Home About us Contact
|
Home About us Contact | ||
|
|
||
Price Discounts (price + discount)
Selected AbstractsRetailer's Response to Alternate Manufacturer's Incentives Under a Single-Period, Price-Dependent, Stochastic-Demand Framework,DECISION SCIENCES, Issue 4 2005F. J. Arcelus ABSTRACT This article considers the joint development of the optimal pricing and ordering policies of a profit-maximizing retailer, faced with (i) a manufacturer trade incentive in the form of a price discount for itself or a rebate directly to the end customer; (ii) a stochastic consumer demand dependent upon the magnitude of the selling price and of the trade incentive, that is contrasted with a riskless demand, which is the expected value of the stochastic demand; and (iii) a single-period newsvendor-type framework. Additional analysis includes the development of equal profit policies in either form of trade incentive, an assessment of the conditions under which a one-dollar discount is more profitable than a one-dollar rebate, and an evaluation of the impact upon the retailer-expected profits of changes in either incentive or in the degree of demand uncertainty. A numerical example highlights the main features of the model. The analytical and numerical results clearly show that, as compared to the results for the riskless demand, dealing with uncertainty through a stochastic demand leads to (i) (lower) higher retail prices if additive (multiplicative) error, (ii) lower (higher) pass throughs if additive (multiplicative) error, (iii) higher claw backs in both error structures wherever applicable, and (iv) higher rebates to achieve equivalent profits in both error structures. [source] Acceptance of a price discount: the role of the semantic relatedness between purchases and the comparative price formatJOURNAL OF BEHAVIORAL DECISION MAKING, Issue 3 2002Nicolao Bonini Abstract Two studies are reported where people are asked to accept or not a price reduction on a target product. In the high (low) relative saving version, the regular price of the target product is low (high). In both versions, the absolute value of the price reduction is the same as well as the total of regular prices of planned purchases. As first reported by Tversky and Kahneman (1981), findings show that the majority of people accept the price discount in the high-relative saving version whereas the minority do it in the low one. In Study 1, findings show that the previous preference reversal disappears when planned purchases are strongly related. Also, a previously unreported preference reversal is found. The majority of people accept the price discount when the products are weakly related whereas the minority accept when the products are strongly related. In Study 2, findings show that the classic preference reversal disappears as a function of the comparative price format. Also, another previously unreported preference reversal is found. When the offered price reduction relates to a low-priced product, people are more inclined to accept it with a control than a minimal comparative price format. Findings reported in Studies 1 and 2 are interpreted in terms of mental accounting shifts. Copyright © 2002 John Wiley & Sons, Ltd. [source] Competing with channel partners: Supply chain conflict when retailers introduce store brandsNAVAL RESEARCH LOGISTICS: AN INTERNATIONAL JOURNAL, Issue 5 2010Hans Sebastian Heese Abstract Private-label products are of increasing importance in many retail categories. While national-brand products are designed by the manufacturer and sold by the retailer, the positioning of store-brand products is under the complete control of the retailer. We consider a scenario where products differ on a performance quality dimension and we analyze how retailer,manufacturer interactions in product positioning are affected by the introduction of a private-label product. Specifically, we consider a national-brand manufacturer who determines the quality of its product as well the product's wholesale price charged to the retailer. Given the national-brand quality and wholesale price, the retailer then decides the quality level of its store brand and sets the retail prices for both products. We find that a manufacturer can derive substantial benefits from considering a retailer's store-brand introduction when determining the national brand's quality and wholesale price. If the retailer has a significant cost disadvantage in producing high-quality products, the manufacturer does not need to adjust the quality of the national-brand product, but he should offer a wholesale price discount to ensure its distribution through the retailer. If the retailer is competitive in providing products of high-quality, the manufacturer should reduce this wholesale price discount and increase the national-brand quality to mitigate competition. Interestingly, we find the retailer has incentive to announce a store-brand introduction to induce the manufacturer's consideration of these plans in determining the national-brand product quality and wholesale price. © 2010 Wiley Periodicals, Inc. Naval Research Logistics, 2010 [source] Do External Auditors Perform a Corporate Governance Role in Emerging Markets?JOURNAL OF ACCOUNTING RESEARCH, Issue 1 2005Evidence from East Asia ABSTRACT In emerging markets, the agency conflicts between controlling owners and the minority shareholders are difficult to mitigate through conventional corporate control mechanisms such as boards of directors and takeovers. We examine whether external independent auditors are employed as monitors or as bonding mechanisms, or both, to alleviate the agency problems. Using a broad sample from eight East Asian economies, we document that firms with agency problems embedded in the ownership structures are more likely to employ Big 5 auditors. This