Heterogeneous Consumer Groups Research Articles

Identification of Heterogeneous Consumer Groups in Insurance Markets: Latent Class Analysis

Identification of Heterogeneous Consumer Groups in Insurance Markets: Latent Class Analysis

What Are the Differences of Luxury Goods Purchasing Behaviors of Hetero- Geneous Consumer Groups?

In today's world, many scholars have begun to research the different benefits that luxury goods bring to society. Although luxury goods research-only appeared in the last hundred years, it has an absolute voice in today's trend circle and even involves other industries. However, few people have researched the impact of different people's characteristics on luxury consumption, so I choose to research the difference in luxury purchase behaviors among heterogeneous groups. I believe this research will provide a clear picture of how this difference arises and what the implications are. This research provides empirical evidence for the differences of the luxury goods purchasing from heterogeneous consumer groups. This model could be applied to empirical studies of Economics and Sociology. In practice, the empirical findings from some surveys, data research and some expertise provide convincing evidence for the reliability of the model. It can be used that people with different characteristics have different purposes when acquiring luxury goods. Although there are some limitations in the current study, the findings could give researchers and practitioners suggestions to the impact of population heterogeneity on luxury purchases. Specifically, this study demon st-rates that gender, age, personal or family income, job content and local development level will all influence people's different opinions on luxury brands, so they have different purposes for using luxury goods in China.

Blazing the Trail: Considering Browsing Path Dependence in Online Service Response Strategy

Competition on e-commerce platforms is becoming increasingly fierce, due to the ease of online searching for comparing products and services. We examine how the sequential browsing behavior of consumers can enable targeted marketing strategies on e-commerce platforms, by using clickstream data from one of the largest e-commerce platforms in Asia. We deploy duration analysis to i) explore how path dependence can better explain consumers’ sequential browsing behavior in different product categories, and ii) characterize the sequential browsing behavior of heterogeneous consumer groups. The findings of our work showcase i) the high accuracy of using sequential browsing path dependence to explain consumer behavior, ii) the patterns of their behavioral intentions and iii) the spell of the behavior of heterogeneous consumer groups. Our findings provide nuanced implications for strategically managing branding, marketing, and customer relations on e-commerce platforms. We discuss the implications of our findings for both research and practice, and we delineate an agenda for future research on the topic.

Brand Morphogenesis: The Role of Heterogeneous Consumer Sub-Assemblages in the Change and Continuity of a Brand

Abstract How do brands change in environments defined by increasing consumer heterogeneity? Drawing on assemblage theory, this research develops the concepts of brand morphogenesis and consumer sub-assemblage to explain how heterogeneous consumer groups instigate, reinforce and hinder the evolution of a brand. This longitudinal case study of a Swedish fashion brand delineates the role of heterogeneous consumer sub-assemblages in the continual process of emergence and transformation of a brand assemblage through space and time—a process defined as brand morphogenesis. The findings detail brand morphogenesis in the sub-assemblage dynamics of exploration, actualization, and habituation of value, as heterogeneous consumer groups form consumer sub-assemblages in interaction with other brand components and interact in patterns of coexisting with, coopting, and contesting other sub-assemblages. By charting consumers’ value negotiations as they play out within and among consumer sub-assemblages, this research contributes to understanding continuity and change for brands that face increasing consumer heterogeneity.

An Informatics Framework to Assess Consumer Health Language Complexity Differences: Proof-of-Concept Study.

BackgroundThe language gap between health consumers and health professionals has been long recognized as the main hindrance to effective health information comprehension. Although providing health information access in consumer health language (CHL) is widely accepted as the solution to the problem, health consumers are found to have varying health language preferences and proficiencies. To simplify health documents for heterogeneous consumer groups, it is important to quantify how CHLs are different in terms of complexity among various consumer groups.ObjectiveThis study aimed to propose an informatics framework (consumer health language complexity [CHELC]) to assess the complexity differences of CHL using syntax-level, text-level, term-level, and semantic-level complexity metrics. Specifically, we identified 8 language complexity metrics validated in previous literature and combined them into a 4-faceted framework. Through a rank-based algorithm, we developed unifying scores (CHELC scores [CHELCS]) to quantify syntax-level, text-level, term-level, semantic-level, and overall CHL complexity. We applied CHELCS to compare posts of each individual on online health forums designed for (1) the general public, (2) deaf and hearing-impaired people, and (3) people with autism spectrum disorder (ASD).MethodsWe examined posts with more than 4 sentences of each user from 3 health forums to understand CHL complexity differences among these groups: 12,560 posts from 3756 users in Yahoo! Answers, 25,545 posts from 1623 users in AllDeaf, and 26,484 posts from 2751 users in Wrong Planet. We calculated CHELCS for each user and compared the scores of 3 user groups (ie, deaf and hearing-impaired people, people with ASD, and the public) through 2-sample Kolmogorov-Smirnov tests and analysis of covariance tests.ResultsThe results suggest that users in the public forum used more complex CHL, particularly more diverse semantics and more complex health terms compared with users in the ASD and deaf and hearing-impaired user forums. However, between the latter 2 groups, people with ASD used more complex words, and deaf and hearing-impaired users used more complex syntax.ConclusionsOur results show that the users in 3 online forums had significantly different CHL complexities in different facets. The proposed framework and detailed measurements help to quantify these CHL complexity differences comprehensively. The results emphasize the importance of tailoring health-related content for different consumer groups with varying CHL complexities.

