A Multimarket Analysis of Inter-dependent Consumer Response Sensitivities

Voleti, S (2015) A Multimarket Analysis of Inter-dependent Consumer Response Sensitivities. Review of Marketing Science, 13 (1). pp. 59-93. ISSN 1546-5616

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We investigate variation in aggregate consumer response sensitivities to the price, promotion and distribution elements of the marketing mix across US metropolitan markets. Primarily, three questions of research interest are examined – (i) the nature of the relationship between different aggregate response sensitivities and the implications therein, (ii) the usefulness of aggregate area-wide macroeconomic indicators such as inflation, unemployment and poverty in the context of a marketing problem, and (iii) the usefulness of geo-spatial information under a distribution-free approach. Beer category sales data across 49 major US metropolitan markets are analyzed. We find a pattern of strong inter-dependence among aggregate response sensitivities that indicates the existence of distinct, non-overlapping consumer segments. This enables a characterization of metropolitan market areas at an aggregate level. Ignoring inter-dependence mis-characterizes response sensitivity in two-thirds of the markets sampled. Further, on a standalone basis, neither area-wide economic indicators nor geo-spatial information help the analysis, but in conjunction, they vastly improve model fit (by almost 40%), explained variance (by over twice), parameter significance and consequently, insight.

Item Type: Article
Subjects: Marketing
Date Deposited: 15 Apr 2015 08:06
Last Modified: 05 Jul 2023 19:52
URI: https://eprints.exchange.isb.edu/id/eprint/383

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