A Market Basket Analysis Conducted with a Multivariate Logit Model
AbstractThe following research is guided by the hypothesis that products chosen on a shopping trip in a supermarket can indicate the preference interdependencies between different products or brands. The bundle chosen on the trip can be regarded as the result of a global utility function. More specifically: the existence of such a function implies a cross-category dependence of brand choice behavior. It is hypothesized that the global utility function related to a product bundle results from the marketing-mix of the underlying brands. Several approaches exist to describe the choice of specific categories from a set of many alternatives. The models are discussed in brief; the multivariate logit approach is used to estimate a model with a German data set.
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Bibliographic InfoPaper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2005-028.
Length: 11 pages
Date of creation: May 2005
Date of revision:
market basket analysis; multivariate logit model; brand choice behavior; marketing-mix;
Find related papers by JEL classification:
- C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-06-17 (All new papers)
- NEP-DCM-2006-06-17 (Discrete Choice Models)
- NEP-MKT-2006-06-17 (Marketing)
- NEP-UPT-2006-06-17 (Utility Models & Prospect Theory)
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