Universität zu Köln

Bruno, Hernan A., Cebollada, Javier ORCID: 0000-0001-8645-0456 and Chintagunta, Pradeep K. (2018). Targeting Mr. or Mrs. Smith: Modeling and Leveraging Intrahousehold Heterogeneity in Brand Choice Behavior. Mark. Sci., 37 (4). S. 631 - 649. CATONSVILLE: INFORMS. ISSN 1526-548X

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Abstract

We develop a hierarchical choice model to account for the choice utility heterogeneity of individual shoppers that belong to the same household. Our model allows us to measure how much variability in purchase behavior exists among individuals in a household, and to compare this to the variability that exists across households. Because of the presence of multiple shoppers from the same household, we also extend the concept of household-level state dependence to consider state dependence at the individual level. We apply our model to five different grocery categories. We find that the intrahousehold heterogeneity in estimated brand intercepts and (to a lesser extent) price sensitivities is about 20%-30% of the interhousehold heterogeneity in these parameters. However, with promotion sensitivities, we find intrahousehold heterogeneity, in most cases, to be as large as interhousehold heterogeneity. Our state dependence results show that past brands purchased by an individual have a much stronger influence on subsequent purchases than those purchased by anyone in the household. We use our estimated utility parameters to compare the expected profitability of promotions targeted at the individual rather than at the household and find substantial (more than 50%) improvements in the incremental revenue of supermarket promotions.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Bruno, Hernan A. UNSPECIFIED UNSPECIFIED UNSPECIFIED Cebollada, Javier UNSPECIFIED orcid.org/0000-0001-8645-0456 UNSPECIFIED Chintagunta, Pradeep K. UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-180572
DOI:	10.1287/mksc.2018.1088
Journal or Publication Title:	Mark. Sci.
Volume:	37
Number:	4
Page Range:	S. 631 - 649
Date:	2018
Publisher:	INFORMS
Place of Publication:	CATONSVILLE
ISSN:	1526-548X
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language GROUP DECISION-MAKING; STATE DEPENDENCE; HOUSEHOLD; PARAMETERS; CATEGORIES Multiple languages Business Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/18057