A Two-State Model of Purchase Incidence and Brand Choice

Randolph E. Bucklin and James M. Lattin
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Randolph E. Bucklin: University of California, Los Angeles
James M. Lattin: Stanford University

Marketing Science, 1991, vol. 10, issue 1, 24-39

Abstract: The authors develop and test a probabilistic model of purchase incidence and brand choice for frequently purchased consumer products. The model incorporates two ways of shopping in a category. Shoppers who have planned their purchasing (made a decision before entering the store) do not process in-store information and show no response to point-of-purchase promotions. Consumers who have not planned their purchasing in a category (deciding at the point of purchase) may process in-store information and may be strongly influenced by promotions. The two modes of information processing are called decision states and are labelled , respectively. The two-state model is calibrated on IRI scanner purchase records for saltine crackers. The model yields a significantly better fit than a one-state nested logit model and provides new insights into the relationship between shopping behavior and consumer purchase response.

Keywords: brand choice; purchase incidence; nested logit; promotion; shopping behavior (search for similar items in EconPapers)
Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:10:y:1991:i:1:p:24-39

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