Marketing Letters

, Volume 16, Issue 3–4, pp 239–254 | Cite as

Models of Multi-Category Choice Behavior

  • P. B. Seetharaman
  • Siddhartha Chib
  • Andrew Ainslie
  • Peter Boatwright
  • Tat Chan
  • Sachin Gupta
  • Nitin Mehta
  • Vithala Rao
  • Andrei Strijnev
Article

Abstract

Given the advent of basket-level purchasing data of households, choice modelers are actively engaged in the development of statistical and econometric models of multi-category choice behavior of households. This paper reviews current developments in this area of research, discussing the modeling methodologies that have been used, the empirical findings that have emerged so far, and directions for future research. We also motivate the use of Bayesian methods to overcome the computational challenges involved in estimation.

Keywords

multi-category multivariate choices basket data bayesian estimation 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Ainslie, A. and P. E. Rossi. (1998). “Similarities in Choice Behavior Across Multiple Categories,” Marketing Science 17(2), 91–106.Google Scholar
  2. Ainslie, A., G. Sonnier, and S. Moorthy. (2004). “Taming the Intercept Term in Choice Models: An Application to Private Labels,” Working Paper, University of California at Los Angeles.Google Scholar
  3. Albert, J. and S. Chib. (1993). “Bayesian Analysis of Binary and Polychotomous Response Data,” Journal of the American Statistical Association 88, 669–679.Google Scholar
  4. Bell, D. R. and J. M. Lattin. (1998). “Shopping Behavior and Consumer Preferences for Store Price Format: Why Large Basket Shoppers Prefer EDLP,” Marketing Science 17(1), 66–88.Google Scholar
  5. Bell, D. R., T. Ho, and C. S. Tang. (1998). “Determining Where to Shop: Fixed and Variable Costs of Shopping,” Journal of Marketing Research 35(3), 352–369.Google Scholar
  6. Bhat, C. R., S. Srinivasan, and K. W. Axhausen. (2004). “An Analysis of Multiple Interactivity Durations Using a Unifying Multivariate Hazard Model,” Working Paper, The University of Texas at Austin.Google Scholar
  7. Bodapati, A. V. and V. Srinivasan. (2001). “The Impact of Out-of-Store Advertising on Store Sales, “Working Paper,” University of California at Los Angeles.Google Scholar
  8. Boatwright, P., S. Borle, and J. B. Kadane. (2003). “A Model of the Joint Distribution of Purchase Quantity and Timing,” Journal of the American Statistical Association 98, 564–572.CrossRefGoogle Scholar
  9. Borle, S., P. Boatwright, J. B. Kadane, J. C. Nunes, and G. Shmueli. (2004). “Effect of Product Assortment Changes on Customer Retention,” Working Paper, Carnegie Mellon University.Google Scholar
  10. Chiang, J. (1991). “A Simultaneous Approach to the Whether, What and How Much to Buy Questions,” Marketing Science 10(4), 297–315.Google Scholar
  11. Chan, T., Y. Ma, C. Narasimhan, and V. Singh. (2005). “A Store Choice Model with Basket Shopping,” Working Paper, Washington University in St. Louis.Google Scholar
  12. Chib, S. and E. Greenberg. (1995). “Understanding the Metropolis-Hastings Algorithm,” The American Statistician 49(4), 327–335.Google Scholar
  13. Chib, S. and E. Greenberg. (1998). “Analysis of Multivariate Probit Models,” Biometrika 85(2), 347–361.CrossRefGoogle Scholar
  14. Chib, S., P. B. Seetharaman, and A. Strijnev. (2002). “Analysis of Multi-Category Purchase Incidence Decisions Using IRI Market Basket Data,” Advances in Econometrics 16, 55–90.Google Scholar
  15. Chib, S., P. B. Seetharaman, and A. Strijnev. (2004). “Model of Brand Choice With a No-Purchase Option Calibrated to Scanner-Panel Data,” Journal of Marketing Research 41(2), 184–196.CrossRefGoogle Scholar
  16. Chib, S., P. B. Seetharaman, and A. Strijnev. (2005). “Joint Modeling of Multiple Category Incidence and Private Label Choice, Accounting for No Category Incidence and Panel Heterogeneity,” Working Paper, School of Management, University at Buffalo.Google Scholar
  17. Chintagunta, P. K. and S. Haldar. (1998). “Investigating Purchase Timing Behavior in Two Related Product Categories,” Journal of Marketing Research 35(1), 43–53.Google Scholar
