Publication:

The use of a retail store database for brand choice analysis

Retailers who wish to make decisions for a single store and have access to the scanner data of all purchases and to the scanner data of customer card-holders may worry about erroneous inferences when using one of the two databases and when using the same models to estimate the effects of their main marketing variables. The questions are: 'do the transactions reflected by the customer cards necessarily reflect the usual purchase behavior of all customers?'; and 'do the same customer response models apply equally to regular customers and for the rest of individuals shopping at the store?'. To answer these questions, a brand choice multinomial logit model choice is applied for the product category chosen (ground coffee). The major findings are that regular price elasticity of all brands in the customer segment is twice what was estimated when studying the total purchases. The effects on brand and type of coffee are greater in the customer card-holders segment than in the total purchases.