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Investigating the Drivers of Consumer Cross-Category Learning for New Products Using Multiple Data Sets

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  • Karthik Sridhar

    () (Dauch College of Business and Economics, Ashland University, Ashland, Ohio 44805)

  • Ram Bezawada

    () (School of Management, State University of New York at Buffalo, Buffalo, New York 14260)

  • Minakshi Trivedi

    () (School of Management, State University of New York at Buffalo, Buffalo, New York 14260)

Abstract

Consumer new product adoption and preference evolution or learning may be influenced by intrinsic or internal factors (e.g., usage experiences, personal characteristics), external influences (e.g., social effects, media), and marketing activities of the firm. Moreover, the preference evolution in a certain category can spill over to other categories; i.e., consumers can exhibit cross-category learning. In this paper, we develop a multicategory framework to analyze the role of the above elements in the formation and evolution of consumer preferences across categories. We analyze these elements by employing multiple data sets, i.e., by combining revealed preference data (from scanner panel), stated data (from surveys measuring consumer lifestyle variables and demographics), and external influences (e.g., media mentions) in a completely heterogeneous framework while considering other facets of the learning process. By jointly estimating the model for organic purchases in six distinct food categories, we also explore the role of category differences. Results show that consumer new product adoption and learning is indeed impacted significantly and to various degrees by the aforementioned factors. We show how, by selectively encouraging purchases under various scenarios, firms can accelerate the learning process, not only for the focal category but also for other categories, thereby realizing considerable incremental profits. These results can be used by both manufacturers and retailers for more efficient allocation of marketing budgets across (new) products.

Suggested Citation

  • Karthik Sridhar & Ram Bezawada & Minakshi Trivedi, 2012. "Investigating the Drivers of Consumer Cross-Category Learning for New Products Using Multiple Data Sets," Marketing Science, INFORMS, vol. 31(4), pages 668-688, July.
  • Handle: RePEc:inm:ormksc:v:31:y:2012:i:4:p:668-688
    DOI: 10.1287/mksc.1120.0717
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    File URL: http://dx.doi.org/10.1287/mksc.1120.0717
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    Cited by:

    1. Trivedi, Minakshi & Sridhar, Karthik & Kumar, Ashish, 2016. "Impact of Healthy Alternatives on Consumer Choice: A Balancing Act," Journal of Retailing, Elsevier, vol. 92(1), pages 65-82.
    2. Andrew T. Ching & Tülin Erdem & Michael P. Keane, 2013. "Learning Models: An Assessment of Progress, Challenges and New Developments," Economics Papers 2013-W07, Economics Group, Nuffield College, University of Oxford.
    3. Jessica Aschemann-Witzel & Stephan Zielke, 2017. "Can't Buy Me Green? A Review of Consumer Perceptions of and Behavior Toward the Price of Organic Food," Journal of Consumer Affairs, Wiley Blackwell, vol. 51(1), pages 211-251, March.
    4. Müller, Sven & Wilhelm, Pascal & Haase, Knut, 2013. "Spatial dependencies and spatial drift in public transport seasonal ticket revenue data," Journal of Retailing and Consumer Services, Elsevier, vol. 20(3), pages 334-348.
    5. Son, Jungmin & Kim, Jikyung (Jeanne) & Choi, Jeonghye & Kim, Mingyung, 2017. "Linking online niche sales to offline brand conditions," Journal of Business Research, Elsevier, vol. 70(C), pages 74-84.
    6. Deng, Ziliang & Wang, Zeyu, 2016. "Early-mover advantages at cross-border business-to-business e-commerce portals," Journal of Business Research, Elsevier, vol. 69(12), pages 6002-6011.
    7. Andrew T. Ching & Tülin Erdem & Michael P. Keane, 2013. "Invited Paper ---Learning Models: An Assessment of Progress, Challenges, and New Developments," Marketing Science, INFORMS, vol. 32(6), pages 913-938, November.
    8. Xu, Yan, 2017. "Essays on preference formation and home production," Other publications TiSEM b028fd7e-53ba-4ff6-97eb-4, Tilburg University, School of Economics and Management.
    9. Hans Jørn Juhl & Morten H. J. Fenger & John Thøgersen, 2017. "Will the Consistent Organic Food Consumer Step Forward? An Empirical Analysis," Journal of Consumer Research, Oxford University Press, vol. 44(3), pages 519-535.

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