  18. Chung, J. and V. R. Rao. (2003). “A General Choice Model for Bundles with Multiple-Category Products: Application to Market Segmentation and Optimal Pricing for Bundles,” Journal of Marketing Research 40(2), 115–130.CrossRefGoogle Scholar
  19. Cox, D. R. (1972). “The Analysis of Multivariate Binary Data, Applied Statistics,” Journal of the Royal Statistical Society, Series C 21(2), 113–120.Google Scholar
  20. Deepak, S., A. Ansari, and S. Gupta. (2002). “Investigating Consumer Price Sensitivities Across Categories,” Working Paper, University of Iowa.Google Scholar
  21. Dhar, R. and I. Simonson. (1999). “Making Complementary Choices in Consumption Episodes: Highlighting Versus Balancing,” Journal of Marketing Research 36(1), 29–44.Google Scholar
  22. Elrod, T., G. J. Russell, A. D. Shocker, R. L. Andrews, L. Bacon, B. L. Bayus, J. D. Carroll, R. M. Johnson, W. A. Kamakura, P. Lenk, J. A. Mazanec, V. R. Rao, and V. Shankar. (2002). “Inferring Market Structure from Customer Response to Competing and Complementary Products,” Marketing Letters 13(3) 221–232.CrossRefGoogle Scholar
  23. Erdem, T. (1998). “An Empirical Analysis of Umbrella Branding,” Journal of Marketing Research 35(3), 339–351.Google Scholar
  24. Erdem, T. and B. Sun. (2002). “An Empirical Investigation of the Spillover Effects of Advertising and Sales Promotions in Umbrella Branding,” Journal of Marketing Research 39, 1–16.CrossRefGoogle Scholar
  25. Erdem, T. and R. Winer. (1999). “Econometric Modeling of Competition: A Multicategory Choice-Based Mapping Approach,” Journal of Econometrics 89, 159–175.Google Scholar
  26. Goldberg, S. M., P. E. Green, and Y. Wind. (1984). “Conjoint Analysis of Price Premiums for Hotel Amenities,” Journal of Business 54(1), 111–132.Google Scholar
  27. Green, P. E. and M. T. Devita. (1974). “A Complementarity Model of Consumer Utility for Item Collections,” Journal of Consumer Research 1(4), 56–67.Google Scholar
  28. Green, P. E., Y. Wind, and A. K. Jain. (1972). “Preference Measurement of Item Collections,” Journal of Marketing Research 9(4), 371–377.Google Scholar
  29. Hansen, K., V. Singh, and P. K. Chintagunta. (2003). “Understanding Store Brand Purchase Behavior Across Categories,” Working Paper, Northwestern University.Google Scholar
  30. Ho, T., C. S. Tang, and D. R. Bell. (1998). “Rational Shopping Behavior and the Option Value of Variable Pricing,” Management Science 44(12), 145–160.Google Scholar
  31. Hougaard, P. (2000). Analysis of Multivariate Survival Data. New York: Springer Verlag.Google Scholar
  32. Iyengar, R., A. Ansari, and S. Gupta. (2003). “Leveraging Information Across Categories,” Quantitative Marketing and Economics 1(4), 425–465.CrossRefGoogle Scholar
  33. Jedidi, K., S. Jagpal, and P. Manchanda. (2003). “Measuring Heterogeneous Reservation Prices for Product Bundles,” Marketing Science. 22(1), 107–130.CrossRefGoogle Scholar
  34. Kamakura, W. A., S. Ramaswami, and R. K. Srivastava. (1991). “Qualification of Prospects for Cross-Selling in the Financial Services Industry,” International Journal of Research in Marketing 26(4), 379–390.Google Scholar
  35. Kim, B. D., K. Srinivasan, and R. T. Wilcox. (1999). “Identifying Price Sensitive Consumers: The Relative Merits of Demographic versus Purchase Pattern Information,” Journal of Retailing 75(2), 173–193.CrossRefGoogle Scholar
  36. Ma, Y., P. B. Seetharaman, and C. Narasimhan. (2005). “Empirical Analysis of Competitive Pricing Strategies with Complementary Product Lines,” Working Paper, Washington University in St. Louis.Google Scholar
  37. Ma, Y. and P. B. Seetharaman. (2004a). “The Multivariate Logit Model for Multicategory Purchase Incidence Outcomes,” Working Paper, Rice University.Google Scholar
  38. Ma, Y. and P. B. Seetharaman. (2004b). “Multivariate Hazard Models for Multicategory Purchase Timing Behavior,” Working Paper, Rice University.Google Scholar
  39. Manchanda, P., A. Ansari, and S. Gupta. (1999). “The Shopping Basket: A Model for Multicategory Purchase Incidence Decisions,” Marketing Science 18(2), 95–114.Google Scholar