Discovering heterogeneous consumer groups from sales transaction data

We propose a demand estimation method to discover heterogeneous consumer groups. The estimation requires only historical sales data and product availability. Consumers belonging to different segments possess heterogeneous preferences and, in turn, heterogeneous substitution behaviors. For such consumers, the latent class consumer choice model can better represent their heterogeneous purchasing behaviors. In the latent class choice model, there are multiple consumer segments, and the segment types are not observable to the retailer. The expectation-maximization (EM) method is developed to jointly estimate the arrival rate and the parameters of the choice model. The developed method enables a simple estimation procedure by treating the observed data as incomplete observations of the consumer type along with consumer’s first choice. The first choice is the choice before the substitution effects occur. We test the procedure on simulated data sets. The results show that the procedure effectively detects heterogeneous consumer segments that have significant market presence.

Paradigm shifts in Indian retail - trends and prospects

This paper studies the following concepts: Indian retail industry, its present trends and future scenarios. The planned retail outlets in growing cities in India have important pipelines and such metros are satisfactorily large and divert to accommodate a huge variety of new ordered layouts. The cities categorised as developing and emerging have chances of large development in organised retailing due to the quickly changing economic and market situation, which is well explained in the study. The study on retail business practices expresses the factors that lead to a deviation in the retail segment is because of the presence of heterogeneous groups of consumers with varying buying power, their value consciousness, and entry of new brands in the Indian markets and availability of Indian-based retailers with aggressive and ambitious expansion plans. While concluding the study it is seen that there occurs a large number of global retailers who are interested to the entire Indian market with favourable government policies and emerging technologies already in place looks promising enough for the growth of the retail sector.

Target groups for fish from aquaculture: Consumer segmentation based on sustainability attributes and country of origin

Sustainable food products have become significantly more important over the last decades. One example is the constant growth in the market for organic food. However, market shares for sustainable aquaculture products remain small. Parallel to emerging markets for sustainable foods, consumers' interest in the geographical origin, in particular domestic and local food production evolved. The aim of this paper was to elicit target groups for fish from sustainable aquaculture and their preferences for different countries of origin. Choice experiments and structured interviews were conducted with 447 German consumers of fish to analyze heterogeneous consumer groups. The results of latent class modelling yielded five target groups. One consumer segment (19%) was predominantly considering sustainability labels and claims on production criteria, i.e. ‘production in natural ponds’ and ‘sustainably produced’. The largest consumer segment (39%) placed highest importance on the COO while sustainability labels and claims had a positive but much weaker impact. Yet, another consumer segment (20%) gave the country of origin priority over all other attributes. Two more classes based their choice primarily on price, with one class preferring premium prices and the other class low prices. Marketers of sustainable aquaculture products are advised to source products from countries of origin that consumers prefer, and prominently declare the country of origin. For reaching new target groups, certified sustainable producers should not only rely on their label. It is recommended to focus on production criteria of consumer interest, for example the production in natural ponds, and state these on the product package.

Improving the behavioral realism of global integrated assessment models: An application to consumers’ vehicle choices

A large body of transport sector-focused research recognizes the complexity of human behavior in relation to mobility. Yet, global integrated assessment models (IAMs), which are widely used to evaluate the costs, potentials, and consequences of different greenhouse gas emission trajectories over the medium-to-long term, typically represent behavior and the end use of energy as a simple rational choice between available alternatives, even though abundant empirical evidence shows that real-world decision making is more complex and less routinely rational. This paper demonstrates the value of incorporating certain features of consumer behavior in IAMs, focusing on light-duty vehicle (LDV) purchase decisions. An innovative model formulation is developed to represent heterogeneous consumer groups with varying preferences for vehicle novelty, range, refueling/recharging availability, and variety. The formulation is then implemented in the transport module of MESSAGE-Transport, a global IAM, although it also has the generic flexibility to be applied in energy-economy models with varying set-ups. Comparison of conventional and ‘behaviorally-realistic’ model runs with respect to vehicle purchase decisions shows that consumer preferences may slow down the transition to alternative fuel (low-carbon) vehicles. Consequently, stronger price-based incentives and/or non-price based measures may be needed to transform the global fleet of passenger vehicles, at least in the initial market phases of novel alternatives. Otherwise, the mitigation burden borne by other transport sub-sectors and other energy sectors could be higher than previously estimated. More generally, capturing behavioral features of energy consumers in global IAMs increases their usefulness to policy makers by allowing a more realistic assessment of a more diverse suite of policies.

