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【速度】
【计时一】
Holiday Discounts Are a Dangerous Drug
by Marco Bertini
A retail battle is underway. Just walk to the nearest shopping center as early as Thanksgiving night, and you will find people shoving their way across overcrowded aisles for the best deals, and retailers fighting tooth and nail for every dollar in customers' wallets.
Cynicism aside, there is no doubt that the six-week stretch between late November and early January is critical to the survival of many retail businesses. According to one study, for example, 30% of a merchant's yearly revenue is generated during this period. Add to this the conviction that people will spend (if properly motivated) and you have the perfect recipe for a pricing disaster: all-out competition for the earliest, deepest, and most enduring discount.
But a poorly executed promotional campaign can ruin a brand and a business just as easily as it can boost sales. And the holiday season exaggerates this threat because discounting has always been the retailer's weapon of choice.
To understand the problem with discounting, think of a price cut as a potent drug. The initial effect of a price cut on sales is clear, immediate, and intoxicatingly strong. But just as the company grows dependent on these concessions to meet its objectives, the market grows habituated and responds with less enthusiasm, fueling a downward spiral of deeper and more frequent price cuts.
Is there a healthier way to entice consumers? Most managers I know take a shortsighted view of what a discount is and what it can do for a business. There is a simple reason for this: managers don't spend enough time thinking about the phenomenon. To them, discounting is a dull tactical issue with a mechanical solution that can and should be routinized.
Thus, it is not surprising that the output is a dumb promotion with no ambition other than making sure the sale takes place. To turn things around and improve the return on your marketing spend; consider what a smart promotion should look like.
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【计时二】
Here are seven characteristics of a smart promotion:
It is a conversation starter. A price cut is much more than an incentive. It is the perfect vehicle to grab the consumer's attention and start a discussion on anything but price: the merits of a new product feature or service, the reputation and values of your organization, etc.
It is selective. Companies are generally hesitant to turn customers away. In many instances, the discount is offered indiscriminately to anyone willing to purchase. By doing so, however, we miss a great opportunity to separate the customers we want from those we do not, which in turn strengthens our positioning and focus vis-à-vis the competition.
It is contingent. Don't give money away too easily. Make consumers sweat for it by asking them to perform some ancillary behavior that reduces your costs (e.g., buy online, not in the store), increases your revenue (e.g., buy two units, not just one), or ideally does a bit of both.
It enhances the brand. The standard assumption is that discounts destroy a brand. But this is only the case if the consumer sees the price cut as an attempt at persuasion rather than a reward. Think of all the behaviors that capture the essence of your brand (and your ideal customer) and offer discounts to consumers willing to excel on those dimensions. Essentially, prove that you are willing to put your money (the discount) where you mouth (the brand) is.
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【剩余部分】
It is exclusive. One problem with discounting is that an intervention is easily copied. To gain exclusivity, consider branding the promotion itself. To the extent that you can infuse a tangible benefit — in this case, saving money — with the intangible values of your customers, you have created differentiation also at the campaign level.
It is robust. Every promotion needs a baseline level of sales you can trust. Without it, there is no benchmark, no reference point to judge performance. What steps have you taken to ensure that your baseline is valid?
It is disciplined. The problem with drugs is that they cloud your judgment, making it impossible to exercise logic and reason. The same applies for promotions. One solution is to draw up an exit plan and commit to it before the first price reduction is made. Decide what you want to achieve with the campaign and stop when you have arrived. Decide what signs from the market would force an immediate withdraw and stick to them. The point is to establish a plan of attack while you are still responsible for your own actions.
There is nothing inherently wrong with discounting, if done right. Consumers will always be attracted to the idea of saving money. The problem is that many businesses are spending too little time thinking strategically about promotions — presuming that giving money away has to work. This is a pity, because a carefully crafted strategy can do so much for a business. For starters, it can keep retailers out of trouble this holiday season.
【字数257】
【计时三】
Micro stars, macro effects
Meet the economists who are making markets work better
[attachimg=595,335]110700[/attachimg]
ON THE face of it, economics has had a dreadful decade: it offered no prediction of the subprime or euro crises, and only bitter arguments over how to solve them. But alongside these failures, a small group of the world’s top microeconomists are quietly revolutionising the discipline. Working for big technology firms such as Google, Microsoft and eBay, they are changing the way business decisions are made and markets work.
