Choosing among diffusion models: Some empirical evidence

Is there a ‘best’ diffusion model? How many and which parameters will adequately represent the long-run diffusion process? Two studies using first purchase data for nineteen durable goods are used to systematically compare twenty-four alternative diffusion models: a meta-analytic study, which pools across categories, and an economic approach, which determines the best fitting model for each category individually. A number of guidelines are produced, which stand to improve the choice of diffusion models in forecasting, theory testing, and normative studies.     

Segmentation of Hedonic Consumption: An Application of Latent Class Analysis to Consumer Transaction Databases

While the broad and growing sector of leisure, culture and entertainment is rapidly adapting to marketing, little is known about segmentation in this field. The sector has customer and transaction databases of very good quality, but usage-based segmentation in this new field poses new problems, as hedonic consumption goods are importantly different from other consumption goods. The type of consumer choice behavior suggested in the literature demands a segmentation of category purchase incidence identified transaction data based on Latent Class Analysis. We illustrate such an approach to a library transaction database. The article concludes with a reflection on the results and suggests further directions for research.     

Factors Influencing Successful Brand Extensions

Organisations frequently follow brand extension strategies. This paper investigates the impact of category similarity, brand reputation, perceived risk and consumer innovativeness on the success of brand extensions in FMCG, durable goods and services sectors. A set of hypotheses were developed and tested in a study amongst 701 consumers. The findings show that extensions into categories more similar to the original brand tend to be more readily accepted. Likewise, the reputation of the original brand is an important factor influencing the success of the extension. These findings are consistent across FMCG, durable goods and services brands. However, perceived risk about the extension category was only found to enhance acceptability of extensions for durable goods and services brands. Innovative consumers are more positively disposed towards service brand extensions than FMCG and durable goods brand extensions.     

品牌品类扩张边界的经济分析:基于选择成本分析范式

基于选择成本分析范式,通过引入品类相似系数这一新概念,构建数理模型,分析品类扩张的内在机制。结果表明,品类数量的增加将有利于品牌需求量的提高,但由于消费者选择成本的存在,品类数量的进一步增加将会降低品牌信用度,造成选择成本的增加,从而抑制需求量的扩大,最终品类数量和品牌需求量将会趋向于均衡状态,存在品牌品类扩张的边界。     

Conjunctive screening in models of multiple discreteness

Consumer demand for products often result in the purchase of multiple goods at the same time. Corner solutions, or the non-purchase of items, occur when consumers have strong preference for some goods that do not satiate and weak preference for other goods. However, if non-purchase arises because a consumer finds particular brands and attributes unacceptable, leading to the formation of consideration sets, then estimates of preference will be too extreme and biased. In this paper, we extend the work on consideration sets and discrete choices to a wider class of models, and develop a model of multiple discreteness with conjunctive screening of the alternatives that remove offerings from consideration. We propose a method for consideration set formation that does not require one to specify a partitioned space of the augmented variable, and that can be adapted into the class of choice models in which an outcome variable is removed. We explore implications for disentangling non-purchase due to consideration set formation using two data sets of ice cream and frozen pizza purchases. The ice cream data, in which responses are both discrete and volumetric, allow us to compare differences in how screening affect purchase incidence versus volumetric demand per incidence. Screening reduces the estimated number of customers with positive demand but leads to an increase in demand for those not screened. In the frozen pizza data, we find that conjunctive screening accounts for many of the observed corner solutions and leads to estimates of preference and satiation that differs from traditional models of multiple-discreteness without screening.     

海上货物运输法理论流变的哲学回应(二)

前述仅仅是问题的一个方面。为何此时期民族国家对规制海上货物运输活动表现出高涨的激情呢?让我们把目光投向法国这个当时欧洲的大国。现代欧洲国家意识牢牢地占据着19世纪初的法国,某种意义上,可以认为私法的法典化是欧洲现代国家形成中的伴随品。国家意识不断冲击法律层面的     

Costly search and consideration sets in storable goods markets

Costly search can result in consumers restricting their attention to a subset of products–the consideration set–before making a final purchase decision. The search process is usually not observed, which creates econometric challenges. I show that inventory and the availability of different package sizes create new sources of variation to identify search costs in storable goods markets. To evaluate the importance of costly search in these markets, I estimate a dynamic choice model with search frictions using data on purchases of laundry detergent. My estimates show that consumers incur significant search costs, and ignoring costly search overestimates the own-price elasticity for products more often present in consideration sets and underestimates the elasticity of frequently excluded products. Firms employ marketing devices, such as product displays and advertising, to influence consideration sets. These devices have direct and strategic effects, which I explore using the estimates of the model. I find that using marketing devices to reduce a product’s search cost during a price promotion has modest effects on the overall category revenues, and decreases the revenues of some products.     