relation is evident among firms that raise equity capital frequently. Consistently, firms hiring Big 5 auditors receive smaller share price discounts associated with the agency conflicts. Also, we find that Big 5 auditors take into consideration their clients' agency problems when making audit fee and audit report decisions. Taken together, these results suggest that Big 5 auditors do have a corporate governance role in emerging markets. [source] Forecasting the Adoption of GM Oilseed Rape: Evidence from a Discrete Choice Experiment in GermanyJOURNAL OF AGRICULTURAL ECONOMICS, Issue 2 2008Gunnar Breustedt C42; C81; Q12; Q16 Abstract This paper explores farmers' willingness to adopt genetically modified (GM) oilseed rape prior to its commercial release and estimates the ,demand' for the new technology. The analysis is based upon choice experiments with 202 German arable farmers. A multinomial probit estimation reveals that GM attributes such as gross margin, expected liability from cross pollination, or flexibility in returning to conventional oilseed rape significantly affect the likelihood of adoption. Neighbouring farmers' attitudes towards GM cropping and a number of farmer and farm characteristics were also found to be significant determinants of prospective adoption. Demand simulations suggest that adoption rates are very sensitive to the profit difference between GM and non-GM rape varieties. A monopolistic seed price would substantially reduce demand for the new technology. A monopolistic seed supplier would reap between 45% and 80% of the GM rent, and the deadweight loss of the monopoly would range between 15% and 30% of that rent. The remaining rent for farmers may be too small to outweigh possible producer price discounts resulting from the costs of segregating GM and non-GM oilseed rape along the supply chain. [source] Empirical investigation of price setting and quantity surcharges in the German food sectorAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 3 2009Awudu Abdulai In this study, the authors examined the incidence and determinants of quantity price discounts and quantity price surcharges in the German food sector through a bivariate probit model, using recent consumer scanner survey data. Selectivity bias was corrected for in estimating the magnitude of quantity price surcharges and quantity price discounts, using Heckman's procedure. The findings reveal that almost 10% of the investigated products attract higher unit prices for larger package sizes, although the extent of price surcharges varied among product categories. Quantity price discounts were found to dominate in the firms' pricing strategies. The econometric results showed that the number of package sizes, the average package size, the packaging and storage forms, as well as the price image of a product are all significant determinants of the decision to impose both quantity price surcharges and quantity price discounts. [JEL classification: D40, L11] © 2009 Wiley Periodicals, Inc. [source] Factors influencing olive oil brand choice in Spain: an empirical analysis using scanner dataAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 1 2009Juan C. Gázquez-Abad Olive oil consumption is growing all around the world as a consequence of the extension of the Mediterranean diet. Because of limited production, pricing, promotions, and consumer-related variables are essential to explain olive oil consumer behavior. As a consequence of this increasing consumption, it is fundamental to analyze the main factors influencing consumers' olive oil choices for both brands and retailers to be able to compete more efficiently and satisfy consumer needs more closely. But, few such studies are concerned with olive oil (although a great many works in the literature analyze the influence of these factors in other product categories). In a sociocultural context like the Spanish market, in which brand awareness is strong and the use of the product is very high, these factors are even more important. Thus, the main objective of this article is to determine and assess how different marketing variables, such as price, price discounts, use of store flyers and loyalty, explain olive oil brand choice. [Econlit citations: M310, Q130]. © 2009 wiley Periodicals, Inc. [source] Effectiveness of price discounts and premium promotionsPSYCHOLOGY & MARKETING, Issue 12 2009Mariola Palazon Although price discounts are by far the most common form of sales promotions employed by firms, the increasing use of premiums as a promotional strategy may imply that they are occupying a more important place in the promotional strategy. Since price discounts are quite costly and can reduce consumers' reference prices, undermine perception of quality, and hurt brand equity, it is crucial to know what type of promotion is the most preferred and valued by consumers. As the most recent works in the field have argued that the promotional benefit level is an important determinant of promotional effectiveness, this research reports the results of two experimental studies that investigated the interaction effect between promotional benefit level and promotion type across three levels of benefit (low, moderate, high). The results obtained suggest that at high benefit levels price discounts are more effective than premiums, while the opposite occurs at low levels. However, a similar evaluation of promotional tools was found at moderate benefit levels. The findings offer guidance to managers who might benefit from knowing what is the best strategy to promote their products and services. Our work also extends prior related research because, to this date, the effectiveness of price discounts and premiums across promotional benefit levels is an under-researched issue. © 2009 Wiley Periodicals, Inc. [source] | ||||||||||