perceived financial ability. Consumers choose payment-timing options that best suit their financial strategy to manage payments in pursuit of their consumption objectives.     

Consumer decision‐making styles and post purchase behaviour of poor for Fast Moving Consumer Goods

More than half of the world's population is poor. Certainly, their purchasing power cannot be compared with that of the riches, but it is their collective purchase potential which makes them a substantial market. The fast moving consumer goods (FMCGs), on the other hand, are the fourth largest industry in the world. FMCGs are relatively low cost products and the poor, by necessity, spend a significant amount of their income on FMCGs. So, by virtue of being a large consumer base for FMCGs, the poor are a promising market for the FMCG marketers. But little is known about their buying behaviour for FMCGs as only a few studies have been conducted on them in this regard. This study aims to explore their shopping orientations towards price, quality and brand for FMCGs in the context of one of the largest developing countries like India by exploring their consumer decision‐making styles (CDMSs), especially their price consciousness, quality consciousness, brand consciousness and brand loyalty. Besides it, it also explores their post purchase behaviour and testifies its mechanism with the above mentioned CDMSs in the present context through structured equation modelling.     

Notes

Editor's Note: Starting with this issue, the Journal will include a new section to accommodate a growing prevalance of shorter articles with single-issue orientation.     

Some Surprising Facts About the Concentration of Trade Across Commodities and Trading Partners

The present paper documents unexplained concentration in trade. Bernard et al. (Producer Dynamics: New Evidence from Micro Data, 2009, University of Chicago Press) have documented concentration at the level of the firm and in exports. Taking a step forward, we document trade volume concentration at the level of nations and in both exports and imports. Firm level concentration has been relatively easy to explain in terms of models of heterogeneous‐firm models with entry costs in both the domestic and foreign markets. But as we shall see, the concentration at the level of the nation, especially in imports if not exports, turns out to be far more difficult to explain.     

From Fatwallet to eBay: An investigation of online deal-forums and sales promotions

Sales promotions are an important part of retail advertising strategy. Traditionally, research on sales promotions has generally assumed that the buyers are end consumers who do not engage in reselling, in large part due to high transaction costs. However, the recent Internet related technologies have dramatically lowered the cost of transferring goods between consumers, leading to relative ease of reselling activity amongst individual consumers. Little is known about the impact of this phenomenon on retailer's sales promotion strategy. In this research we investigate the reselling activity in online auctions for products that active deal seekers can obtain at deeply discounted prices from retailers. We further investigate the role of deal-forums in the resale process. Data is collected from an online deal-forum (http://www.fatwallet.com/) and eBay to test various reselling-related hypotheses. The results show that there is a significant abnormal increase in the number of newly posted auctions of a product after the deal information of this product is posted on deal-forum website. We also find that there is a significant price incentive for individuals to resell. The implications for sales promotion research and practice are discussed.     

Agricultural Liberalisation and the Least Developed Countries: Six Fallacies

Today, agriculture remains the most distorted sector of the world economy. Therefore, agricultural liberalisation in the Doha negotiations is rightly the top priority. But the public‐policy discourse on the subject remains fogged by a number of fallacies. These fallacies probably originated with the leadership of the World Bank but have now been embraced by the IMF, OECD, Oxfam and the leading academic critics of globalisation. The paper identifies six fallacies and offers evidence and analysis to debunk them: (1) Agricultural border protection and subsidies are largely a developed‐country phenomenon. (2) Developed‐country agricultural subsidies and protection hurt the poorest developing countries most. (3) Developed‐country subsidies and protection hurt the poor, rural households in the poorest countries. (4) Developed‐country agricultural protection and subsidies constitute the principal barrier to the development of the poorest developing countries. (5) Agricultural protection reflects double standard and hypocrisy on the part of the developed countries. (6) What the donor countries give with one hand (aid), they take away with the other (farm subsidies).     

Innovations in Retail Business Models

A retail business model articulates how a retailer creates value for its customers and appropriates value from the markets. Innovations in business models are increasingly critical for building sustainable advantage in a marketplace defined by unrelenting change, escalating customer expectations, and intense competition. Drawing from extant strategy and retailing research, we propose that innovations in retail business models are best viewed as changes in three design components: (1) the way in which the activities are organized, (2) the type of activities that are executed, and (3) the level of participation of the actors engaged in performing those activities. We propose six major ways in which retailers could innovate their business models to enhance value creation and appropriation beyond the levels afforded by traditional approaches to retailing. We also describe the drivers of business model innovations, the potential consequences of such innovations, and numerous examples from retail practice that highlight our concepts and arguments. In doing so, we provide a starting point for academic research in a domain that is deficient in theoretical and empirical research, and offer retailing managers a framework to guide retail business model innovations for sustainable competitive advantage.