K. Helsen et D. Schmittlein, UNDERSTANDING PRICE EFFECTS FOR NEW NONDURABLES - HOW PRICE RESPONSIVENESS VARIES ACROSS DEPTH-OF-REPEAT CLASSES AND TYPES OF CONSUMERS, European journal of operational research, 76(2), 1994, pp. 359-374
Citations number
39
Categorie Soggetti
Management,"Operatione Research & Management Science
The objective of this study is to gain insights into the effectiveness
of consumer price promotions on trial/repeat processes of newly intro
duced brands of consumer packaged goods. Using a consumer risk percept
ion perspective, we develop a theoretical framework that relates the e
ffectiveness of consumer price promotions to the depth-of-repeat cycle
, the level of a consumer's brand loyalty, and usage intensity. To eva
luate the theory, we calibrate a multiple spell hazard rate model for
several new product introductions in different product categories. The
results show that promotional price sensitivities are generally highe
r for repeat purchases than for trial. In addition, the results indica
te that loyals are less price sensitive than nonloyals. Finally, heavy
users in the product class are found to be more price sensitive than
light users at the trial stage.