Take, for example, the challenge of keeping costs down. An important input for a company like Yahoo! is internet bandwidth, which is bought at group level and distributed via an internal market. Demand for bandwidth is quite lumpy, with peaks and troughs at different times of the day. This creates a problem: because spikes in demand must be met, firms run with costly spare capacity much of the time.
This was one of the first questions that Preston McAfee, a former California Institute of Technology professor, looked at when he arrived at Yahoo! in 2007. Mr McAfee, who now works for Google, found that uses of bandwidth fall into two categories: urgent (displaying a web page) and delayable (backups and archiving). He showed how a two-part tariff (high prices when demand peaks, low ones otherwise) could shift less time-sensitive tasks to night-time, allowing Yahoo! to use costly bandwidth more efficiently.
The solution—two types of task, two prices—has intuitive appeal. But economists’ ideas on how to design markets can seem puzzling at first. One example is the question of how much detail an online car auctioneer should reveal about the condition of the vehicles on offer. Common sense would suggest some information—a car’s age and mileage—is essential, but that total transparency about other things (precise details on subpar paintwork) might deter buyers, lowering the auctioneer’s commissions. Academic theory suggests otherwise: in some types of auction more information always raises revenues.
【字数326】
【计时四】
To test the idea, Steve Tadelis of the University of California at Berkeley (now also working for eBay) and Florian Zettelmeyer of Northwestern University set up a trial, randomly splitting 8,000 cars into two groups. The first group were auctioned with standard information, including age and mileage. The second had a detailed report on the car’s paintwork. The results were striking: cars in the second group had better chances of a sale and sold for higher prices. This effect was most pronounced for cars in poorer condition: the probability of a sale rose by 23%, with prices up by 5%. The extra information meant that buyers were able to spot the type of car they wanted. Competition for cars rose, even the scruffier ones.
But more information is not always better. Studies show that shoppers overwhelmed by choice may simply walk away. Mr Tadelis tested whether it would be better to tailor eBay’s auctions to users’ experience level. The options for new users were narrowed, by removing sellers who are more difficult to assess (for example those who had less-than-perfect feedback on things like shipping times). When new users had a simpler list of sellers to choose from, the number of successful auctions rose and buyers were more likely to use eBay again. Tailoring the market meant gains for buyers, sellers and eBay.
【字数233】
【剩余部分】
The desire to use theory to challenge conventional thinking is one reason economists are valuable to firms, says Susan Athey, of Stanford University and Microsoft. When Ms Athey arrived at the software giant in 2007 it faced what was seen as an unavoidable trade-off: online advertising was good for revenues, but too much would deter users. If advertisers gained, users would lose. But economic theory challenges this, showing that if firms are dealing with two groups (advertisers and users, say), making one better off often benefits the other too.
Ms Athey and Microsoft’s computer scientists put that theory to work. One idea was to toughen the algorithm that determines whether an ad is shown. This means ads are displayed fewer times, so advertisers lose out in the short-term. But in the longer run, other forces come into play. More relevant ads improve the user experience, so user numbers rise. And better-targeted ads mean more users click on the advert, even if it is shown less often. Empirical evidence showed that although advertisers would respond only after some time, the eventual gain was worth the wait. Microsoft made the change.
[attachimg=290,299]110702[/attachimg]
Microeconomists have their sights on problems outside their home turf too. At the moment the policies picked by central banks and finance ministries are based on old news, since things like GDP, inflation and unemployment are measured with long lags. A team at Google headed by its chief economist, Hal Varian, is using search-engine data to provide more timely measures. Search terms like “job”, “benefits” and “solitaire” are closely correlated with unemployment claims (see chart). These types of relationship help construct new indexes that offer a real-time picture of the economy. If policymakers start to use these in a systematic way, their decisions could be based on how the economy looked yesterday, rather than months ago.
【字数305】
【计时五】
Why Chinese Firms' Cross-Border Deals Fall Apart
by Laurence Capron and Will Mitchell
[attachimg=580,215]110701[/attachimg]
During the past decade, Chinese firms have become aggressive cross-border acquirers. Unfortunately they have been struggling to actually close their deals.
Some deals have failed because of national security concerns in the U.S., including CNOOC's attempt to purchase Unocal in 2005 and Huawei's attempt to buy 3Leaf Systems in 2011.
