Abstract
The multinomial logit model is frequently used in marketing research to explain consumers’ brand choice decisions. In almost all applications of this model, the parameters of the consumers’ utility function are assumed to be constant across time. In contrast to this assumption, both marketing theory and statements from marketing practitioners suggest the possibility of short-term fluctuations and long-term changes in consumers’ brand choice behavior. In this paper, nonparametric brand-specific time-variable functions replace the brand-specific constants usually found in brand choice models. I estimate the model for panel data from two product categories and derive management implications.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Abe, Makoto (1998), Measuring Consumer Nonlinear Brand Choice Response to Price, in: Journal of Retailing, Vol. 74, pp. 541–568.
Abe, Makoto (1999), A Generalized Additive Model for Discrete Choice Data, in: Journal of Business & Economic Statistics, Vol. 17, pp. 271–284.
Ailawadi, Kusum L./Gedenk, Karen/Neslin, Scott A. (1999), Heterogeniety and Purchase Event feedback in Choice Models: An empirical analysis with implications for model building, in: International Journal of Research in Marketing, Vol. 16, pp. 177–198.
Ben-Akiva, Moshe/Lerman, Steven R. (1985), Discrete Choice Analysis: Theory and Application to Travel Demand.
Briesch, Richard A./Krishnamurthi, Lakshman/Mzumdar, Tribid/Raj, S. P. (1997), A Comparative Analysis of Reference Price Models, in: Journal of Consumer Research, Vol. 24, pp. 202–214.
Fader, Peter/Lattin, James M./Little, John D. C. (1992), Estimating nonlinear Parameters in the Multinomial Logit Model, in: Marketing Science, Vol. 11, pp. 372–385.
Green, P. J./Silverman, Bernard W. (1994), Nonparametric Regression and Generalized Linear Models.
Guadagni, Peter M./Little, John D. C. (1983), A Logit Model of Brand Choice Calibrated on Scanner Data, in: Marketing Science, Vol. 2, pp. 203–238.
Hastie, Trevor J./Tibshirani, Robert J. (1990), Generalized Additive Models.
Hruschka, Harald (2000), Specification, Estimation and Empirical Corroboration of Gutenberg’s Kinked Demand Curve, in: Albach, Horst/Brockhoff, Klaus/Eymann, E./Jungen, P./Steven, M./Luhmer, A. (eds.), Theory of the firm. Erich Gutenberg’s Foundations and Further Developments, pp. 153–168.
Hruschka, Harald (2002), Market Share Analysis Using Semi-Parametric Attraction Models, in: European Journal of Operational Research, Vol. 138, pp. 212–225.
Kalwani, Manohar U./Yim, Chi K./Rinne, Heikki J./Sugita Yoshi (1990), A Price Expectations Model of Customer Brand Choice, in: Journal of Marketing Research, Vol. 27, pp. 251–262.
Kalyanam, Kirthi/Shively, Thomas S. (1998), Estimating Irregular Pricing Effects: A Stochastic Spline Regression Approach, in: Journal of Marketing Research, Vol. 35, pp. 16–29.
Kalyanaram, Gurumurthy/Little, John D. C. (1994), An Empirical Analysis of Latitude of Price Acceptance in Consumer Package Goods, in: Journal of Consumer Research, Vol. 21, pp. 408–418.
Kooperberg, Charles/Stone, Charles J./Truong, Young K. (1995), Hazard Regression, in: Journal of the American Statistical Association, Vol. 90, pp. 78–94.
Krishnamurthi, Lakshman/Raj, S. P. (1988), A Model of Brand Choice and Purchase Quantity Price Sensitivities, in: Marketing Science, Vol. 7, pp. 1–20.
Lattin, James M. (1987), A Model of Balanced Choice Behavior, in: Marketing Science, Vol. 6, pp. 48–65.
Lattin, James M./Bucklin, Randolph E. (1989), Reference Effects of Price and Promotion on Brand Choice Behavior, in: Journal of Marketing Research, Vol. 16, pp. 299–310.
Maier, Gunther/Weiss, Peter (1990), Modelle diskreter Entscheidungen.
Mazumdar, Tridib/Papatla, Purushottam (1995), Loyalty Differences in the Use of Internal and External Reference Prices, in: Marketing Letters, Vol. 6, pp. 111–122.
McFadden, Daniel (1980), Econometric Models for Probabilistic Choice among Products, in: Journal of Business, Vol. 53, pp. s13–s34.
Mela, Carl F./Gupta, Sunil/Jedidi, Kamel (1998), Assessing long-term promotional influences on market structure, in: International Journal of Research in Marketing, Vol. 15, pp. 89–107.
Papastefanou, Georgious/Schmidt, Peter/Börsch-Supan, Axel/Lüdtke, Hartmut/Otersdorf Ulrich (eds.) (2001), Social and Economic Analysis of Consumer Panel Data.
Rust, Roland T. (1988), Flexible Regression, in: Journal of Marketing Research, Vol. 25, pp. 10–24.
Tellis, Gerard J. (1988), Advertising Exposure, Loyalty and Brand Purchase: A Two-Stage Model of Choice, in: Journal of Marketing Research, Vol. 25, pp. 134–144.
Wedel, Michel/Leeflang, Peter S. H. (1998), A Model for the Effects of Psychological Pricing in Gabor-Granger Price studies, in: Journal of Economic Psychology, Vol. 19, pp. 237–260.
Wilkie, William L. (1986), Consumer Behavior, John Wiley & Sons.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Baumgartner, B. Measuring Changes in Brand Choice Behavior. Schmalenbach Bus Rev 55, 242–256 (2003). https://doi.org/10.1007/BF03396676
Published:
Issue Date:
DOI: https://doi.org/10.1007/BF03396676