This study attempts to lend empirical evidence to the relevance of the arbitrate pricing theory in providing economic interpretation to stock market factors. A multistage model to explain the stock returns of a representative set of U.S. companies is developed. Monthly returns data for individual securities are obtained and the cross-sectional interdependencies between securities are identified. The returns of the securities are found to be related to at least three, and possibly four, factors. The hypotheses related these factors to broad economic aggregates such as cost and be supply of money, in addition to the market return index. The presence of idiosyncratic industry effect in the market is also demonstrated. The replication of the analysis with another sample from a different time period yields similar results. Marketing implications are drawn based on the findings of this study.

This article shows that in a model of exogenously given sales expansion target with a dominant manufacturer, the relative profitability of coupon and price-reduction schemes depends on the values of coupon redemption rates and the equivalence ratio of price reduction to coupon face value. It is also shown that retailer’s margin has an uncertain impact on the compensation constraint on the manufacturer’s choice between the two schemes. However, higher retailer’s margin increases the likelihood that the chosen sales expansion scheme (SES) is the one that generates higher consumer welfare. A sales response model is used to estimate the equivalence ratio and critical coupon redemption rate below which the manufacturer will prefer a coupon promotion. A sensitivity analysis of the manufacturer’s decision reveals that changes in the magnitude of the retailer’s margin have little impact on the manufacturer’s choice between alternative SESs.

Retail stores are segmented using socio-economic characteristics of the trade area and it is shown that the effects of store environment on store performance vary across segments. Store performance is measured by a market-based measure – sales and a productivity-based measure – sales per square feet. The internal store environment includes the number of checkout counters per square foot of selling area, the number of non-grocery products sold (extent of scrambled merchandising), whether the store at least doubles manufacturers’ coupons, whether there is a banking facility and whether the store is open for twenty-four hours. The external store environment includes the type of neighborhood it is located in. A methodology for predicting store performance (for existing and new stores) based on the type of environment and store location using aggregate secondary data is demonstrated. The proposed models are estimated and validated using Market Metrics geodemographic data for 646 grocery stores provided by A.C. Nielsen. It is shown how the findings of this retail environment study can be used to offer guidelines to retailers for attaining desired levels of sales and sales per square feet using readily available data.

This research hypothesizes and tests the following propositions: (1) competitive performance of a brand varies across retails chains, driven by differences in retailers' promotion decisions for the brand, and (2) type, timing, frequency, and magnitude of retail promotions affects brands' competitive performance. Further, we illustrate the presence of asymmetry in brand competition and test the expectation that differences in market shares and price levels are major factors contributing to competitive asymmetry. A model of brand competition is formulated at the retail level. The results indicate that the competitive performances of brands are not uniform across pairs of brands and the retails chains in a market.