More often, though, Chinese firms have announced deals and are then unable to follow through. For instance, Bright Food was near closing on a deal to purchase GNC for between $2.5 billion and $3.0 billion in 2011, but then had to retract because the companies could not agree on terms and struggled to get Chinese regulatory approval.
These examples are rather more typical than they should be. According to a study (forthcoming) by Olga Hawn of Duke University, cross border deals involving Chinese companies are almost twice as likely to break down (15% of the time) as deals involving companies from other BRICS countries (8%) and three times as likely as those involving Western multinationals (5%).
There are many explanations for this. Chinese companies are relatively new to the M&A game, governments in many target markets are quick to detect a political agenda, Chinese companies sometimes struggle to obtain financing or face unexpected political opposition at home, and many acquiring Chinese firms operate in particularly dynamic — and volatile — global markets.
These are all perfectly good reasons. And walking away from bad deal is a good thing. That's precisely why seasoned acquirers like Cisco, GE, Siemens, and Johnson & Johnson have strong processes to enforce discipline throughout their acquisition process and can kill as many potential deals as they make.
【字数282】
【剩余部分】
But as these companies also know walking a way from a deal is best done before the deal is announced. Cancelling an announced deal causes substantial losses not only for the acquirer but for the target as well. Failed deals impose significant out-of-pocket costs (financial advisory fees and due diligence expenses) and take up a lot of management time and energy, distracting many senior managers from important line responsibilities. If companies are incurring these costs unnecessarily they are destroying value.
More importantly, though, the difficulty Chinese firms seem to have in completing deals will over time damage their ability to expand and adapt. Companies will become even more wary of their Chinese suitors than they already are if they have to worry about being left at the altar and this may foreclose many opportunities for Chinese companies.
So although many Chinese acquirers are becoming more adventurous in their deal-making deals, they need to reduce the cancellation rate of their announced acquisitions. To do so, they must:
1. Make sure that acquisitions are aligned with strategy. Companies jump to an acquisition out of fear of missing an expansion opportunity. This is a recipe for failure and acquirers need to make sure that their M&A strategy is aligned with a well thought-through broader strategic plan. Obviously, this requires that you have a robust strategic planning process to begin with, which is not always the case in China.
2. Assess the political attitude in the target country. Governments in most countries will review major foreign investments. As noted, several high profile deals involving Chinese firms, such as CNOOC's 2005 attempt to purchase Unocal in the U.S., have been blocked, either formally or by delaying the negotiations to the point that the buyers withdraw. Before going too far with your acquisition process, Chinese acquirers need to assess how the target's local government is likely to react.
3. Make sure there is no opposition at home. Although some deals may be blocked in the target countries, others fail because of opposition at home. Tengzhong's 2010 attempt to buy Hummer from General Motors, for instance, fell apart because of opposition from the Ministry of Commerce in China. Before embarking on deals that are likely to be controversial inside China, Chinese acquirers should first make sure there is a clear path for approval.
4. Consider sequential engagement. When there is high uncertainty about the value of the combination or how you will be able to work with your foreign target, you may want to start out with a more focused partnership. You can start with a specialized alliance or undertake an initial equity stake and gradually deepen your relationship.
Bottom line, we suspect that too many Chinese companies are opportunistic dealmakers. They need become more sophisticated in their M&A processes and should explore more carefully less headline-grabbing ways of acquiring new resources and capabilities, along the lines we set out in our book, Build, Borrow, or Buy. If they do so, their cancellation rates will fall and they will be seen as more reliable M&A counterparties, which will open up more opportunities for them.
【字数517】
【越障】
Durable Goods, Inflation Risk and the Equilibrium Asset Prices
Bjørn Eraker, Ivan Shaliastovich and Wenyu Wang
Empirically, the consumption and output of durable goods is more sensitive to economic fluctuations than of non-durable goods. It is intuitive that consumers would hold off on the purchase of a durable good, such as a car, in response to an adverse economic shock, rather than non-durable goods such as food. In structural economic models, the level and the difference in the exposures of durables and nondurables growth to aggregate shocks have important implications for the equilibrium valuations of financial assets, as shown, for example, in Yogo (2006) and Yang (2010) in the context of real two-good consumption-based economies. In this paper, we focus on the inflation-premium channel which arises from a long-run negative impact of inflation on real durable cash-flows, and show that it plays a significant role to account
for the unconditional levels and the conditional dynamics of the nominal bond and equity prices of the durable and nondurable good producing firms.
