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Investigating household food interpurchase behavior through market segmentation

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Author Info

  • Diansheng Dong

    (U.S. Department of Agriculture, 1800 M Street NW, Washington, DC 20036)

  • Harry M. Kaiser

    (Cornell University, 349 Warren Hall, Ithaca, NY 14853-7801)

Abstract

In this study, a market segmentation approach is developed and applied to analyze U.S. households' cheese purchases. The segmentation is based on household interpurchase time, or the hazard rate of purchases. In this study, four segments have been discovered in the U.S. market for household cheese purchases. Two of the segments jointly represent about 40% of all cheese-purchasing households and are characterized as frequent buyers with an average interpurchase time of 2 weeks. These frequent-purchase households are larger in size, have greater incomes, have a smaller proportion of African Americans, and are insensitive to coupons. They are often described in the marketing literature as loyal customers. In contrast, the other two segments, which jointly represent about 60% of the households, are characterized by infrequent buyers with an average interpurchase time of 6 weeks. These infrequent-purchase households are smaller in size, have less income, have a higher proportion of African Americans, and are sensitive to coupons. Marketing promotions typically target the infrequent-purchase households. [EconLit citations: D12, C51, C41]. © 2010 Wiley Periodicals, Inc.

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File URL: http://hdl.handle.net/10.1002/agr.20230
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Agribusiness.

Volume (Year): 26 (2010)
Issue (Month): 3 ()
Pages: 389-404

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Handle: RePEc:wly:agribz:v:26:y:2010:i:3:p:389-404

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Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297

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  1. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-79, June.
  2. E.K. Berndt & B.H. Hall & R.E. Hall, 1974. "Estimation and Inference in Nonlinear Structural Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 3, number 4, pages 103-116 National Bureau of Economic Research, Inc.
  3. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
  4. Brian Gould, 1997. "Consumer promotion and purchase timing: the case of cheese," Applied Economics, Taylor & Francis Journals, vol. 29(4), pages 445-457.
  5. Diansheng Dong & J.S. Shonkwiler & Oral Capps, 1998. "Estimation of Demand Functions Using Cross-Sectional Household Data: The Problem Revisited," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 466-473.
  6. Dong, Diansheng & Kaiser, Harry M., 2003. "Coupon Redemption and Its Effect on Household Cheese Purchases," Research Bulletins 122111, Cornell University, Department of Applied Economics and Management.
  7. Timothy J. Richards, 2000. "A discrete|continuous model of fruit promotion, advertising, and response segmentation," Agribusiness, John Wiley & Sons, Ltd., vol. 16(2), pages 179-196.
  8. Dipak C. Jain & Naufel J. Vilcassim, 1991. "Investigating Household Purchase Timing Decisions: A Conditional Hazard Function Approach," Marketing Science, INFORMS, vol. 10(1), pages 1-23.
  9. Wysocki, Allen F., 2005. "A Frictionless Marketplace Operating in a World of Extremes," Choices, Agricultural and Applied Economics Association, vol. 20(4).
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