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As marketers love to teach students, differentiation must be the focal point of marketing strategy. But what happens when a firm's competitive set is shared by similar customers, perceived differentiation is weak among rivals, and loyalty is a thing of the past? This was the dilemma the French luxury jeweler Mauboussin faced: how to leverage its iconic brand to access new customers, domestically and abroad, and through new channels, while preserving the image of luxury goods founded on the myth of rarity and exclusivity? The case was designed and used for the latter portion of an international MBA marketing course and would work well in most international business courses.

Going beyond odd and even prices, this paper aims to explore the rationale behind the widespread practice of setting prices ending in “50” or “80” in the luxury industry. The authors argue that when they set such prices, managers agree to reduce their profit margin to limit the anticipated guilt luxury consumers associate with luxury shopping while also protecting their brand luxury. The authors label these prices compromise prices and formally define compromise pricing as the practice of choosing a price’s ending so that the price falls below (but not just below) a round number to boost sales without damaging brand luxury.

Following the observation of the overrepresentation of prices ending in “50” and “80” in the luxury clothing category, an experiment explores the impact of compromise prices on anticipated guilt and brand luxury in the luxury watch category. Then, to identify when luxury pricing managers typically favor compromise prices, multinomial regressions investigate prices collected on two online luxury fashion retailers for the luxury clothing and handbag categories.

Compromise prices reduce the anticipated guilt luxury consumers associate with luxury shopping compared with even prices while enhancing brand luxury compared with odd prices and interestingly, with even prices also. This finding gives rationale to luxury managers’ preference for compromise prices in the ninth hundred (i.e. €X950, €X980), especially for higher-priced products, i.e. when the potential for price underestimation and/or the risk of damaging brand luxury are more important.

This research contributes to the field of luxury pricing by providing evidence to an original price-ending practice, coined compromise pricing, which consists in agreeing to a slight reduction in prices and unit margin to protect brand luxury.

Eliminating overpackaging is a central question in sustainable development, and poses a dilemma for retailers. Since packaging is a differentiation tool for private labels, eliminating it could limit the capacity to give those labels an equivalent image to national brands just as much as it could be a sustainable development opportunity and a positioning instrument. Drawing on the attribution theory framework, the purpose of this paper is to examine how eliminating overpackaging influences consumers’ perception of products sold under generic and mimic private labels, and their purchase intention.

This research uses a 2 (overpackaging: present vs absent)×2 (brand concept: generic vs mimic private label) between-subjects experiment on a convenience sample of 217 French consumers. The conceptual framework was tested using ANCOVA and mediation analyses.

The experiment shows that eliminating overpackaging does have an influence on mimic private labels’ image, particularly on perceived quality, convenience and environmental friendliness. The authors also find that this influence negatively transfers to purchase intention for mimic private labels through lower perceived quality and convenience. No such effect appears for generic private labels’ image.

This study addresses an issue as yet unexplored in marketing – the effect of overpackaging on private label products – and proposes areas for managerial and societal reflection relevant to retail chains interested in eliminating overpackaging.

Using a classification of benefits and costs of promotional offers along three routes – economic, informational and affective – this paper aims at evaluating, from the consumer's point of view, the relative perceptual disadvantages of separate‐item bundles compared to pre‐wrapped bundles.

The marketing literature and a qualitative study based on 18 consumers permits the identification of the relative perceived costs and benefits associated with separate‐item bundles and for hypotheses to be derived. An experiment on a sample of 120 adult consumers was then set up to test these hypotheses.

The findings suggest that consumers associate separate‐item bundles with higher economic benefit but also with higher inspection costs. From a more global perspective, there is no loss of interest in separate‐item bundles compared to pre‐wrapped bundles.

Focusing the research on separate‐item bundles clarifies the way consumers evaluate promotions. Its qualitative phase gives support to the relevance of an “informational route”, beyond the traditional utilitarian and hedonic routes. Its quantitative phase confirms the importance of cognitive biases in consumers' perceptions of promotions.

The numerous advantages of separate‐item bundles for manufacturers and retailers and their attraction to consumers should lead to an increasingly intensive use in promotional campaigns. Besides, the quality of in‐store communication is the most important factor of the success of separate‐item bundles, which provides the opportunity to propose meaningful recommendations for practitioners.

If the strengths and weaknesses of separate‐item bundles have already been studied from a managerial point of view, to the authors' knowledge, no research has focused on separate‐item bundle efficiency from the consumer's point of view.

Cause-related marketing – linking product sales with donations to a cause – are popular with consumers because they produce warm-glow feelings (the positive route). But when they involve large donations, they may trigger consumer scepticism, reducing the warm glow (the negative route). Drawing on the elaboration likelihood model, the purpose of this paper is to examine whether large donations in cause-related marketing can produce consumer scepticism and reduce the warm-glow effect and positive attitude towards the retailer.

An experiment varying the donation size (large, medium, small) in a cause-related marketing offer run by an office equipment retailer is set up. Hypotheses are tested using bootstrapping regression analyses.

