On some analytical approaches to the study of consumer brand-switching behavior

The purpose of this research is to analyse, discuss and extend the analytical methodology associated with the study of consumer brand-switching behavior. As such, it attempts to add to the existing understanding of the structure of the consumer brand choice process. Rational human behavior may be viewed as a succession of choices made among more or less well defined alternatives. The problem we analyse in this study is how to predict these choices when the alternatives are fixed in advance. The alternatives considered in this study are low-cost, frequently purchased, brand identified consumer products. The unit of analysis is the individual consumer. Stochastic models of brand choice are developed and used as constructs for organizing and interpreting brand choice data. These models are subsequently used to test specific hypotheses about brand loyalty (the tendency for consumers to hold a favorable attitude toward - and concentrate their purchases on - a particular brand) and brand-switching (the tendency for consumers to purchase more than one brand over a period of time). In this respect, this dissertation follows the framework of earlier brand choice studies. In many dimensions, however, this research is significantly different from most stochastic models of brand-switching behavior developed in the past. First, this research deals essentially with multi-brand switching behavior as oppose to mere brand loyalty. By collapsing the market into an artificial two-brand market (to achieve mathematical tractability), earlier researchers were forced to concentrate on repeat purchase behavior only. All the information about brand switching activity was lost in the aggregation process. In today's differentiated markets, the competition has to be monitored on a brand-by-brand basis, and this is best achieved through the use of models that deal explicitly with multibrand switching, such as the one developed in this study. Second, this research views consumer brand choice behavior as both a cognitive and a stochastic process. A multi-dimensionally scaled configuration is used as a specification of consumers' cognitive structures. Perceptual distances derived from this configuration are then related to brand choice and brand-switching probabilities through a model that takes into account the constraints imposed on the various probabilities. The empirical results demonstrate that perceptions, preferences and cognitive structures are indeed significant determinants of consumer brand-switching behavior.Business, Sauder School ofGraduat