Will he buy a surprise? Gender differences in the purchase of surprise offerings

In the last few years, retailers have introduced numerous products that intentionally conceal some information from the consumer at the time of decision making. While prior research has identified contexts in which customers are attracted to such offerings in the aggregate, heterogeneity in customer proclivities is not well-understood. In the present paper, we examine the effect of gender on choice of surprise (vs. certain) offerings at the point of purchase. We propose and find that, on average, men are less likely to opt for a surprise offering compared to women. We examine multiple mechanisms that could explain this effect – emotionality, desire for exploration, and desire for control – and find the strongest support for the latter, demonstrating that it is men's stronger desire for control over the purchase outcome that drives their preference for certain (vs. surprise) offerings. Consequently, contexts or product categories that make it acceptable for men to let go of control attenuate the observed gender difference. We present data from a travel services firm, an online product catalog, and both field and lab studies, providing robust support for this theory across multiple product categories and participant populations. This work concludes with a discussion of the potential boundary effects of the observed gender difference, a managerial roadmap that delineates the ways in which marketers can offer surprise offerings more fruitfully to both men and women, and recommendations for future research.     

Apparel catalog patronage: Demographic,lifestyle and motivational factors

This study was designed to profile catalog shoppers of apparel and to examine their frequency of shopping. Specifically, it focused on the relative importance of consumers' lifestyle, demographic, and motivational factors in catalog shopping patronage. Data from 680 respondents were analyzed. The data indicated a relationship between consumers who shop for apparel from catalogs and some of the variables included in the study. A multiple regression model indicated that when several variables were considered, the frequent catalog shoppers tended to be older and better educated than infrequent catalog shoppers. They were also more likely to engage in inactive pursuits rather than sports activities and were more likely to perceive convenience as an important factor in their decisions to shop from catalogs than were infrequent catalog shoppers.     

Modeling Dependencies in Brand Choice Outcomes Across Complementary Categories

We build an econometric model of a household's contemporaneous brand choice outcomes in complementary product categories. This model explicitly captures cross-category dependencies in brand choice outcomes of a household. Such dependencies have not been modeled in existing multi-category demand models.Our model accommodates cross-category dependencies that arise on account of three component effects: (1) complementarity due to the additional utility that a household derives from the joint purchase of brands in complementary categories, (2) marketing spillovers due to the effects of brands’ prices in one category affecting the households’ latent utilities for brands in the complementary category, (3) unobserved dependencies due to correlations in households’ latent utilities for brands across categories.We estimate our proposed multi-category brand choice model using scanner panel data on cake mix and frosting categories. We find that complementarity accounts for the vast majority of the estimated cross-category effects in demand. We also find that as much as 55 percent of the total retail profit impact of price promotions arise on account of brand-level (focus of our study), as opposed to category-level (focus of previous studies), dependencies in household demand. Finally, we propose an easily interpretable visual representation – Largess and Free-Ride Plot – of cross-category price elasticities that summarizes the differential abilities of brands to influence, or be influenced by, brands in the complementary category.     

International Catalog Mix Adaptation

Abstract

Striking the right balance of adaptation of the international catalog mix may be the key to profitability. U.S. catalog firms, new to international markets, have less experience in adapting than firms in more globalized industries. The literature on international marketing strategy adaptation reveals that this decision depends on the environment, industry, market, product, and characteristics of the firm. This paper examines the influence of market similarity, type of business and the firm's international experience on international catalog adaptation, and explores the effects of catalog adaptation on a firm's performance. We hypothesize that the greater the market similarity, the less likely it is that firms will adjust their catalog. We also argue than adaptation is greater for consumer catalogs than for business-to-business catalogs. A third hypothesis is that more internationally experienced firms will adapt more and a final hypothesis is that a greater degree of adaptation will increase the international catalog performance. The results did not support the association of international catalog adjustment and market similarity, experience, and type of catalog. Findings are mixed both on catalog adaptations and firm performance. We found that some but not all adaptations in the catalog lead to improved performance. We speculate that U.S. catalog firms are making adaptations to reduce the costs of international marketing operations. This cost reduction strategy may not necessarily lead to profitability, thereby discouraging other firms from entering international markets.     

