Predicting home-appliance acquisition sequences: Markov/Markov for Discrimination and survival analysis for modeling sequential information in NPTB models
AbstractThe acquisition process of consumer durables is a ‘sequence’ of purchase events. Priority-pattern research exploits this ‘sequential order’ to describe a prototypical acquisition order for durables. This paper adds a predictive perspective to increase managerial relevance. Besides order information, the acquisition sequence also reveals precise timing between purchase events (‘sequential duration’) as examined in the literature on durable replacement and time-to-first acquisition. This paper bridges the gap between priority-pattern research and research on duration between durable acquisitions to improve the prediction of the product group the customer might acquire his next durable from, i.e. Next-Product-to-Buy (NPTB) model. We evaluate four multinomial-choice models incorporating: 1) general covariates, 2) general covariates and sequential order, 3) general covariates and sequential duration, and 4) general covariates, sequential order and duration. The results favor the model including general covariates and duration information (3). The high predictive value of sequentialduration information emphasizes the predictive power of duration as compared to order information.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 07/442.
Length: 36 pages
Date of creation: Jan 2007
Date of revision:
cross-sell; sequence analysis; choice modeling; durable goods; analytical CRM;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-17 (All new papers)
- NEP-DCM-2007-03-17 (Discrete Choice Models)
- NEP-ECM-2007-03-17 (Econometrics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Viviana P. Fernandez, 2000.
"Decisions To Replace Consumer Durables Goods: An Econometric Application Of Wiener And Renewal Processes,"
The Review of Economics and Statistics,
MIT Press, vol. 82(3), pages 452-461, August.
- Viviana Fernandez, 2000. "Decisions to Replace Consumer Durables Goods: An Econometric Application of Wiener and Renewal Processes," Documentos de Trabajo 87, Centro de Economía Aplicada, Universidad de Chile.
- Barry L. Bayus, 1992. "Brand Loyalty and Marketing Strategy: An Application to Home Appliances," Marketing Science, INFORMS, vol. 11(1), pages 21-38.
- Johnson, Michael D, 1984. " Consumer Choice Strategies for Comparing Noncomparable Alternatives," Journal of Consumer Research, University of Chicago Press, vol. 11(3), pages 741-53, December.
- Ratneshwar, S & Pechmann, Cornelia & Shocker, Allan D, 1996. " Goal-Derived Categories and the Antecedents of Across-Category Consideration," Journal of Consumer Research, University of Chicago Press, vol. 23(3), pages 240-50, December.
- Murphy, Patrick E & Staples, William A, 1979. " A Modernized Family Life Cycle," Journal of Consumer Research, University of Chicago Press, vol. 6(1), pages 12-22, June.
- Hauser, John R & Urban, Glen L, 1986. " The Value Priority Hypotheses for Consumer Budget Plans," Journal of Consumer Research, University of Chicago Press, vol. 12(4), pages 446-62, March.
- Kasulis, Jack J & Lusch, Robert F & Stafford, Edward F, Jr, 1979. " Consumer Acquisition Patterns for Durable Goods," Journal of Consumer Research, University of Chicago Press, vol. 6(1), pages 47-57, June.
- Geoffrey Soutar & Steven Cornish-Ward, 1997. "Ownership patterns for durable goods and financial assets: a Rasch analysis," Applied Economics, Taylor and Francis Journals, vol. 29(7), pages 903-911.
- Seetharaman, P B & Chintagunta, Pradeep K, 2003. "The Proportional Hazard Model for Purchase Timing: A Comparison of Alternative Specifications," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(3), pages 368-82, July.
- Peter E. Rossi & Robert E. McCulloch & Greg M. Allenby, 1996. "The Value of Purchase History Data in Target Marketing," Marketing Science, INFORMS, vol. 15(4), pages 321-340.
- 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.
- Paas, Leonard J., 1998. "Mokken scaling characteristic sets and acquisition patterns of durable- and financial products," Journal of Economic Psychology, Elsevier, vol. 19(3), pages 353-376, June.
- A. Prinzie & D. Van Den Poel, 2005. "Constrained optimization of data-mining problems to improve model performance: A direct-marketing application," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/298, Ghent University, Faculty of Economics and Business Administration.
- Sudeep Haldar & Vithala Rao, 1998. "A micro-analytic threshold model for the timing of first purchases of durable goods," Applied Economics, Taylor and Francis Journals, vol. 30(7), pages 959-974.
- V. L. Miguéis & D. Van Den Poel & A.S. Camanho & J. Falcao E Cunha, 2012. "Modeling Partial Customer Churn: On the Value of First Product-Category Purchase Sequences," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 12/790, Ghent University, Faculty of Economics and Business Administration.
- Talla Nobibon, Fabrice & Leus, Roel & Spieksma, Frederik, 2009. "The selection of clients for promotion campaigns by means of mathematical programming," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/241747, Katholieke Universiteit Leuven.
- Talla Nobibon, Fabrice & Leus, Roel & Spieksma, Frits C.R., 2011. "Optimization models for targeted offers in direct marketing: Exact and heuristic algorithms," European Journal of Operational Research, Elsevier, vol. 210(3), pages 670-683, May.
- Joseph Guiltinan, 2010. "Consumer durables replacement decision-making: An overview and research agenda," Marketing Letters, Springer, vol. 21(2), pages 163-174, June.
- Chen, Zhen-Yu & Fan, Zhi-Ping & Sun, Minghe, 2012. "A hierarchical multiple kernel support vector machine for customer churn prediction using longitudinal behavioral data," European Journal of Operational Research, Elsevier, vol. 223(2), pages 461-472.
- D. F. Benoit & D. Van Den Poel, 2009. "Benefits of Quantile Regression for the Analysis of Customer Lifetime Value in a Contractual Setting: An Application in Financial Services," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 09/551, Ghent University, Faculty of Economics and Business Administration.
- Alineamiento de secuencias in Wikipedia (Spanish)
- Dizi hizalaması in Wikipedia (Turkish)
- User:Webridge/我的沙盘/2 in Wikipedia (Chinese)
- Sequence alignment in Wikipedia (English)
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nathalie Verhaeghe).
If references are entirely missing, you can add them using this form.