The effect of coal combustion byproducts on price discrimination by upstream industries

Price discrimination is often difficult to disentangle from price dispersion due to a lack of transaction level data capable of tracking sales from individual companies to quantifiably heterogeneous groups of consumers. This paper uses mine-mouth prices and transportation prices paid by regulated coal-fired power plants in the U.S. coal market during the time period 2009–2010 to study how coal mines and transportation companies practice price discrimination against electricity plants. Power plants with heterogeneous demand for coal are perfectly identified based upon their ability to market flue-gas desulfurization (FGD) gypsum, which is a byproduct produced from scrubbing SO2 emissions. Because sulfur is the raw material for FGD gypsum byproduct production, gypsum sellers are anticipated to have a more inelastic demand for high-sulfur coal. Results indicate that coal mines and transporters charge higher prices to gypsum sellers in comparison to non-sellers for transactions originating at the same mine during the same month of the same year. Coal-fired power plants capable of selling FGD gypsum byproducts are estimated to pay a 10.3–39.6¢/MMBtu price premium for coal. Coal mines and transportation companies each capture a relatively equal share of the associated rents.

Optimal Timing of Sequential Distribution: The Impact of Congestion Externalities and Day-and-Date Strategies

The window between a film’s theatrical and video releases has been steadily declining with some studios now testing day-and-date strategies (i.e., when a film is released across multiple channels at once). We present a model of consumer choice that examines trade-offs between substitutable products (theatrical and video forms), the possibility of purchasing both alternatives, a congestion externality affecting consumption at theaters with heterogeneous consumer groups, and a decay in the quality of the content over time. Our model permits a normative study of the impact of shorter release windows (zero–three months) for which there is a scarcity of relevant data. We characterize the market conditions under which a studio makes video release time and price selections indicative of direct-to-video, day-and-date, and delayed video release tactics. During seasons of peak congestion, we establish that day-and-date strategies are optimal for high-quality films with high content durability (i.e., films whose content tends to lead consumers to purchase both alternatives) whereas prices are set to perfectly segment the consumer market for films with low content durability. We find that lower congestion effects provide studios with incentives to delay release and price the video to induce multiple purchasing behavior for films with higher content durability. However, an increase in congestion effects can, in certain cases, actually lead to higher studio profitability. We also show that, at the lower range of quality, an increase in movie quality should often be accompanied by a later video release time. Surprisingly, however, we observe the opposite result at the upper range of movie quality: an increase in quality can justify an earlier release of the video.

The Effect of Coal Combustion Byproducts on the Pricing Strategy of Upstream Industries

Price discrimination is often difficult to disentangle from price dispersion due to a lack of transaction level data capable of tracking sales from individual companies to quantifiably heterogeneous groups of consumers. This paper uses coal mine-mouth prices and transportation prices paid by regulated coal-fired power plants in the U.S. coal market during the time period 2008-2010 to study how coal mines and transportation companies practice price discrimination against electricity plants. Power plants with heterogeneous demand for coal are perfectly identified based upon their ability to market flue gas desulfurization (FGD) gypsum, which is a byproduct produced from scrubbing SO2 emissions. Because sulfur is the raw material for FGD gypsum byproduct production, gypsum sellers are anticipated to have a more inelastic demand for high sulfur coal. Results indicate that individual coal mines charges different marginal prices to gypsum sellers in comparison to non-sellers on the basis of coal quality for transactions occurring during the same month of the same year. Coal-fired power plants capable of selling FGD gypsum byproducts are estimated to pay an 8.8 ¢/MMBtu marginal price premium for a 1 percentage point increase in average sulfur content. Partitioning mines into high sulfur and low sulfur mine types reveals that high sulfur mines charge a 21.2 ¢/MMBtu (8.4%) total price premium to gypsum sellers and low sulfur mines offer a 9.5 ¢/MMBtu (3.8%) total price discount to gypsum sellers. Coal mines are estimated to capture the largest share of the aforementioned rents from price discrimination (71% to 98%), and the remaining accrues to coal transporters.

