Integrating price promotions into the switch of brands model for approximating variety-seeking behaviour
Article publication date: 2 February 2015
The purpose of this paper is to describe the further development of the previously introduced switch of brand (SB) model (presented in 2012) which helps to approximate variety-seeking behaviour (VSB) out of household panel data.
Based on existing theoretical variety-seeking models analysing household panel data, the further expansion of the variety-seeking model “Switch of Brands” (SB) is presented. In the last contribution in the British Food Journal the authors presented this simple but powerful tool to approximate VSB. The further developed model “Switch of Brands – Promotions” (SB PR ) integrates relevant variables into one theoretical variety-seeking model (number of purchased brands, number of purchases, price promotions, etc.). In particular, price promotions were integrated into the SB model in order to deliver even more realistic approximations of households’ VSB.
The explanatory power of the model in view of brand loyalty is tested. The empirical analysis is conducted with scanner household panel data from Austria in three different product categories.
The data analysis shows that the model has an excellent explanatory power concerning brand loyalty, however, not better than the original SB model.
The SB PR model allows interpretations for marketing purposes and brand management including marketing variables (here: price promotions). The model may be applied in any business field where panel data are available.
The model delivers a consistent theoretical framework for approximating VSB by means of purchase histories.
The authors would like to thank the Austrian National Bank, which promoted this study with funds from the “ÖNB Jubiläumsfonds”.
Meixner, O. and Knoll, V. (2015), "Integrating price promotions into the switch of brands model for approximating variety-seeking behaviour", British Food Journal, Vol. 117 No. 2, pp. 588-603. https://doi.org/10.1108/BFJ-12-2013-0348
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