There are several empirical observations that lead us to believe that durable growth and its interplay with inflation is important in explaining the asset markets:
* Shocks to durable consumption growth are significantly more persistent that shocks to non-durable consumption growth.
* Long-term durable growth is more sensitive to shocks in inflation than nondurable. In particular, we show that higher inflation has a more adverse impact on future consumption of durables and on future cash-flows of durable-producing firms, relative to consumption of non-durable goods and cash-flows in non-durable producing sectors.
* Movements in the nominal yield curve predict future real consumption growth of durable goods. The predictability is stronger for durables than for non-durables.
The first point, which is consistent with the evidence in Yogo (2006) and Yang (2010), suggests that fluctuations in durable goods constitute an important risk factor for an investor, in addition to non-durables, due to their longer-lasting impact on the economy. The second point implies that inflation is a bad news for long-run durable growth, which gives rise to a significant inflation risk premium component that impacts the valuation of financial assets. Finally, our last observation suggests that the asset markets contain separate information about durable and nondurable growth.
These findings motivate the specification of our economic model which explicitly introduces durable and nondurable consumption and a non-neutral effect of inflation on real durable and nondurable growth.
Specifically, our model is based on a nominal two-good extension of the long-run risks specification of Bansal and Yaron (2004). The key ingredients of our model are recursive utility with a non-separability between durable and nondurable goods in the preferences, persistent fluctuations in expected growth rates, and non-neutrality of inflation for future consumption. In the benchmark model, investors are concerned about the fluctuations in expected non-durable consumption, expected durable consumption, and expected inflation. Specifically, the negative shocks in expected consumption of durables and nondurables and positive shocks in expected inflation represent bad states for the investor, so the market prices of expected growth risks are positive and the market price of expected inflation is negative.
As in a standard one-good model, equilibrium prices of risk-free assets hedge fluctuations in expected consumption of nondurables, which contributes negatively to the term premium and the slope of the real term structure. However, when the two goods are relatively hard to substitute, a risk-free claim to nondurable consumption becomes more valuable when expected durable growth is high. The risk-free bond is now risky with respect to the fluctuations in expected durable growth, which contributes positively to the term premium and the slope of the real term structure. We show that when the durable channel is strong enough, the implied real term structure can be upward sloping. In addition to these real channels, the equilibrium prices of nominal bonds are further affected by the interaction of expected inflation with real growth. Nominal bond prices fall and nominal yields rise at times of high expected inflation, which are bad states of the economy as they signal low growth of future durable and nondurables consumption. This leads to a positive inflation premium on nominal bonds, a significant amount of which, we show, arises through the durable channel. Finally, we provide a parsimonious model of the equity dividend claims in durable and nondurable producing sectors as a levered consumption on durables and nondurables respectively. We show that as durable consumption is more persistent and more sensitive to inflation, this makes equity returns for durable firms to be more exposed to risks in expected durable and expected inflation. In the model, durables are riskier than nondurables, and further, they react more to shocks in inflation and correlate more with returns on bonds relative to nondurable equities.
We estimate the model to further validate its economic channels and disentangle the contribution of its economic inputs. Our model of the macro-economy can be seen as a VAR(1) model of the three expected growth components. We estimate this model using Bayesian methods for sampling on the posterior of the parameter space. Our benchmark estimation is a two-stage estimation of the model. In the first stage, we estimate the model parameters and extract the latent states that govern the dynamics of macro variables using only the time series of observable macro variables. In the second step, we estimate the preference parameters using nominal bond yield data and calibrate the dividend leverage parameters for the equities. Thus, the estimation of macro dynamics is independent of the equilibrium model specification and based only on the observed macro data. Hence, the implications for the term structure can be viewed as effectively "out-of-sample." As a robustness check, we also conduct a joint estimation of the model by estimating both macro and preference parameters in one stage using macro and yield data.
【字数949】
抱歉，这次从PDF文档复制内容的时候，在word中老是出现f，i等字母缺失，我实在是改得有点头痛...
所以如果对文章感兴趣的童鞋可以下载附件，查看完整paper！
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发表于 2012-11-29 19:57:25
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