Category-specific coupon proneness: The impact of individual characteristics and category-specific variables

In seeking to enhance the effectiveness of coupon promotions, researchers have long sought to identify “coupon prone” consumers. Previous measures of coupon proneness have not examined differences in coupon usage across product categories and have ignored the confounding effect of coupon attractiveness. An Item Response Theory (IRT)-based framework overcomes these limitations and yields category-specific estimates of propensity to redeem coupons that are independent of coupon attractiveness. The authors utilize an IRT-based model to estimate consumers’ category-specific propensities to redeem coupons for two product and two service categories, and investigate how coupon proneness varies across consumers and across categories as a function of individual characteristics and category-specific variables.The authors find that category-specific measures of propensity to redeem coupons achieve an average accuracy of 89 percent in predicting redemption intentions. Propensity to redeem coupons is also found to be related to category-specific brand loyalty and perceived coupon availability, as well as to individual characteristics such as general coupon proneness, value consciousness and price consciousness. These findings highlight the importance of studying coupon proneness at the category level and suggest that the IRT-based approach has considerable promise as a methodology for studying coupon usage. Using the approach proposed in this study, marketers can forecast the impact coupons are likely to have in their particular category, rather than relying on general coupon proneness measures to predict coupon redemption rates at the category level. The study's findings can also be used to identify categories and consumer segments where coupon promotions are likely to have a larger impact, and have important implications for managers planning joint couponing strategies.     

Print and Online Catalogs

Abstract

A study is presented that examines the influence of print and online catalogs on consumer information processing. Petty and Cacioppo's (1979) elaboration likelihood model and research from the field of humancomputer interaction are used to hypothesize differences in consumer information processing when exposed to retail catalog information via print and online communication modes. Theory suggests, and results support, that a print catalog is more effective at stimulating cognitive elaboration and positive affect than a direct extension of the print catalog online. Implications for academics and practitioners are discussed.     

A comparison of online and offline gender and goal directed shopping online

The aim of this paper is to model the effect of the consumers’ perceptions of their offline and online gendered behaviour on online utilitarian shopping motivation and purchase intentions. We hypothesise that when consumers shop online, their behaviour is mediated by two gendered behaviours, namely offline and online. To test this hypothesis, 515 usable responses were collected in face-to-face interviews. The conceptual model was tested with confirmatory factors analysis (CFA) and structural equation modelling (SEM) across five product categories. Our findings show that the effect of a consumer's perception of their gendered behaviour offline vs. online on online utilitarian shopping motivation and purchase intentions is significantly different. In particular we found that utilitarian shopping motivation online has a significant effect on purchase intentions online mediated by gender (online) overall: strongly for females but not for males. Conversely, utilitarian shopping motivation online has a significant effect on purchase intentions online mediated by gender (offline) for males but not overall and for females.     

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.     

Factors influencing consumers' purchase decision-making in O2O business model: Evidence from consumers' overall evaluation

Online-to-offline (O2O) has become a rapidly growing e-commerce model worldwide, but the factors influencing consumers' purchase decision-making have not been examined well. After exploring the working mechanism of the O2O model, we extract eleven indexes of consumers' overall evaluation in the O2O model with Crawlzilla and R techniques. Social network analysis (SNA) is adopted to build social networks reflecting consumers' overall evaluation in the O2O model. Based on the modified social network and the extracted subgraph, this study (N = 768) reveals consumers' overall evaluation behavior patterns in the O2O model by calculating network density, central potential, edge betweenness. The results show that shoppers overall evaluate the eleven indexes, especially perceived product quality, online product price, promotion intensity, business reputation, and product brand, which reflects the significant associations between the indexes. Among all the eleven evaluation indexes, perceived product quality, online product price, and business reputation dominate consumers’ decision-making behavior. When making purchase decisions, consumers not only overall consider online product price, perceived product quality, and business reputation but also balance perceived product quality, business reputation, and promotion intensity. Finally, we make some suggestions on marketing strategy for e-commerce companies.     

