A BRANDS EYE VIEW OF RESPONSE SEGMENTATION IN CONSUMER BRAND CHOICE BEHAVIOR

The authors develop an approach to reveal segmentation in response to marketing variables at a brand-level perspective. In the proposed proc edure, response segmentation is analyzed separately for each brand ins tead of jointly across all brands. This yields a segmentation picture oriented toward the potential targeting objectives of the brand manage r. Using the multinomial logit and probabilistic mixture models, the p rocedure first calibrates consumer response in the brand choice decisi on. Individual-level measures of response for a given marketing variab le (e.g., price) are then computed, and brand-level segments are obtai ned by clustering brand-specific response. Using scanner panel data, t he approach is applied to price response segmentation for brands that compete in the ground coffee category. The results illustrate a series of implications for brand strategy, particularly the potential for ta rgeting marketing activity to different response segments.