Consumers' Extent of Evaluation in Brand Choice

Abstract

Brand choice models implicitly assume that consumers incorporate all relevant marketing information such as price, display, and feature for key brands on each purchase occasion. We examine whether consumers actively evaluate the brands on every occasion. We propose a multistate choice model with varying levels of evaluation and estimate the model with scanner data. In addition, we study the effect of household demographics, occasion-specific factors, as well as unmeasured household and purchase occasion factors on the extent of evaluation. The results indicate that consumers do not evaluate brands on all occasions. We discuss the implications of such limited evaluation.

JEL Classification: L11, M31