Understanding reference-price shoppers: A within- and cross-category analysis

The authors attempt to draw profiles of reference-price shoppers. Specifica lly, the authors study how selected factors that affect brand choice are co rrelated with consumer sensitivity to gains and losses with respect to inte rnal reference prices. They also study the interaction between sociodemogra phics and gain and loss sensitivity. Furthermore, the authors analyze cross -category correlations in gain and loss sensitivity to shed light on their individual- and category-specific characters. In three categories, the resu lts show significant heterogeneity in loss sensitivity among consumers and indicate that loss sensitivity is greater and more heterogeneous than gain sensitivity. Across categories, the results show that loss-sensitive shoppe rs are less influenced by past brand use and that both loss- and gain-sensi tive shoppers more sensitive to price, display, and feature than the averag e consumer. Loss-sensitive households tend to be larger, and their heads ar e less likely to be fully employed, whereas gain-sensitive households have no clear demographic profile. The authors also discuss the limitations of l atent-class models in profiling consumer segments and show how these proble ms are overcome using models with continuous, correlated multivariate distr ibutions.