JUL 29 1982 | Peter M. Guadagni*, John D. C. Little**
This paper presents a multinomial logit model calibrated on scanner data from 100 households over 32 weeks for regular ground coffee purchases. The model is designed to capture brand choice behavior, incorporating variables such as brand loyalty, size loyalty, store promotions, regular shelf price, and promotional price cuts. The model is found to be statistically significant and parsimonious, with the same coefficients used for all coffee brand-sizes. It predicts purchase shares well in a hold-out sample of 100 households over a 32-week calibration period and a subsequent 20-week forecast period. The model also calculates three short-term market response measures: shelf price elasticity of share, percent share increase from a promotion with a median price cut, and promotional price cut elasticity of share. The results show that large share brand-sizes are less responsive to marketing actions compared to smaller share brands. The study highlights the importance of customer loyalty and the impact of promotions on purchase behavior.This paper presents a multinomial logit model calibrated on scanner data from 100 households over 32 weeks for regular ground coffee purchases. The model is designed to capture brand choice behavior, incorporating variables such as brand loyalty, size loyalty, store promotions, regular shelf price, and promotional price cuts. The model is found to be statistically significant and parsimonious, with the same coefficients used for all coffee brand-sizes. It predicts purchase shares well in a hold-out sample of 100 households over a 32-week calibration period and a subsequent 20-week forecast period. The model also calculates three short-term market response measures: shelf price elasticity of share, percent share increase from a promotion with a median price cut, and promotional price cut elasticity of share. The results show that large share brand-sizes are less responsive to marketing actions compared to smaller share brands. The study highlights the importance of customer loyalty and the impact of promotions on purchase behavior.