A Probabilistic Model of Brand Choice Incorporating Purchase Reinforcement and Variety Seeking Behavior

Unlike prior marketing literature which categorize consumers as exhibiting either “variety seeking” or “inertia” buying behavior, our model allows a consumer to exhibit both these tendencies at different points in time. The model assigns probabilities to consumers of being in either an inertia or a stimuli-seeking state. Brand choice is then modeled conditionally on being in either of these two buying states. A unique feature of our model is that it distinguishes between a consumer's inertia buying behavior and brand loyalty. The model is tested in two frequently purchased product categories and is shown to significantly outperform reference models in explaining choice behavior.