Individual differences in price responsiveness within and across food brands

Jorge M. Oliveira-Castro, Gordon R. Foxall and Victoria K. James

The Service Industries Journal, 2008, vol. 28, issue 6, 733-753

Abstract: Various researchers have reported that in routine grocery shopping the quantity consumers buy varies little across shopping occasions. Even in the presence of promotions, the largest part of promotional sales peaks has been attributed to brand switching. Recent investigations, however, indicated that the quantity consumers buy may include complex intra- and inter-consumer and intra- and inter-brand choice patterns. Using panel data from more than 1500 British consumers purchasing four food products during 52 weeks, the present study examined whether such complex patterns occur and assessed their relative contribution to overall quantity elasticity. Results showed that consumers buy larger quantities when paying lower prices, both within and across brands, and that consumers who buy larger quantities tend to pay lower prices, both within and across brands. The results also indicated that intra-brand price variations, especially those associated with consumers switching across package sizes, account for the largest portion of changes in quantity. Methodological differences might explain discrepancies among previous findings such as the duration of the sample used, the number of brands examined, and the conceptualization of a brand as including or excluding different package sizes.

Date: 2008
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DOI: 10.1080/02642060801988605

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The Service Industries Journal is currently edited by Eileen Bridges, Professor Domingo Ribeiro, Ronald Goldsmith, Barry Howcroft and Youjae Yi

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