Discriminating between behaviour using market data from panels

Hsiu-Yuan Tsao

National Chung Hsing University

Leyland Pitt

Simon Fraser University

Colin Campbell

Kent State University

Introduction

Research focusing on the forms of variety-seeking and reinforcement behaviour has received much attention within the literature (Jeuland 1979; Givon 1984; Kahn et al. 1986; Chintagunta 1998). While a characteristic of reinforcement behaviour is an increase in repeat purchase probability, variety-seeking behaviour is typically opposite in nature (Kahn et al. 1986). This research focuses on the influence of reinforcement and variety seeking on promotional responses and marketing variables (Kahn & Raju 1991; Feinberg et al. 1992; Seetharaman & Chintagunta 1998; Trivedi & Morgan 2003) and on behavioural segmentation based on variety seeking and reinforcement (Givon 1985; Yim & Kannan 1999). The findings present implications for managers facing decisions to spend on promotional and loyalty programmes targeted at different behavioural segments such as variety-seeking consumers or loyal consumers in need of reinforcement. A related issue is whether promotional activities should continue towards variety seekers and whether a pulsing strategy is beneficial for the reinforcement behaviour segment (Givon 1984). Trivedi and Morgan (2003) suggest that, within a limited range of intrinsic brand favourability, high variety seekers are less sensitive to the preference order of considered brands. Further, Yim and Kannan (1999) reveal that loyalty-building strategies depend very much on the composition of a brand’s hard-core loyalty base, on reinforcing this base and on marketing mix factors or product attributes.