The role of taxonomic and goal‐derived product categorization in,within, and across category judgments

Consumers can face two types of judgment and choice situations: They may be considering products that are classified in a single product category, or products that may belong to several different product categories. This article compares these within‐ and across‐category judgments on the basis of the distinction between taxonomic and goal‐derived categorization. The first study examines how products that belong to taxonomic and goal‐derived categories are represented in memory. The findings support the view that taxonomic categories differ from goal‐derived categories in terms of the ease with which the features shared between members of the category are accessible and the type of features that are used to represent the members. In turn, these differences influence consumer beliefs, judgments, and choice sets when consumers make within‐ and across‐category product comparisons. A second study examines how consumers' familiarity with consumption situations influences the construction of choice sets. Results indicate that as familiarity with consumption situations increases, consumers construct more narrowly defined, within‐category choice sets, whereas in less‐familiar situations consumers construct broader, across‐category choice sets. The implication of these findings on marketing action is discussed. © 2001 John Wiley & Sons, Inc.     

Ernest Dichter and motivation research: new perspectives on the making of post-war consumer culture

Advertising as a proportion of national income rose from the late 1940s and peaked in the mid-to-late 1950s. This growth however exhibited inflection points in 1949 and 1951 which coincided with political economy shifts. During this period of growth all sectors producing consumer goods increased expenditure on advertising; expenditure on advertising by the tobacco, and the clothing and footwear sectors rose the most relative to consumer spending on these product categories. From the mid-1950s, advertising of household goods, a category which included electrical durables and furniture, rose at the fastest rate.     

A multi-category customer base analysis

Customer base analysis is an essential tool to measure and develop relationships with customers. While various models have been proposed in a noncontractual setting, they focus primarily on analyzing transactional patterns associated with a single product category or a firm-level activity, such as the times at which purchases are made at a particular retailer. This research proposes a modeling framework for customer base analysis in a multi-category context. Specifically, we model the time between a customer's purchases at the firm and the product categories that comprise her shopping basket arising from multi-category choice decisions. The proposed model uses a latent space approach that parsimoniously captures the dynamics of multi-category shopping behavior due to the interplay between purchase timing and shopping basket composition. We also account for interdependence among multiple categories, temporal dependence across category choices, and latent customer attrition. Using category-level transaction data, we show that the proposed model offers excellent fit and performance in predicting customer purchase patterns across multiple categories. The forecasts and inferences afforded by our model can assist managers in tailoring marketing efforts across categories.     

Impact of different types of in-store displays on consumer purchase behavior

Research on consumer in-store shopping behavior does not account for the existence of different types of display locations (e.g. storefront, store rear, secondary, front end cap, rear end cap, and shelf displays). This article focuses on accounting for and understanding the impact of various displays on consumer purchase behavior based on the Stimulus-Organism-Response (SOR) theory. Specifically, we study how displays closer to and farther from the main location of the focal category influence consumer purchase behavior. Furthermore, within the different types of displays we investigate the impact of specific types of displays on consumer's category purchase and brand choice and the moderating role of price and discounts. A hierarchical Bayesian model is estimated using scanner panel data for a large U.S. grocery chain that contains unique information on the number of product facings at multiple display locations within a store. We find that displays closer to the focal category have a larger impact, with front end cap displays having the largest impact on category purchase and shelf displays having the largest impact on brand choice. We also demonstrate the synergistic impact of price and discounts in enhancing the impact of displays on consumer purchase behavior and brand choice. Equipped with these findings we propose a display allocation optimization that results in an average increase in revenue of about 11.15% and a strategy to distribute displays across all locations in the store rather than letting one location dominate.     

A censored random coefficients model for the detection of zero willingness to pay

In this paper we address the problem of negative estimates of willingness to pay. We find that there exist a number of goods and services, especially in the fields of marketing and environmental valuation, for which only zero or positive WTP is meaningful. For the valuation of these goods an econometric model for the analysis of repeated dichotomous choice data is proposed. Our model restricts the domain of the estimates of WTP to strictly positive values, while also allowing for the detection of zero WTP. The model is tested on a simulated and a real data set.     

Why does not everybody purchase fair trade products? The question of the fairness of fair trade products' consumption for consumers1

Current statistics show that more than three out of four people in France have heard about fair trade. However, fair trade goods are purchased in significantly higher proportions by executive class people, individuals with a postgraduate education, urban dwellers and high‐income earners. Why does not everybody purchase fair trade products? An important question follows: is fair trade not really fair for consumers? This paper seeks to gain deeper insight into what social features give rise to the consumption of fair trade goods using quantitative and qualitative data to verify the reasons for which fair trade goods are consumed by particular groups in society. It shows that the lack of access to information and financial resources can explain consumers' refusal to purchase fair trade products. But this explanation is incomplete, as the meaning given by consumers to their consumption appears to be a key‐factor to understand their behaviour: refusing to buy fair trade goods can be a deliberate choice.     

