Dynamic Brand Satiation

36 Pages Posted: 8 Mar 2011 Last revised: 1 Mar 2012

See all articles by Shohei Hasegawa

Shohei Hasegawa

Tohoku University - Graduate School of Economics & Management

Nobuhiko Terui

Tohoku University - Graduate School of Economics & Management

Greg M. Allenby

Ohio State University (OSU) - Department of Marketing and Logistics

Date Written: October 7, 2011

Abstract

A dynamic factor model of brand satiation is developed to explain longitudinal variation in consumer purchases. Factor loadings are associated with a brand’s position along a satiation dimension, and factor scores are associated with a household’s sensitivity to satiation effects. Dynamics are introduced by allowing the factor scores to evolve through time, reflecting variation in household satiation sensitivity. The factor model is imbedded within a direct utility model that allows for both corner and interior solutions, and is shown to fit the data better than alternative specifications. Analysis of a panel dataset of yogurt purchases indicates that household satiation is, in general, temporally accelerating. Implications for product line assortment are explored.

Keywords: Multiple Discreteness, Dynamic Satiation, Compensating Value, Factor Model, Bayesian Estimation

Suggested Citation

Hasegawa, Shohei and Terui, Nobuhiko and Allenby, Greg M., Dynamic Brand Satiation (October 7, 2011). Available at SSRN: https://ssrn.com/abstract=1780548 or http://dx.doi.org/10.2139/ssrn.1780548

Shohei Hasegawa

Tohoku University - Graduate School of Economics & Management ( email )

Kawauchi, Aoba-ku
Sendai, 980-8576
Japan

Nobuhiko Terui (Contact Author)

Tohoku University - Graduate School of Economics & Management ( email )

Kawauchi, Aoba-ku
Sendai, 980-8576
Japan

Greg M. Allenby

Ohio State University (OSU) - Department of Marketing and Logistics ( email )

Fisher Hall 524
2100 Neil Ave
Columbus, OH 43210
United States

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