An extended mover—stayer model for diagnosing the dynamics of trial and repeat for a new brand
✍ Scribed by Chatterjee, Rabikar ;Ramaswamy, Venkatram
- Publisher
- John Wiley and Sons
- Year
- 1996
- Tongue
- English
- Weight
- 925 KB
- Volume
- 12
- Category
- Article
- ISSN
- 8755-0024
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✦ Synopsis
This paper proposes an approach that extends the mover-stayer model to examine the impact of a new brand on brand choice patterns in a mature, frequently purchased product category. The objective is to obtain insights into the dynamics of brand choice following trial and repeat purchase of the new brand. The analysis uses consumer panel data on brand choices over a limited number of consecutive purchase occasions spanning the new brand introduction. The estimated parameters of the model provide diagnostic information for possible managerial action. An illustrative empirical application of the model demonstrates some of the insights into consumer buying patterns following a new brand introduction and potential managerial implications. KEY WORDS brand choice; stochastic models; new product trial/repeat 'stayers', who remain in the same state throughout, and the 'movers', who change states according to a Markov process (i.e. the probability of occupying a particular state on a particular occasion depends on the state last occupied). In the brand choice context, the states correspond to the brands in the choice set. Our approach indicates where trial and repeat purchases of the CCC 8755-0024/96/030165-14 0 1996 by John Wiley & Sons, Ltd.