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Variety Seeking, Purchase Timing, and the "Lightning Bolt" Brand Choice Model

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  • Pradeep K. Chintagunta

    (Graduate School of Business, Department of Marketing, University of Chicago, 1101 East 58th Street, Chicago, Illinois 60637)

Abstract

The "Lightning Bolt" (LB) model provides a comprehensive framework for accommodating the effects of habit persistence, unobserved heterogeneity, and state dependence on household brand choice behavior. This paper presents a discrete, dynamic brand-choice model that belongs to the LB class of models. We propose a method for incorporating the effects of variety seeking into the LB model formulation. The proposed formulation explicitly links brand choice and purchase timing behavior via the effect of state dependence. This state-dependence based linkage between brand choice and purchase timing comes about due to the attribute satiation notion associated with household variety seeking behavior. Empirical implementation of the model specification requires recognizing that interpurchase times, like brand choices, also depend upon marketing variables and household characteristics. A hazard model is specified to capture this relationship. Empirical results are presented using household-level data for two different products. Our results reveal the following. (1) State dependence effects decline over time. Hence, households' brand switching and repeat purchase probabilities vary over time, independent of any variation in marketing mix activities. (2) Accounting for the effects of marketing variables on interpurchase times may be important when empirically estimating the proposed model. While the nature of substantive implications is largely unchanged, the magnitudes of the different effects are nevertheless affected. (3) We find evidence for purchase reinforcement (and its effects declining over time), but no evidence for attribute satiation based variety seeking behavior. (4) A comparison of the model's predictive ability with those from two extant specifications reveals that the proposed model outperforms rival specifications.

Suggested Citation

  • Pradeep K. Chintagunta, 1999. "Variety Seeking, Purchase Timing, and the "Lightning Bolt" Brand Choice Model," Management Science, INFORMS, vol. 45(4), pages 486-498, April.
  • Handle: RePEc:inm:ormnsc:v:45:y:1999:i:4:p:486-498
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    File URL: http://dx.doi.org/10.1287/mnsc.45.4.486
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    References listed on IDEAS

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    1. Moshe Givon, 1984. "Variety Seeking Through Brand Switching," Marketing Science, INFORMS, vol. 3(1), pages 1-22.
    2. 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.
    3. Rishin Roy & Pradeep K. Chintagunta & Sudeep Haldar, 1996. "A Framework for Investigating Habits, “The Hand of the Past,” and Heterogeneity in Dynamic Brand Choice," Marketing Science, INFORMS, vol. 15(3), pages 280-299.
    4. Terry Elrod, 1988. "Choice Map: Inferring a Product-Market Map from Panel Data," Marketing Science, INFORMS, vol. 7(1), pages 21-40.
    5. Tülin Erdem, 1996. "A Dynamic Analysis of Market Structure Based on Panel Data," Marketing Science, INFORMS, vol. 15(4), pages 359-378.
    6. Peter M. Guadagni & John D. C. Little, 1983. "A Logit Model of Brand Choice Calibrated on Scanner Data," Marketing Science, INFORMS, vol. 2(3), pages 203-238.
    7. McAlister, Leigh & Pessemier, Edgar, 1982. " Variety Seeking Behavior: An Interdisciplinary Review," Journal of Consumer Research, Oxford University Press, vol. 9(3), pages 311-322, December.
    8. Frank M. Bass & Abel Jeuland & Gordon P. Wright, 1976. "Equilibrium Stochastic Choice and Market Penetration Theories: Derivations and Comparisons," Management Science, INFORMS, vol. 22(10), pages 1051-1063, June.
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    Citations

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    Cited by:

    1. Stephen Ryan & Catherine Tucker, 2012. "Heterogeneity and the dynamics of technology adoption," Quantitative Marketing and Economics (QME), Springer, vol. 10(1), pages 63-109, March.
    2. repec:eee:ijrema:v:28:y:2011:i:4:p:281-294 is not listed on IDEAS
    3. Nanarpuzha, Rajesh, 2013. "Modeling Situational Factors in Variety Seeking Behaviour: An Extension of the Lightning Bolt Model," IIMA Working Papers WP2013-12-04, Indian Institute of Management Ahmedabad, Research and Publication Department.
    4. repec:eee:ijrema:v:31:y:2014:i:3:p:266-279 is not listed on IDEAS
    5. González-Benito, Óscar, 2004. "Random effects choice models: seeking latent predisposition segments in the context of retail store format selection," Omega, Elsevier, vol. 32(2), pages 167-177, April.
    6. Luc Wathieu, 2004. "Consumer Habituation," Management Science, INFORMS, vol. 50(5), pages 587-596, May.
    7. Matthew Osborne, 2011. "Consumer learning, switching costs, and heterogeneity: A structural examination," Quantitative Marketing and Economics (QME), Springer, vol. 9(1), pages 25-70, March.
    8. Desai, Kalpesh Kaushik & Trivedi, Minakshi, 2014. "Do consumer perceptions matter in measuring choice variety and variety seeking?," Journal of Business Research, Elsevier, vol. 67(1), pages 2786-2792.

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