A Brand Choice Model Considering Consumers' Reference Price

The Price Consideration Model of Brand Choice

The workhorse brand choice models in marketing are the multinomial logit (MNL) and nested multinomial logit (NMNL). These models place strong restrictions on how brand share and purchase incidence price elasticities are related. They predict market shares well, but not inter-purchase spell lengths. In this paper, we propose a new model of brand choice, the “price consideration” (PC) model, that...

A Simultaneous Model of Consumer Brand Choice and Negotiated Price

Price Promotion ( In ) consistency and Consumers ’ Brand Evaluations : The Role of Reference Prices

Research suggests that consumers evaluate a brand that is promoted now but never before less favorably than a brand promoted now and also promoted consistently in the past because the former promotional behavior generates negative attributions. The present research examines the alternative possibility that a brand promoted inconsistently (vs. consistently) may be evaluated more favorably becaus...

A Dynamic Model of Brand Choice When Price and Advertising Signal Product Quality

In this paper, we develop a structural model of household behavior in an environment where there is uncertainty about brand attributes, and both prices and advertising signal brand quality. Four quality signaling mechanisms are at work in the model: 1) price signals quality, 2) advertising frequency signals quality, 3) advertising content provides direct (but noisy) information about quality, a...

Brand and Quantity Choice Dynamics under Price Uncertainty

We develop a model of household demand for frequently purchased consumer goods that are branded, storable and subject to stochastic price fluctuations. Our framework accounts for how inventories and expectations of future prices affect current period purchase decisions. We estimate our model using scanner data for the ketchup category. Our results indicate that price expectations and the nature...