Online luxury goods with price discount or onsite luxury goods with luxury services: Role of situation-specific thinking styles and socio-demographics

Today, the luxury goods and service market is growing faster than ever. However, despite its growth, we do not know much about the ways in which consumers choose to shop online or in store when buying luxury goods. We also lack insight into the factors that can affect such luxury consumption decisions. The purpose of this study is to investigate whether consumers prefer to buy luxury goods online at a discounted price or would rather buy luxury goods in store with additional luxury services at a cover price. This study also examines the extent to which such decisions can be driven by their situation-specific thinking styles as well as other socio-demographic variables. The results show that participants adopted a rational thinking style when deciding to buy luxury goods online with price discounts. On the other hand, an experiential thinking style was evoked when participants chose to visit a store offering luxury brands and luxury services. In addition to momentary thinking orientations, gender as well as income were found to be relevant to a consumer's choice in a shopping platform when seeking luxury brands. More details about the study's findings and their implications are discussed below.     

Managing product safety of imported Chinese goods

While recent recalls and scares have focused greatly on Chinese manufactured toys and foodstuffs, the issue of product safety extends to a wide variety of Chinese-produced goods. The supply chain in China is characterized by cost pressures and quality fade, multiple levels of outsourcing often involving small producers, a large number of counterfeit goods, Chinese cleverness at evading detection, and poor product safety surveillance by both the Chinese and U.S. governments. While some of these characteristics are present in other developing economies, few countries—save China—face all of these issues. To best counteract these forces, companies which outsource goods from China need a well-defined strategy to improve product safety. This strategy should encompass the practices of developing an organizational unit responsible for product safety, securing greater control over raw material sourcing in China, using extreme care in choosing Chinese subcontractors, conducting continuous product testing by multiple parties, being especially vigilant for counterfeits, and improving product traceability. Toward the end of ensuring items which meet quality standards, product safety auditing allows firms to assess their management of product safety of Chinese-made goods.     

The effect of category label specificity on consumer choice

The current research demonstrates the category specificity effect, whereby an individual’s choice of options belonging to different categories depends on whether the options are categorized in a specific or abstract manner. In particular, when categories do not contain labels that specifically convey category knowledge, individuals tend to view the assortment as having more varied alternatives, leading to greater variety-seeking. Three laboratory studies employing the context of food menu selections were conducted to test our hypotheses. Study 1 and Study 2 reveal that, given the identical assortment of dishes, individuals are likely to order a greater variety of dishes when the menu contains no category labels or abstract category labels, as opposed to when it contains specific category labels. Furthermore, the use of abstract category labels increases the number of dishes individuals order. We further show that this category specificity effect on choice is mediated by the enhanced perception of variety offered in the menu. Study 3 demonstrates that the effect of category specificity is moderated by an individual’s familiarity with the food category.     

Beyond formal retailing and consumer services: an examination of how households acquire goods and services

The aim of this paper is to show that the acquisition of goods and services through formal firms is less widespread than might be expected. Drawing upon empirical evidence from a deprived neighbourhood, this paper finds that a large proportion of goods and services are informally acquired. In the realm of goods acquisition, informalisation is normally a result of economic necessity and is the first option but second choice of households. In the sphere of consumer services, however, informal modes of provision are often preferred by households and actively chosen over formal consumer services. The implications of these findings for how households acquire goods and services in the wider society are then considered so as to start to open up a debate on the consequences of informality in retailing and consumer services.     

Product category determinants of price knowledge for durable consumer goods

Existing research in pricing has not extensively examined the impact of the product category on consumers’ knowledge of prices, especially for durable goods. In two empirical studies, this paper examines the influence of the product category on consumers’ knowledge of prices for durables. The first study utilizes data from the popular television game show The Price is Right to establish significant cross-category variations in price knowledge, while the second study links these variations to the specific characteristics of each product category. The results extend existing research findings by isolating the impact of product category determinants, such as purchase frequency, advertising exposure, and use of the price-quality cue, on consumers’ knowledge of prices.     

The choice of appropriate technology in a general equilibrium model

This paper analyzes the general equilibrium aspects related to the choice of technology. The paper studies the problem from the perspective of a small, labor abundant open economy that does not generate its own technology. The economic planners must choose between two technologies, one better geared toward the production of labor intensive goods, the other to capital intensive goods. It is shown that the choice of technology not only will affect the welfare level, but it can also reverse the pattern of international trade. It is also shown that the imposition of a tariff can lead the planner to choose a different technology from the one that is optimal under free trade.