Download or read book The Effect of Reference Price and Loss Aversion on Consumer Brand Choice Category Purchase and Quantity Decisions written by Mingmei Pang and published by . This book was released on 2017 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this study I investigate the effects of reference price on three consumer purchase decisions: consumer brand choice, purchase incidence, and purchase quantity. First, I compare the impact of internal reference price (IRP) and external reference price (ERP) on the three consumer purchase decisions. I hypothesize that (a) consumers rely more on ERP (vs. IRP) in brand choice and purchase quantity decisions, and more on IRP (vs. ERP) in purchase incidence decision; and (b) consumers use both IRP and ERP simultaneously to evaluate shelf price in all three consumer purchase decisions. Second, I examine the impact of consumers’ loss aversion tendencies on the three consumer purchase decisions. I hypothesize that loss aversion affects all three consumer purchase decisions; that is, consumers respond more sensitively to a loss than to a corresponding gain. I estimate models of brand choice, purchase incidence and purchase quantity using multinomial logistic regression, binary logistic regression, and Poisson regression, respectively. Hypotheses are generally supported based on empirical analyses of scanner data for a battery product category. This study contributes to the literature in two ways. First, it is the first study to test the direct impact of reference price on purchase incidence decisions. Second, it is the first study to incorporate both IRP and ERP variables into purchase incidence and purchase quantity decisions. Overall, this study contributes an understanding of the influence of reference price on three consumer purchase decisions, which provides both manufactures and retailers with valuable knowledge to formulate optimal pricing and promotion strategies.
Download or read book Profiling the Reference Price Consumer written by Sangkil Moon and published by . This book was released on 2006 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Consumers have distinctive price responses that reflect the manner in which they process price information. Many retailers assume that consumers make purchase decisions by simply trading off product preferences with product prices. In contrast, reference price theory argues that consumers use psychologically encoded prices when making a choice. Because the market-level reaction to price depends on the way that consumers use price information, it is important for retailers to understand the extent to which consumers in a particular trading area rely on reference prices. Given this information, retailers are better able to develop optimal pricing policies. In this research, we develop a procedure which classifies individual households into one of three price response segments: a no reference price segment (NRP), a memory-based reference price segment (MBR), and a stimulus-based reference price segment (SBR). NRP consumers take prices as given; they do not compare prices to a reference value. In contrast, MBR and SBR consumers compare current price to a reference value to determine whether a price level is reasonable. MBR consumers base their reference on past prices, while SBR consumers base their reference on the current price of a focal brand. Based upon past research, we assume that this focal brand is the last brand used by the consumer. Both types of reference price mechanisms assume that some aspect of past choice behavior (prices or product selection) impacts the current decision. For this reason, past marketing activity affects current purchase behavior whenever consumers rely on reference prices. We classify consumers into reference price segments using purchase histories of consumers in the toilet tissue product category. Significantly, our results clearly show that reference price consumers (MBR and SBR) constitute the vast majority of the market. In choosing a brand, both MBR and SBR consumers exhibit a characteristic known as loss aversion: they have a strong negative reaction to prices above the reference price and a weaker positive reaction to prices below the reference price. We find that MBR consumers, who recall prices from memory, are considerably more price and promotion responsive than SBR consumers, who rely entirely on price information available at the point of purchase. Our analysis shows that MBR consumers (relative to SBR consumers) pay lower prices, switch brands more frequently, and buy more often under promotional conditions. We believe that this difference occurs because MBR consumers continually monitor the pricing environment and buy when pricing conditions are favorable. Our work implies that MBR and SBR consumers will react differently to retail pricing policies. For example, we would expect that frequent promotions created by a HI-LO retailer would create an alternating pattern of positive and negative impacts for MBR consumers (due to perceived gains and losses over time). However, the impact of these HI-LO promotions on the SBR consumer depends on the depth of the discount: only those promotions that generate prices below the price level of the focal brand will have an effect. In contrast, an EDLP retailer minimizes the gain/loss mechanism of MBR consumers due to infrequent promotions. However, by choosing the price levels of the product category assortment carefully, the same EDLP retailer can ensure that all SBR consumers have a variety of products with reasonable prices, regardless of the identity of the focal brand. In choosing a retail pricing strategy (such as HI-LO versus EDLP), the retailer must take into account the intensity of retail competition, the extent to which the retailer has power in the distribution channel, and the purchase behavior characteristics of consumers in the trading area. However, all else being equal, we would expect the retailer facing a market dominated by MBR consumers would wish to alternate promotions on different brands over time and to publicize this information through advertising. This would ensure that consumers always find a brand whose price falls below its reference value. In contrast, a retailer facing a market dominated by SBR consumers can expect that a heavily promoted brand in one week will become the focal brand in future weeks. Thus, brands priced below the usual price level of this focal brand will benefit from past promotional activity, while brands priced above this focal brand will be hurt. For this reason, the retailer facing SBR consumers should confine promotions to the higher priced items in the category. By providing an analytical tool for understanding the reference price characteristics of the consumer population, our work allows the retailer to forecast the likely impact of changes in pricing policy.