Increasing customer purchase intention through product return policies: The pivotal impacts of retailer brand familiarity and product categories

This study gauges customer perspectives to investigate how return policy generosity (the degree to which a retailer imposes minimal restrictions on returns) influences customer-perceived value and customer purchase intention. It also examines two moderators, retailer brand familiarity (the extent to which the retailer brand is well-known) and product categories (the difference between products with respect to the magnitude of effort required to make a return). An experiment with a 2 × 2 × 2 factorial design was conducted. The results show that return policy generosity increases customer purchase intention by enhancing the perceived value of the policy. Lesser-known retailers benefit more from generous return policies than their well-known competitors, particularly when a product requires significant return effort. Well-known retailers benefit from offering generous return policies only for product categories that involve low levels of return effort. The findings of this study suggest that if a retailer formulates a return policy without considering the moderating effects of retailer brand familiarity and product category, then it will tend to over-invest if the return policy is generous.     

Customer segmentation by web content mining

This article introduces a new dimension, Interpurchase Time (T), into the existing RFM (Recency, Frequency, and Monetary) model to form an expanded RFMT model for parsing consumers' online purchase sequences in a long period to implement customer segmentation. The proposed RFMT model can track and discern changes in customer purchasing behaviors during their whole shopping cycle. Firstly, a web content retrieving system was developed to fetch publicly available customer data on a retailer's website, including demographic information (gender, age, location, etc.) and product information (name, price, date, etc.) of each purchase in a period from 2008 to 2019. The RFMT values of a customer were then computed from the retrieved data and subsequently analyzed by the hierarchical clustering to derive seven homogeneous clusters with specific customer profiles. Subsequently, demographic features and product preferences were identified for each cluster with business insights that can help the retailer to improve customer relationships and to implement targeted recommendation strategies.     

Optimal promotion planning for a product launch in the presence of word-of-mouth

Marketing managers concern that Word-of-Mouth (WOM) can affect the efficiency of sales promotion policy. Sales promotion might also amplify the strength of WOM which further complicates decision-making. In this study, we deploy an agent-based simulation optimization framework to find an efficient sales promotion plan in the presence of WOM for launching re-purchasable products. In this model, consumers' purchase decisions are influenced by price history, availability and satisfaction of the consumers, and positive/negative WOM. We show that taking WOM on board while determining the promotion plan can significantly increase the net present value. However, amplifying WOM might damage the firm's profit for some product categories.     

Factors Determining Consumer Interest in Catalogs

ABSTRACT

This paper attempts to explain how consumer interest in catalogs is determined. A number of factors are identified that influence consumer interest in catalogs. These factors include a set of economic and social factors, and consumer perceived risk, demographics, and prior experience. The influence of these factors on consumer interest in catalogs is tested using data from Saudi Arabia, an emerging market. Results indicate that the economic and social factors influence consumer interest in catalogs. Also, consumer perceived risk, education, income and prior experience are related to consumer interest in catalogs, while gender and marital status are not.     

The influence of price and brand loyalty on store brands versus national brands

Abstract

This article investigates how price and brand loyalty of three frequently purchased product categories can influence the purchase decision process of store brands versus national brands. A multinomial logit model was constructed to analyse the data obtained from a consumer panel. The results confirmed that brand loyalty is the main variable which influences the purchase decision process of both national and store brands. The influence of price on the purchase decision process is product specific. There is a clear distinction between the buyer's profile of store brands and national brands. But there is no evidence of any correlation between demographic variables and national brands or store brands.     

Determinants of Consumer Responses to Direct Marketing Media

Abstract

This study examined consumer propensity to respond to direct marketing offers made via catalogs, direct mail, and direct response TV. A comparison of the relative importance of marketer's reputation, advertising exposure frequency, and the product offer revealed that the latter was the most important determinant of consumer response frequency. Marketer's reputation was found to be more important for direct response TV and less important for catalog advertising: neither did high frequency of media exposure appear to impact on responses to direct mail and direct response television. The findings suggest that the maximization of reach rather than frequency could possibly be the primary media communication goal for selling products through direct mail and direct response television.     

