Effects of Sales on Brand Loyalty
AbstractAlthough many theoretical industrial organization models are based on the existence of a critical mass of exogenously brand loyal consumers, we find little empirical evidence supporting these assumptions in the orange juice retail market. There are very few loyal consumers. More importantly, the frequency with which stores conduct sales affects the share of loyal types so that loyalty is endogenous rather than exogenous. Households demographics have statistically significant but economically minor effects on switching behavior. Switching across frozen and refrigerated states is very common, leading to more complicated substitution patterns and less loyalty than one observes looking at each state separately.
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Bibliographic InfoArticle provided by De Gruyter in its journal Journal of Agricultural & Food Industrial Organization.
Volume (Year): 4 (2006)
Issue (Month): 1 (July)
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Web page: http://www.degruyter.com
Other versions of this item:
- Huang, Rui & Perloff, Jeffrey M. & Villas-Boas, Sofia B, 2006. "Effect of sales on brand loyalty," CUDARE Working Paper Series 1011R, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Huang, Rui & Perloff, Jeffrey M & Villas-Boas, Sofia B, 2006. "Effect of Sales on Brand Loyalty," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt2qc1p7g9, Department of Agricultural & Resource Economics, UC Berkeley.
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