Download or read book Handbook of Pricing Research in Marketing written by Vithala R. Rao and published by Edward Elgar Publishing. This book was released on 2009 with total page 617 pages. Available in PDF, EPUB and Kindle. Book excerpt: Pricing is an essential aspect of the marketing mix for brands and products. Further, pricing research in marketing is interdisciplinary, utilizing economic and psychological concepts with special emphasis on measurement and estimation. This unique Handbook provides current knowledge of pricing in a single, authoritative volume and brings together new cutting-edge research by established marketing scholars on a range of topics in the area. The environment in which pricing decisions and transactions are implemented has changed dramatically, mainly due to the advent of the Internet and the practices of advance selling and yield management. Over the years, marketing scholars have incorporated developments in game theory and microeconomics, behavioral decision theory, psychological and social dimensions and newer market mechanisms of auctions in their contributions to pricing research. These chapters, specifically written for this Handbook, cover these various developments and concepts as applied to tackling pricing problems. Academics and doctoral students in marketing and applied economics, as well as pricing-focused business practitioners and consultants, will appreciate the state-of-the-art research herein.
Download or read book Handbook of Marketing written by Barton A Weitz and published by SAGE. This book was released on 2002-10-16 with total page 605 pages. Available in PDF, EPUB and Kindle. Book excerpt: NEW IN PAPERBACK ′The Handbook of Marketing is different... that Barton Weitz and Robin Wensley are its editors should suggest something out of the ordinary. A glance at the contributors (e.g., Wilkie. Webster, Day, Shocker, Keller, Hauser, Winer, Stewart. Parasuraman. Zeithaml) puts the matter to rest. The Handbook is an extraordinary effort. The blurb on the dust jacket is an understatement-the "Handbook will be invaluable to advanced undergraduates, graduate students, academics, and thoughtful practitioners in marketing"-the book is far more than that..... in short, the Handbook is probably invaluable to all academic researchers′ - Journal of Marketing ′Handbook of Marketing is a rich compilation of thorough reviews in the field of marketing management. The editors have selected premier marketing scholars and have given them the opportunity to examine their area of expertise in a format much less confining than those provided by the major journals in the field. The authors have taken this opportunity and have done an outstanding job not only of reviewing and structuring the extensive body of thought in many major areas of marketing management but also of providing valuable suggestions for further research. They have brought together major contributions from the field of marketing and from other related disciplines. I strongly encourage marketing scholars to consider Handbook of Marketing. The text will certainly appeal to those with interests in marketing management; it may also be useful to those who are more focused on methodological issues but interested in topics that need additional, rigorous investigation.... In summary, Weitz and Wensley should be congratulated for the excellent work in developing Handbook of Marketing. The book fills a major void in the marketing literature on marketing management and will serve the discipline for many years to come′ - Journal of Marketing Research ′This text achieves the rare goal of covering marketing clearly and deeply, with no unnecessary examples or pretty pictures. For the enquiring mind, it is a wonderful link between a basic knowledge of marketing concepts and a grasp of where research in marketing is taking us′ - Ken Simmonds, Emeritus Professor of Marketing and International Business, London Business School The Handbook of Marketing presents a major retrospective and prospective overview of the field of marketing, and provides a landmark reference at a time when many of the traditional boundaries and domains within the marketing discipline have been subject to change. - A high calibre collection compiled by an international and extremely distinguished advisory board of marketing academics - With contributions from leading scholars in the field, each covering the latest research issues in particular areas of expertise - Each chapter provides the necessary background for study and research of specific empirical and theoretical topics in marketing. The Handbook of Marketing will be invaluable to advanced undergraduates, graduate students and academics in marketing. International Advisory Board: Sonke Albers Christian-Albrechts-University of Kiel, Germany / Erin Anderson INSEAD, France / Rick Bagozzi Rice University, USA / Patrick Barwise London Business School / Rod Brodie University of Auckland / Anne T Coughlan Northwestern University / George Day University of Pennsylvania / Lars Gunnar-Mattsson Stockholm School of Economics / Hubert Gatignon INSEAD, France / Håkan Håkansson The Norwegian School of Management / Stephen J. Hoch University of Pennsylvania, USA / Kevin Keller Dartmouth College, USA / Donald Lehmann Columbia University, USA / Gilles Laurent HEC, France / Leonard Lodish University of Pennsylvania / Richard Lutz University of Florida / David Midgley INSEAD, France / David Montgomery Stanford University, USA / William Perreault University of North Carolina, USA / John Roberts Stanford University, USA / Allan Shocker University of Minnesota / Piet Vanden Abeele Vlerick Leuven Gent Management School, Belgium / Russell Winer University of California, Berkeley, USA / Dick Wittink Yale School of Management, USA
