Jorge M. Oliveira-Castro

Patterns of consumer response to retail price differentials

Decomposing price elasticity suggests that the major impact of promotions is on brand switching rather than increased consumption. Consumers may also buy smaller quantities of more expensive brands when compared to cheaper ones (inter-brand elasticity). Using panel data for the purchases of 80 consumers buying nine product categories over a 16-week period, we verified that inter-brand elasticities occur, and report the relative importance of intra- and inter-brand elasticities in determining quantity price elasticity per shopping occasion for the product category. Brands were classified by informational (socially mediated) and utilitarian (product-mediated) benefits. Intra-brand elasticity was higher than utilitarian inter-brand elasticity, which was higher than informational inter-brand elasticity.

Consumer-based brand equity and brand performance

The relation between consumer-based brand equity and brand performance was investigated across 15 product categories in Brazil and the UK. Brand equity was conceptualized as related to the level of social benefit offered by each brand and was measured with a simple questionnaire that asked consumers to rate brands with respect to their familiarity and quality levels. These measures were then related to brand market share and revenue. Results showed that the relation between consumer-based brand equity and brand performance varies across product categories, indicating that products differ with respect to their level of brandability and suggesting ways to measure it.

Individual differences in price responsiveness within and across food brands

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.

Consumer Brand Choice: Money Allocation as a Function of Brand Reinforcing Attributes

Previous applications of the matching law to the analysis of consumer brand choice have shown that the amount of money spent purchasing a favorite brand tends to match the quantity bought of the favorite brand divided by the quantity bought of all other brands. Although these results suggest matching between spending and purchased quantity, branded goods differ qualitatively among themselves, rendering previous matching analyses incomplete. Consumer panel data containing information about more than 1,500 British consumers purchasing four grocery product categories (baked beans, biscuits, fruit juice, and yellow fats) during 52 weeks were analyzed. All the brands purchased were classified according to the level of informational and utilitarian reinforcement they were programmed to offer. An adaptation of the generalized matching law was adopted, in which the amount of money spent was a power function of the quantity bought, informational level of the brand bought, utilitarian level of the brand bought, and a measure of price promotion.

Effects of base price upon search behavior of consumers in a supermarket: An operant analysis

Abstract The effects of product base price upon the duration of search behavior of consumers was investigated in a supermarket using an operant framework. Searching was interpreted as a pre-current behavior, influenced by the consequences for buying and consuming. Search duration was measured while consumers selected two cleaning products (Experiment 1) and two food products (Experiment 2), differing in base price. Search duration was significantly larger for the more expensive products. Consistent individual differences in search duration were also observed across products. These results, obtained from direct observation of search behavior, corroborate those found in the literature which used laboratory simulations and surveys, and illustrate the feasibility of an operant analysis of consumer behavior.

Substitutability and independence: matching analyses of brands and products

This article presents a comprehensive examination of panel data for 1,847 consumers and 2,209 brands of “biscuits” (a total of 76,682 records) in which matching analysis is employed to define brand substitutability and potential product clusters within the overall category. The results indicate that, while brands performed as expected as perfect substitutes for one another, five subcategories of biscuits into which the brands were divided (chocolate biscuit countlines, chocolate-coated biscuits, filled biscuits, plain sweet biscuits, and savory biscuits) generally performed as separate products. Matching provided a graded measure of substitutability/nonsubstitutability of brands and products, and thereby contributed to their definition.

Market Segmentation From a Behavioral Perspective

A segmentation approach is presented using both traditional demographic segmentation bases (age, social class/occupation, and working status) and a segmentation by benefits sought. The benefits sought in this case are utilitarian and informational reinforcement, variables developed from the Behavioral Perspective Model (BPM). Using data from 1,847 consumers and from a total of 76,682 individual purchases, brand choice and price and reinforcement responsiveness were assessed for each segment across the UK cookie (biscuits) market. Building on previous work, the results suggest that the segmentation of brand choice using benefits sought is useful. This is especially the case alongside demographic variables. This article provides a theoretical and practical segmentation approach to both the behavioral psychology literature and the wider marketing segmentation literature.

Dynamics of Repeat Buying for Packaged Food Products

Buyers of consumer non-durables tend to buy several brands of a product category in the course of a year, though a few are exclusive buyers of particular brands. The present research investigated the dynamics of successive repeat-buying and penetration levels of groups of brands belonging to similar levels of brand differentiation. It examined the probability of buying brands belonging to the same level of differentiation on successive shopping occasions. Consumer panel data for 80 consumers for weekly purchases of eight product categories over a period of 16 weeks were analysed. Since the number of exclusive buyers of a brand decreases as the duration of sales increases, we hypothesized a decrease in the probability of sequential repeat-buying of brands belonging to the same level of brand differentiation with increases in the number of successive shopping occasions. Similar analysis was undertaken to examine the penetration level of groups of similar brands, which were expected to increase with the period chosen for analysis. Two equations, constructed to describe the dynamics of repeat-buying for groups of brands, were applied to the description of the dynamics of repeat-buying and penetration level of particular brands. The results suggest several managerial applications including the estimation of the proportion of sequential repeat buyers and non-repeat buyers during the product shopping cycle.

Deviations from Matching in Consumer Choice

Consumer researchers have established that most buyers of fast-moving consumer goods such as packed foods practice multi-brand purchasing. Analyses of such products show that most consumers tend to purchase a variety of brands within a product category, selecting among a small “repertoire” of brands rather than being exclusively loyal to a single brand (Ehrenberg, 1988). Research generally shows that in stationary conditions (i.e., the absence of any marked short-term trend in sales) (a) only a few consumers acquire a given brand on consecutive shopping occasions; (b) most consumers buy several different brands, selecting them apparently randomly from a subset or “repertoire” of known, tried and tested brands. At the brand level; (c) each brand attracts only a small percentage of 100%-loyal consumers; (d) brands within a product category tend to differ broadly with respect to their penetration levels but tend to be more similar in terms of their average purchasing frequency; and (e) brands with smaller penetration levels (or market shares) also tend to show smaller average buying frequencies and smaller percentages of 100%-loyal consumers (i.e., the effect known as “Double Jeopardy”). These patterns have been demonstrated for a variety of product categories, from food and drinks to aviation fuel, from personal care products to pharmaceutical prescriptions, for patterns of shopping trips and selection of store chains (Ehrenberg, 1988; Uncles et al., 1995; Goodhardt et al., 1984).

Product Substitutability and the Matching Law

The applicability of matching analysis, pioneered in the context of laboratory experiments, to the investigation and interpretation of consumer choice in natural environments is explored by the examination of sequential purchases of four product categories based on information from a panel of British consumers. Over a 52-week period, participants recorded data on the brands, quantities, and prices of their purchases. Matching analysis was employed, and individual and aggregated results showed that consumers generally behave according to the predictions of the matching law when the data is averaged over 3- and 5-week periods. The matching results were assessed in light of the results of a substitutability scale, which allowed consumers to state the perceived level of substitutability, independence, and complementarity for 13 product combinations. The results are generally supportive of the predictions made based on the matching results; however, the antimatching that was expected to characterize purchase patterns for complementary products was not observed.