The negative route has the greater effect: scepticism towards the offer mediates the relationship between donation size and the warm glow. Furthermore, scepticism towards a large donation is higher (lower) for respondents scoring low (high) on altruism and high (low) on familiarity with cause-related marketing.

When using cause-related marketing, retailers should choose their features and target audience carefully in order to reduce scepticism, e.g., small donations should be offered in promotions targeting consumers who are familiar with cause-related marketing and show low altruism.

This study contributes to the recent research examining the negative effects of cause-related marketing by explicitly conceptualising and measuring scepticism towards cause-related marketing. The findings are also valuable because they indicate the importance of a shift in focus, away from the conventional question of cause-related marketing effectiveness to the more specific and under-investigated problem of the appropriate core target consumers.

Using Keller's brand equity framework, the purpose of this paper is to investigate the impact of the firm's environmental communication on brand equity, and specifically its impact on brand image, through the strength and favourability of brand environmental associations.

A between‐subjects experimental design tests the hypotheses with a generalisable sample of 165 French consumers.

Environmental communication positively influences the strength and favourability of brand environmental associations, therefore improving brand equity. Two moderators reinforce the impact of environmental communication on brand equity through the strength of brand environmental associations: the perceived congruence between the brand and the cause, and the perceived credibility of the claim.

In the context of greater consumer pressure regarding business ethics, managers should favour environmental arguments in their corporate communication to improve brand image through societal associations. Doing so, they should focus their communication on causes that are congruent with their brands to facilitate brand equity building, and ensure they are credible when proclaiming these arguments.

Despite existing research on corporate social responsibility (CSR), no studies focus on the specific impact of CSR communication on brand equity. The paper provides initial empirical evidence about the positive effect of environmental claims on customer‐based brand equity.

To encourage sustainable consumer practices, public policy makers introduce new ecological measures, including mandatory programmes that require companies to provide environmental information about their products, even if the information is not flattering. Few academic studies consider the potential impacts of such mandatory eco-labels on consumer behaviour; the purpose of this paper is to seek to identify conditions in which a generalized eco-label in stores might modify consumers’ purchase choices.

Two quasi-experimental studies (n=333, 126) manipulate environmental information with a simple, traffic light – shaped eco-label. The measures focus on respondents’ choice or purchasing intentions, perceptions of the environmental harmfulness of each product, and individual characteristics (i.e. environmental concern, price sensitivity, familiarity with environmental information about the product category).

The presence of an eco-label influences consumers’ beliefs about products’ environmental harm and thus choice. The effect of perceived harmfulness on choice is moderated by environmental concern and price sensitivity, though combined effects arise for only one of the two product categories tested (dish soap, not yoghurt). With a third product category (paper towels), Study 2 confirms the influence of familiarity with environmental information.

Familiarity with environmental information accounts for some differences across product categories, but other factors also come into play. These results must be interpreted carefully due to the use of a fictive eco-label.

This paper examines the potential effects of a generalized, mandatory programme. It also addresses the lack of consistent label effectiveness across product categories, with a possible explanation based on perceived familiarity with environmental information.

The study develops a decision support system for the spatial distribution of store flyers, identifying a number of factors related to the demand and the competition influencing the complexities of their allocation to the target population.

The model was developed incorporating the insights found in existing marketing literature and bypassing the limitations of the managerial practices. To this end, an in-depth discussion with a panel of retailers was held. The model was tested in collaboration with a retail chain.

The proposed system is flexible and provides an almost endless array of solutions in accordance with the retailer's strategic approach to the market. It captures the key trade-offs that need to be made during the decision-making process of a retailer with limited marketing resources.

The traditional managerial approach, based on a set of operational steps, is overtaken by a model that systematically considers the interrelationships between the decision-making factors involved.

This is the first attempt to analyse spatial distribution of store flyers, a topic that has yet to be explored in retail marketing research. The paper conceptualises the key variables which affect the optimisation problem and reviews the different streams of extant research to obtain the appropriate insights.

The study aims to investigate the impact of store flyer characteristics on store performance for different formats (hypermarket and supermarket) and customer segments (additional and regular shoppers). Specifically, the paper tests propositions on how flyer duration, variety of featured purchasing options, the category and brand mix on feature and the method used to communicate the deal price affect store traffic and sales.

Data were made available for analysis by a grocery chain that utilizes a hi-lo pricing strategy. To test the hypothesis a multiple linear regression analysis was used.

Results indicate that optimal store flyer configuration is related to the store format. Moreover, the response to flyer promotion programs varies across customer segments in relation to their degree of store loyalty.

Findings can assist marketers to develop more effective promotional strategies with regards to the bundle of promotions to be offered and the way they should be communicated. Future research should extend the analysis to other retailers and trading areas. Furthermore, it would be useful to replicate the analysis by separating the impact of in-store activities and store flyer effects.

This is the first attempt to analyse flyer impact on store performance for different formats and customer segments. Prior research is confined to supermarkets, although the enhancement of store traffic is related to format size. Moreover, the traffic and sales implications of store flyer composition have so far been analysed in an aggregate manner, disregarding customers' shopping patterns.