Download or read book Investigating Consumers Purchase Incidence Brand Choice and Purchase Quantity Decisions in Frequently Purchased Categories written by Hemant Sangwan and published by . This book was released on 2008 with total page 168 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis investigates implications for pricing and promotional policies for retailers and manufacturers in frequently purchased categories based on demand models that incorporate consumers' three purchase decisions, i.e., purchase incidence, brand choice and purchase quantity decisions in a structural framework. In the first chapter, we study how price promotions in one category affect the three purchase decisions in other category (cross-category effects) and uncover the underlying factors that influence the magnitude of cross category effects. We then translate these factors into managerially relevant covariates and discuss the role of each factor in influencing the cross category effects in each of the three purchase decisions. The factors provide retailers and manufacture a set of qualitative tools to make promotional decisions in a short period of time. We demonstrate the empirical application of our framework on scanner panel data set consisting of two related categories cake mix and cake frosting. In the second chapter, we proposed a framework to accurately measure price promotion effects of brands on total category sales in presence of consumer unobserved heterogeneity, price endogeneity, and multiple unit purchases in quantity decisions. The magnitudes of price promotional effects of brands in the category on total category sales help retailers to decide whether it is worthwhile to promote that category or not. This is because the retailer may decide not to promote the category at all if the promotional effects of all brands within the category on total category sales are too small. Price promotional effects of individual brands help retailers to decide which particular brand should be promoted should promotion be introduced in the category. We find that in presence of price endogeneity and ignoring multiple units in purchase quantity decision, priced promotional effects are underestimated in all three purchase decisions significantly. We estimate the proposed model on a data set of a product category (yogurt) in which consumers are observed to make multiple unit purchase on a given shopping trip.
Download or read book JMR Journal of Marketing Research written by and published by . This book was released on 2001 with total page 568 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Marketing Science written by and published by . This book was released on 2000 with total page 442 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The History Of Marketing Science written by Russell S Winer and published by World Scientific. This book was released on 2014-06-27 with total page 529 pages. Available in PDF, EPUB and Kindle. Book excerpt: The field of marketing science has a rich history of modeling marketing phenomena using the disciplines of economics, statistics, operations research, and other related fields. Since it is roughly 50 years from its origins, The History of Marketing Science is a timely review of the accomplishments of marketing scientists in a number of research areas.Different research areas of marketing science, such as Pricing, Internet Marketing, Diffusion Models, and Advertising, are treated to a highly readable and easy-to-digest historical analysis by the contributing authors. Each chapter provides a chronological timeline of key historical developments in the area of marketing science covered. Readers of other disciplinary backgrounds outside of economics, statistics, and operations research will be more than able to appreciate the development of marketing science as a field of research and its pioneers through the book.
Download or read book The Effect of Price Variability on Consumer s Purchase Incidence Brand Choice and Quantity Choice Decisions written by He Zhang and published by . This book was released on 2004 with total page 214 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book SALES PROMOTION AND BRAND EQUITY PERCEPTION written by Dr. Mrityunjay Kumar and published by Ashok Yakkaldevi. This book was released on 2020-03-19 with total page 194 pages. Available in PDF, EPUB and Kindle. Book excerpt: FMCG Market:- Fast Moving Consumer Goods (FMCG) called as Consumer Packaged Goods (CPG).FMCG products are those products which normally purchased by the consumers at a regular interval. Activities of FMCG industry are Production, Distribution, Marketing, Selling, Financing, Purchasing, etc. FMCG industry also actively engaged in Operations, Supply chain, and in General Management. [Source: cii.in] FMCG industry is the fourth largest sector with total market size of US$20.1 billion. Indian FMCG Sector is estimated to grow 60 percent by 2011. FMCG industry provides a wide range of consumable products. In India the competition among FMCG companies is gradually increasing and thus investment in FMCG sector is also increasing. [Source: cii.in] FMCG products include packaged food, dairy products, detergents, coffee, tea, soaps, tobacco, cigarettes, glassware, paper products, pharmaceuticals, consumer electronics, plastic goods, printing and stationery, household products, photography, soft drinks, dry cells, greeting cards, gifts, watches, etc. The low operational cost, strong distribution networks, new technologies and growth in competitive FMCG companies etc. are a few things which holds potential in FMCG industry. Population growth is also a factor which is responsible of success of this industry.
