Recovering stockkeeping-unit-level preferences and response sensitivities from market share models estimated on item aggregates

Bell, David R., Bonfrer, André and Chintagunta, Pradeep K. (2005) Recovering stockkeeping-unit-level preferences and response sensitivities from market share models estimated on item aggregates. Journal of Marketing Research, 42 2: 169-182. doi:10.1509/jmkr.42.2.169.62294


Author Bell, David R.
Bonfrer, André
Chintagunta, Pradeep K.
Title Recovering stockkeeping-unit-level preferences and response sensitivities from market share models estimated on item aggregates
Journal name Journal of Marketing Research   Check publisher's open access policy
ISSN 0022-2437
Publication date 2005
Sub-type Article (original research)
DOI 10.1509/jmkr.42.2.169.62294
Open Access Status Not Open Access
Volume 42
Issue 2
Start page 169
End page 182
Total pages 14
Place of publication Chicago, IL, United States
Publisher American Marketing Association
Language eng
Abstract The authors propose a new approach to obtaining stockkeeping-unit (SKU)-level preferences and response sensitivities. The authors distinguish an attribute-level model, in which the unit of analysis is the market share for an alternative created by aggregation (e.g., Colgate toothpaste), from a truly disaggregate SKU-level model, and they establish an analytical relationship between parameters that they obtain from the two models. The authors show that SKU-level parameters can be recovered by calculation from estimated attribute-level parameters, circumventing the need for direct estimation of the more complex SKU-level model. They calibrate the store data market share model using 98 weeks of data for ten brands and 168 SKUs of toothpaste. Rather than estimate 168 preference parameters (when there is an “outside” alternative in addition to the 168 “inside” ones), it is only necessary to estimate ten brand-preference parameters from which the 168 parameters can be computed, as long as share and marketing-mix data are available at the SKU level. Covariate effects, such as marketing-mix response parameters, can be recovered in a similar fashion. Holdout tests demonstrate superior predictive performance, and the authors discuss implications for the derivation of elasticities for new SKU introductions.
Keyword Econometric models
Product attributes
Stockkeeping unit
Price elasticity
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Article (original research)
Collection: UQ Business School Publications
 
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Created: Thu, 24 Sep 2015, 11:08:20 EST by Karen Morgan on behalf of UQ Business School