A Dynamic Choice Map Approach to Modeling Attribute-Level Varied Behavior Among Stockkeeping Units

Abstract

Because product development decisions are often made at the attribute level, brand managers need to understand the attribute-level competitive structure. At the same time, consumers may exhibit reinforcing behavior (i.e., high repeating) on some attributes and derived varied behavior (i.e., high switching) on other attributes. This calls for the extension of current stockkeeping unit choice models to consider attribute-level feedback effects. The authors develop such a model using an internal market structure analysis approach. This provides the benefit of attribute-level competitive maps and estimates of attribute-level reinforcing behavior versus derived varied behavior. The authors estimate the model in the pourable salad dressing category. The fit is better than current models of stockkeeping unit choice, both in the estimation sample and in the validation sample. The authors discuss implications for researchers and practitioners.