Consumer Brand Choice: Money Allocation as a Function of Brand Reinforcing Attributes

Abstract

Previous applications of the matching law to the analysis of consumer brand choice have shown that the amount of money spent purchasing a favorite brand tends to match the quantity bought of the favorite brand divided by the quantity bought of all other brands. Although these results suggest matching between spending and purchased quantity, branded goods differ qualitatively among themselves, rendering previous matching analyses incomplete. Consumer panel data containing information about more than 1,500 British consumers purchasing four grocery product categories (baked beans, biscuits, fruit juice, and yellow fats) during 52 weeks were analyzed. All the brands purchased were classified according to the level of informational and utilitarian reinforcement they were programmed to offer. An adaptation of the generalized matching law was adopted, in which the amount of money spent was a power function of the quantity bought, informational level of the brand bought, utilitarian level of the brand bought, and a measure of price promotion.

KEYWORDS:

• brand choice
• matching
• behavioral economics
• consumer behavior analysis
• Behavioral Perspective Model

Jorge M. Oliveira-Castro is grateful for financial support received from CAPES (BEX3510/05-0, Brazil) and CNPq (305295, Brazil).