Impact of Multiple Perceived Value on Consumers' Brand Preference and Purchase Intention: A Case of Snack Foods

This study explores product value with reference to brand development. The question of which perceived product value acts dominantly has received very little attention, in particular, whether multiple product value may importantly enhance consumers' brand preference/purchase. This research investigates relationships between multiple perceived snack foods' product value, brand preference and purchase intention. Findings show significantly positive effects of brand preference on purchase intention, and brand preference as a mediator between multiple perceived product value and purchase intention. Findings also reveal multiple value perceptions of snack foods, (e.g., functional-price/value for the money and performance/quality, emotional, and social dimensions) be significant in the formation of brand preference, whereas only functional-price/value for the money and emotional value relate to purchase intention directly.     

The positive and negative effects of inventory on category purchase: An empirical analysis

Product inventory exerts two countervailing forces on the probability of purchase: More inventory on hand reduces the need to purchase; however, theory suggests higher levels of inventory can drive up consumption, thereby increasing the chance of purchase. Moreover, consumers have biased estimations of their own inventory—especially at high levels of inventory (Chandon and Wansink, 2006), which again suggests a positive relationship between inventory and purchase probability. We model the negative (standard) and positive effects of inventory on the probability of purchase. The model is calibrated on ten product categories and fits better than the standard nested logit and an alternative developed by Ailawadi and Neslin (1998). The elasticity of purchase incidence with respect to inventory represents these opposing forces in an intuitive way, implying an inventory threshold below (above) which the net effect is positive (negative). Estimated thresholds are plausible across categories, with the food categories of hot dogs, ice cream and soft drinks showing the largest effects.     

Food or Medicine?

Abstract

Functional foods offer consumers a range of products that contain modified ingredients to treat specific diseases. The value of this product category has grown considerably since its introduction over a decade ago. This paper reports on qualitative research conducted into the choice criteria used for functional foods. It then compares these to the categories outlined in Khan's food choice model (1981) in order to determine whether functional foods should be treated as a food choice purchase. The findings of this research show that functional food can be treated as a food purchase because most of the choice influences found can be categorised into Khan's conceptualisation. However, additions and redefinitions are suggested. A separate category for family influence was found, as was the requirement to redefine “nutrition” within the model to accommodate the curative benefits of functional foods.     

Leveraging Information Across Categories

Companies are collecting increasing amounts of information about their customers. This effort is based on the assumption that more information is better and that this information can be leveraged to predict customers' behavior in a variety of situations and product categories. For example, information about a customer's purchase behavior in one category can be helpful in predicting his potential behavior in a related category, which in turn could help a firm in its cross-selling efforts. In this paper, we present a model to better understand and predict a consumer's purchases and preferences when we may have limited or no information about him in one or more product categories. Conceptually this involves leveraging information from purchases of other consumers in multiple categories as well as partial information (e.g., purchase in one of the categories) of the target consumer. Our approach builds on the pioneering work of (Rossi et al. (1996)) who demonstrate the value of purchase information in the context of a single product category. We present results from an extensive simulation as well as an application on scanner panel data. Our simulation shows many interesting and somewhat surprising results. Specifically, we find that compared to a single-category analysis, a cross-category analysis does not lead to any significant improvement in data likelihood in most cases. Therefore, the single-category analysis of (Rossi et al. (1996)) is even more powerful than previously thought. However, we also find that a cross-category analysis does improve parameter recovery in many situations as compared to a single-category analysis. It is in these conditions that retailers can use cross-category information to better implement micro marketing programs. We demonstrate the transfer of information across categories in an application of two grocery products—Breakfast Foods and Table Syrup. In spite of a reasonable correlation (0.21) in the price parameter across these two categories, our simulation guidelines predict very little benefit of cross-category analysis over single-category analysis. Our empirical results confirm this prediction.