The diffusion of a new service: Combining service consideration and brand choice

We propose an individual-level model of a two-stage service diffusion process. In the first stage, customers decide whether to "consider" joining the service. This (Consideration) stage is modeled by a hazard model. Customers who decide to consider the service move on to the Choice stage, wherein they choose among the service alternatives and an outside No Choice option. This stage is modeled by a conditional Multinomial Logit model. The service provider does not observe the transition in the first stage of potential customers who have yet to choose a brand. Such potential customers may have started to consider joining the service, yet chose the outside alternative in each period thereafter. One of the main contributions of the model is its ability to distinguish between these two non-adopter types. We estimated the model using data on the adoption process of newly introduced service plans offered by a commercial bank. We employed the hierarchical Bayes Monte Carlo Markov Chain procedure to estimate individual as well as population parameters. The empirical results indicate that the model outperforms competing models in breadth of analysis, model fit, and prediction accuracy

A within-attribute model of variety-seeking behavior

Existing models view variety seeking as the result of differences in the level of attribute satiation across attributes. An alternative within-attribute variety-seeking (WAVS) model is proposed. The model posits that variety seeking occurs among the nested features, or meaningful value ranges, of an underlying dimension. The resulting pattern of consumption is represented as an oscillation about a consumer's ideal point on the dimension. An empirical study that illustrates different oscillation patterns is reported.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/47181/1/11002_2004_Article_BF00995114.pd

Taste Tests: Changing the Rules to Improve the Game

In the food industry, taste tests are an important element in product development, test marketing and advertising. The primary factor detracting from the reliability of taste tests is guessing by subjects; it confounds true discrimination and preference with random responses. In this paper simple modifications of discrimination and preference tests are suggested. Easily implemented, these changes do not increase the costs of the test while greatly reducing the probability of a subject guessing correctly. Two experiments to check the effect of these changes on task difficulty were carried out. Results show that there may be some increase in respondent's task difficulty, but this increase is overshadowed by the increased reliability of the suggested test design.taste tests, guessing, reliability

Variety Seeking Through Brand Switching

A concept of variety seeking behavior is modeled as a stochastic brand choice model. The model yields a measure of variety seeking for each individual consumer. Panel data for 28 products are analyzed for each household and the possibility of market segmentation by variety seeking behavior is explored.brand choice behavior, variety seeking, segmentation

Untangling the Effects of Purchase Reinforcement and Advertising Carryover

The dynamic evolvement of market share of a brand in a frequently purchased product category can be driven by two effects, purchase reinforcement, and advertising carryover. The first depends on the actual experience with the brand while the second on the retention of its producer's messages. We present a model to estimate simultaneously the relative magnitude of these two forces. The model also formally treats the issue of temporal aggregation. Our empirical results with several product categories indicate that for monthly and bi-monthly measurement periods, purchase reinforcement dominates carryover of advertising in affecting the evolution of market share.advertising, lagged effect, purchase feedback

Market Share Models as Approximators of Aggregated Heterogeneous Brand Choice Behavior

The commonly used market share models are all based on the implicit assumption of a homogeneous population. However, studies of individual brand choice behavior tend to reject this basic premise. In this paper we attempt to explain why market share models perform well in spite of this underlying misspecification. A model which describes the individual's brand choice behavior is presented. This model allows an individual to follow either the Bernoulli, Markov or Linear Learning process as well as have different parameters from other people following the same process. A market share model which takes full account of this heterogeneity is derived and is compared to the traditional market share model in which homogeneous of consumers is assumed. The error in prediction which would result from the use of the homogeneous model is specified and its properties are examined. Conditions for the use, of the gravitational-type market share model, and, the first order lagged market share model are provided. It is shown that the homogeneous market share model will do well in time-series estimation but that the results will not always be appropriate for use in managerial decisions regarding forecasting and optimization.marketing, marketing: buyer behavior, marketing: measurement

An Investigation into the Order of the Brand Choice Process

This paper investigates the order of the brand choice process at the individual family level using a variety of tests: , likelihood ratio, binomial runs, and multinomial runs tests. The test of stationarity developed permits separate analyses for stationary and nonstationary purchase sequences. Our analyses indicate that the purchase sequences of a majority of stationary consumers are consistent with the zero-order assumption. This result is observed for all the nine frequently-bought packaged goods studied with the use of panel data and for a product category (soft drinks) using experimental data.stochastic brand choice-order of the process