  40. Mehta, N. (2005). “Investigating Consumers' Purchase Incidence and Brand Choice Decisions Across Multiple Product Categories,” Working Paper, University of Toronto.Google Scholar
  41. Niraj, R., V. Padmanabhan, and P. B. Seetharaman (2002). “A Cross-Category Model of Households' Incidence and Quantity Decisions,” Working paper, University of Southern California.Google Scholar
  42. Pipper, C. B. and T. Martinussen. (2004). “An Estimating Equation for Parametric Shared Frailty Models with Marginal Additive Hazards,” Working Paper, The Royal Veterinary and Agricultural University, Frederiksberg C, Denmark.Google Scholar
  43. Rao, V. R. (2004). “Bundles of Multi-Attributed Items: Modeling Perceptions, Preferences and Choices,” Working Paper, Cornell University.Google Scholar
  44. Russell, G. J. and W. A. Kamakura. (1997). “Modeling Multiple Category Brand Preference with Household Basket Data,” Journal of Retailing 73(1), 439–461.Google Scholar
  45. Russell, G. J. and A. Peterson. (2000). “Analysis of Cross Category Dependence in Market Basket Selection,” Journal of Retailing 76(3), 367–392.CrossRefGoogle Scholar
  46. Russell, G. J., D. R. Bell, A. Bodapati, C. Brown, J. W. Chiang, G. Gaeth, S. Gupta, and P. Manchanda. (1997). “Perspectives on Multiple Category Choice,” Marketing Letters 8(3), 297–305.CrossRefGoogle Scholar
  47. Russell, G. J., S. Ratneshwar, A. D. Shocker, D. R. Bell, A. Bodapati, A. Degeratu, L. Hildebrandt, N. Kim, S. Ramaswami, and V. Shankar. (1999). “Multiple Category Decision Making: Review and Synthesis,” Marketing Letters 10(3), 319–332.CrossRefGoogle Scholar
  48. Seetharaman, P. B. (2004). “The Additive Risk Model for Purchase Timing,” Marketing Science 23(2), 234–242.Google Scholar
  49. Seetharaman, P. B., A. Ainslie, and P. K. Chintagunta (1999). “Investigating Household State Dependence Effects Across Categories,” Journal of Marketing Research 36(4), 488–500.Google Scholar
  50. Singh, V. P., K. Hansen, and S. Gupta. (2005). “Modeling Preferences For Common Attributes in Multicategory Brand Choice,” Journal of Marketing Research 42(2), 195–209.CrossRefGoogle Scholar
  51. Song, I. and P. K. Chintagunta. (2001). “Investigating Cross-Category Effects of Retailer's Marketing Activities: Application of Random Coefficient Choice Models with Aggregate Data,” Working Paper, University of Chicago.Google Scholar
  52. Song, I. and P. K. Chintagunta. (2004). “A Discrete/Continuous Model for Multi-Category Behavior of Households,” Working Paper, University of Chicago.Google Scholar
  53. Sudhir, K. (2001). “Structural Analysis of Manufacturer Pricing in the Presence of a Strategic Retailer,” Marketing Science 20(3), 244–264.CrossRefGoogle Scholar
  54. Van den Berg, G. J. (2000). “Duration Models: Specification, Identification, and Multiple Durations,” Working Paper, Free University, Amsterdam, The Netherlands.Google Scholar
  55. Villas-Boas, J. M. and Y. Zhao. (2005). “Retailers, Manufacturers, andIndividual Consumers: Modeling the Supply Side in the Ketchup Marketplace,” Journal of Marketing Research 42(1), 83–95.CrossRefGoogle Scholar
  56. Walters, R. G. (1991). “Assessing the Impact of Retail Price Promotions on Product Substitution, Complementary Purchase and Inter-store Displacement,” Journal of Marketing 55(1), 17–28.Google Scholar
  57. Walters, R. G. and S. B. MacKenzie. (1988). “A Structural Equation Model of the Impact of Price Promotions on Store Performance,” Journal of Marketing Research 25(4), 551–563.Google Scholar

Copyright information

© Springer Science + Business Media, Inc. 2005

Authors and Affiliations

  • P. B. Seetharaman
    • 1
  • Siddhartha Chib
    • 2
  • Andrew Ainslie
    • 3
  • Peter Boatwright
    • 4
  • Tat Chan
    • 2
  • Sachin Gupta
    • 5
  • Nitin Mehta
    • 6
  • Vithala Rao
    • 5
  • Andrei Strijnev
    • 7
  1. 1.Rice UniversityHouston
  2. 2.Washington UniversitySt. Louis
  3. 3.University of CaliforniaLos Angeles
  4. 4.Carnegie Mellon UniversityUSA
  5. 5.Cornell UniversityUSA
  6. 6.University of TorontoToronto
  7. 7.University of TexasDallas

Personalised recommendations