Good news, bad news, consumer sentiment and consumption behavior

We explore the reaction of heterogenous consumers to a range of financial and economic news and find asymmetry in the response to news where consumers react to bad news but not to good news. This asymmetry holds uniformly across heterogeneous consumer groups and is consistent with the popular negativity bias in psychology. We find asymmetric mapping from news to consumer sentiment and from consumer sentiment to aggregate consumption that supports the notion of asymmetric consumption behavior.

Should Public Sectors Be Complements of Private Sectors?

We discuss competition between high-quality private service providers that maximize their own profits and a low-quality public service provider that maximizes social surplus. Two heterogeneous consumer groups exist: those who demand only high-quality services and those who care little whether services are high- or low-quality. The setting reflects the fact that some consumers feel dissatisfaction with public service providers. We show that, under certain conditions, social welfare is smaller when there is a public service provider than when there is not. The result holds even though the efficiency of the public service is equal to that of the private services.

The Existence of Low-End Firms May Help High-End Firms

Two models of competition between high-end and low-end products benefiting the high-end firms are presented. One is a quantity competition model, and the other is a price competition model with product differentiation. The key factor is the existence of two heterogeneous consumer groups: those who demand only high-end (name-brand) products and those who care little whether products are high or low end. We show that, under certain conditions, the profits of firms in the high-end market are larger when there are firms producing low-end products than when there are not. The existence of price-sensitive consumers who care little about product quality intensifies competition among the high-end firms. The existence of low-end firms functions as a credible threat, which induces the high-end firms not to overproduce because price-sensitive consumers buy products from the low-end firms. The result provides a new theoretical mechanism concerning the profitability and pricing of national brand firms after the entry of private labels. It has an implication for pricing and marketing strategies: Established firms should not decrease their prices after the entry of nonestablished firms.

Sale or Lease? Durable-Goods Monopoly with Network Effects

This paper studies the pricing problem of a durable-goods monopolist. It finds that contrary to the existing literature, profits from selling durable goods might be higher than from leasing when the products exhibit network effects. Under the influence of network effects, there exist multiple self-fulfilling equilibria that would sustain different network sizes at the same price. By using the assumption that consumers are cautious about network growth, we find that consumption externalities among heterogeneous groups of consumers generate a discontinuous demand function, which requires a lessor to offer a low price if she wants to reach the mass market. In contrast, a seller enjoys a relative advantage in that she can build a customer base by setting a lower initial price and raise the price later in the mass market. Our finding that selling can be more profitable than leasing holds when consumers are more cautious about the prospect of the product's success, which might be the case if, for example, the technology or manufacturer is relatively unknown.

To What Degree Does Provider Performance Affect a Quality Indicator? The Case of Nursing Homes and ADL Change

This research investigates what factors affect the degree to which nursing home performance explains variance in residents' change in status of activities of daily living (ADL) after admission. The database included all residents admitted in 2002 to a 10% random sample of nursing homes in the United States. Longitudinal analyses of outcomes at 3 months after admission test the ability of individual characteristics and nursing home identifiers to explain variance in ADL change for different groups of residents. As we compared the best and worst providers (top 20% vs bottom 20%, then 10%, then 5%) and we restricted analyses to more homogeneous groups of residents, we found that more of the variance in ADL change was attributable to provider performance. Cognitive function and race also affected the degree to which home performance had an impact on outcomes. The results imply that some quality indicators may be most useful in distinguishing between nursing homes that provide the best or the worst care. Futhermore, the degree to which a quality indicator is driven by a nursing home's performance may vary considerably, depending on the characteristics of the consumer. These findings raise questions about the usefulness of performance measures that focus on heterogeneous groups of consumers or entire provider populations. "How much of the variance in a quality indicator does provider performance explain?" is an issue we think has not received the attention it deserves in current discussions of performance-measurement strategies and pay-for-performance models.

TRADE IN USED GOODS AND DURABILITY CHOICE

This paper studies the issue of durability choice when there are heterogeneous groups of consumers in the market. The possibility of trade between consumers and its effects on durability choice are examined. It is shown that neither a competitive nor a monopolistic market realizes the social optimum globally. Swan's “independence result” does not hold, in general. [020]

Trade in Used Goods and Durability Choice

This paper studies the issue of durability choice when there are heterogeneous groups of consumers in the market. The possibility of trade between consumers and its effects on durability choice are examined. It is shown that neither a competitive nor a monopolistic market realizes the social optimum globally. Swan's “independence result” does not hold, in general. [020]