Modeling Consumers’ Choices of Multiple Items

Abstract

Contemporary choice models focus on choice opportunities in which consumers purchase a quantity of a single item in a product category. However, failing to recognize the possibility of assortments of multiple-Item purchases can lead to incorrect conclusions about the impact of past purchase behavior on current choices. The authors propose a model that allows for multiple-item shopping trips and apply it to scanner data for powdered soft drinks. The model provides descriptions about the influence of (1) consumer's prior behavior across previous shopping trips, (2) behavior within the same shopping trip, (3) the in-store shelf assortment available at the time of purchase, and (4) marketing mix variables on multiple-item shopping trip choices. The authors’ model provides better choice predictions in a holdout sample at the aggregate and assortment composition levels than a traditional, single-purchase choice model. Using the model, they present simulation and naturally occurring experiment results in the powdered soft drinks category. Finally, they discuss the value of their results for understanding the consequences of consumers’ choices and their implications for manufacturers.