Download or read book Issues in Pricing written by Timothy Michael Devinney and published by Free Press. This book was released on 1988 with total page 440 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Marketing and Consumer Behavior Concepts Methodologies Tools and Applications written by Management Association, Information Resources and published by IGI Global. This book was released on 2014-12-31 with total page 2254 pages. Available in PDF, EPUB and Kindle. Book excerpt: As marketing professionals look for ever more effective ways to promote their goods and services to customers, a thorough understanding of customer needs and the ability to predict a target audiences reaction to advertising campaigns is essential. Marketing and Consumer Behavior: Concepts, Methodologies, Tools, and Applications explores cutting-edge advancements in marketing strategies as well as the development and design considerations integral to the successful analysis of consumer trends. Including both in-depth case studies and theoretical discussions, this comprehensive four-volume reference is a necessary resource for business leaders and marketing managers, students and educators, and advertisers looking to expand the reach of their target market.
Download or read book Consumer Reactions to Price quantity Tactics written by Jun Yao and published by . This book was released on 2015 with total page 458 pages. Available in PDF, EPUB and Kindle. Book excerpt: Marketers employ a variety of pricing tactics such as pennies-a-day, price matching, price partitioning, everyday low pricing and comparative price claims. This thesis adopts the term "tactics" to delineate the marketing strategies that utilize price and quantity (which here specifically refers to the volume or size of a single product) to influence consumer behaviours. There is an emerging research stream examining how consumers respond to various price-quantity tactics. This thesis contributes to this literature by investigating consumer reactions to two different price-quantity tactics. The thesis consists of two independent essays.Essay one identifies and distinguishes between situations where product alternatives are framed with equal quantities and unequal prices where consumers actually compare product prices, and situations where alternatives are framed with equal prices and unequal quantities where consumers actually compare product quantities in order to make judgments and decisions. It examines how consumer comparative judgments and purchase decisions differ in these two situations, and examines the process underlying this effect. Drawing on multi-attribute loss aversion, essay one proposes a greater aversion to quantity loss than price loss among consumers. Results of a series of experimental studies show that the difference between competing brands having unequal sizes and equal prices (e.g., product A: $3.51/300ml versus product B: $3.51/330ml) is generally perceived as larger than the difference between competing brands having unequal prices and equal sizes (e.g., product A: $3.51/300ml versus product B: $3.19/300ml). However, this effect is reversed when equal-value attributes are removed from the comparison (i.e., removal of $3.51 for the former case and removal of 300ml for the latter case) and it is therefore context-dependent. Further, it demonstrates the moderating roles of numerical representation type (Pandelaere, Briers, & Lembregts, 2011) of the price/size differences on the comparative judgments. Finally, it shows that when product alternatives have unequal sizes and equal prices, this leads to a greater perceived difference in product values than when they have unequal prices and equal sizes. As a result, consumers favour the option which is framed as a bigger package, relative to the same option which is framed as a lower price, in product selection.Essay two identifies unit pricing (i.e., displaying unit costs on price tags) as an important price-quantity tactic associated with varying prices and sizes. It proposes a psychological model of how unit pricing affects consumer purchase decisions and tests it in the context of identical product quantities, explaining why the presence of unit price information makes consumers more inclined to choose products with lower unit prices in general. Prior research shows that the presence of unit price information in a grocery shopping context leads consumers to choose lower unit priced products. However, the process underlying this effect remains unclear. Essay two suggests that the unit pricing effect is both cognitively and motivationally driven as it makes it not only easier to find the cheaper options, but also creates a greater non-conscious desire to choose these options. The results from four experiments show that the motivational effect occurs even when products are identically sized. Results also indicate that the motivational effect of unit pricing operates independently of the cognitive effect and therefore is automatic. It finally shows that the motivational effect generalizes to the evaluation of price discounts and discovers a boundary condition where unit pricing actually decreases rather than increases price salience.
Download or read book A Reference Price Based Model of Consumer Brand Choice written by and published by . This book was released on 1988 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Choosing what I Want Versus Rejecting what I Don t Want written by C. Whan Park and published by . This book was released on 1999 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book An Experimental Inquiry Into the Formation of Reference Prices written by Piyush Kumar and published by . This book was released on 1993 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Advances in Consumer Research written by Punam Anand Keller and published by . This book was released on 2003 with total page 440 pages. Available in PDF, EPUB and Kindle. Book excerpt:
