David C. Schmittlein

Integration of the Sales Force: An Empirical Examination

This article develops and tests a model of integration of a marketing function, personal selling. The model, derived from transaction cost analysis as developed principally by Williamson, is formulated as a logistic function, which is estimated with data from the electronic components industry. As expected, integration is associated with increasing levels of asset specificity, difficulty of performance evaluation, and the combination of these two factors. Contrary to the transaction cost model, neither frequency of transactions nor interaction of specificity and environmental uncertainty is significantly related to integration. The transaction cost model improves significantly upon the fit of a simple model relating integration to company size alone. These results suggest that for studying transactions of this kind, it is fruitful to view the firm as a governance structure.

Does Measuring Intent Change Behavior

Past research has established that, while self-reports of purchase intentions can predict behavior, various factors affect the strength of the intentions-behavior link. This article explores one such factor: the impact of merely measuring intent. Our specific question concerns the impact of measuring intent on subsequent purchase behavior. Prior research suggests a mere-measurement hypothesis: that merely measuring intent will increase subsequent purchase behavior. We also suggest a polarization hypothesis: that repeated intent questions will have a polarizing effect on behavior. The results reveal that the effect of merely asking intent to buy once is an increase in the subsequent purchase rate. The effect of repeatedly asking intent for those with low levels of intent is a decreased propensity to buy with repeated measurements. These two effects are reduced given prior experience with the product. The implications of these findings and opportunities for future research are discussed.

Using Segmentation to Improve Sales Forecasts Based on Purchase Intent: Which "Intenders" Actually Buy?

The authors investigate whether the use of segmentation can improve the accuracy of sales forecasts based on stated purchase intent. The common current practice is to prepare a sales forecast by us...

Shopping trip behavior: An empirical investigation

The purpose of this article is to describe shopping trip behavior empirically using shopping trip data. A better understanding of this aspect of the purchase process can assist in generating testable hypotheses as to how the shopping trip decision may influence other choice decisions.

Generalizing the NBD Model for Customer Purchases: What Are the Implications and Is It Worth the Effort?

An often-used scenario in marketing is that of individuals purchasing in a Poisson manner with their purchasing rates distributed gamma across the population of customers. Ehrenberg (1959) introduced the marketing community to this story and the resulting negative binomial distribution (NBD), and during the past 30 years the NBD model has been shown to work quite well. But the basic gamma/Poisson assumptions lack some face validity. In many product categories, customers purchase more regularly than the exponential. There are some individuals who will never purchase. The purpose of this article is to review briefly the literature that addresses these and other issues. The tractable results presented arise when the basic gamma/Poisson assumptions are relaxed one issue at a time. Some conjectures will be made about the robustness of the NBD when multiple deviations occur together. The NBD may work, but there are still opportunities for working on variations of the NBD theme.

Jobs, strikes, and wars: Probability models for duration☆

Abstract A class of stochastic models with behaviorally meaningful parameters and manpower planning implications is presented. These models are used to reanalyze some previously published data on the durations of wars, strikes, and jobs. Job durations are found to be qualitatively different from strike durations. The concepts developed in this paper also allow researchers to “eyeball” and plot their data better even if a formal statistical analysis is not performed.

The Median Residual Lifetime: A Characterization Theorem and an Application

The concept of the median residual lifetime for a probability distribution is outlined and shown to have several advantages over its more common counterpart, the mean residual lifetime. A characterization theorem shows that a Pareto distribution of the second kind or equivalently, a gamma mixture of exponentials is the unique distribution with a linearly increasing median residual lifetime. An empirical example from the literature on strike durations is presented.

Some Characterizations of Stockpiling Behavior Under Uncertainty

The objective of this note is to gain new theoretical insights into stockpiling phenomena. The model used to derive our results envisions consumers as responding optimally to uncertainties in the promotion environment. We show that, all else being equal, consumers will stockpile a promoted product more intensely: (i) the lower the availability of deal opportunities, (ii) the smaller the expected deal discount, and (iii) the lower the uncertainty about the deal/regular price, provided that dealing occurs with high/low frequency.

Surprising Inferences from Unsurprising Observations: Do Conditional Expectations Really Regress to the Mean?

Abstract Most social science descriptions of the statistical regression effect envision the effect as occurring toward the population mean. If individuals that initially had extreme values regress back toward the mean on subsequent observations, then as a corollary individuals who were at the population mean initially are expected to stay at the population mean. Both the regression to the mean statement and its corollary are generally false for models exhibiting a regression effect. For commonly used probability mixture models, conditional expectations of subsequent observations based on previous observations regress not to the mean, but to some other value. Examples are presented using mixtures of normal, Poisson, and binomial random variables. Commentaries are informative essays dealing with viewpoints of statistical practice, statistical education, and other topics considered to be of general interest to the broad readership of The American Statistician. Commentaries are similar in spirit to Letters to...

Understanding price effects for new nondurables: How price responsiveness varies across depth-of-repeat classes and types of consumers

Abstract The objective of this study is to gain insights into the effectiveness of consumer price promotions on trial/repeat processes of newly introduced brands of consumer packaged goods. Using a consumer risk perception perspective, we develop a theoretical framework that relates the effectiveness of consumer price promotions to the depth-of-repeat cycle, the level of a consumers brand loyalty, and usage intensity. To evaluate the theory, we calibrate a multiple spell hazard rate model for several new product introductions in different product categories. The results show that promotional price sensitivities are generally higher for repeat purchases than for trial. In addition, the results indicate that loyals are less price sensitive than nonloyals. Finally, heavy users in the product class are found to be more price sensitive than light users at the trial stage.