Consumer Choice Patterns and the Net Impact of Feature Promotions
Even in the digital age, feature promotions continue to receive significant investments from CPG manufacturers and retailers. Whether this is money well spent depends on consumers’ (heterogeneous) tendency to switch brands or stores in response to features.
This study proposes a ‘Mixed-pattern Random-effects Nested Logit’ (MRNL) model to analyse the effect of feature promotions in a multi-retailer multi-brand setting.
Across 16 different CPG categories, our results reveal that in all cases a mixture of choice patterns prevails: about half of households exhibit a brand focus (i.e. rather substitute between stores offering that brand), the remaining half show evidence of a store focus (i.e. rather substitute brand offers within a visited store).
We identify household and category characteristics that underlie the choice patterns and offer opportunities for targeting.
Name: Els Gijsbrechts
Position: Professor of Marketing
Company: Tilburg University
Register your attendance
Topic: Business Challenge Webinar
Date/Time: 06 June 2018 13:00 CEST (12:00 BST)
Duration: 60 minutes