Consumer purchase behaviors associated with active and passive deal-proneness

Abstract

This research infers deal-proneness using a condition-act choice model estimated at the household level from panel data. Two dimensions of deal-proneness emerge: active and passive. Active deal-proneness is defined as sensitivity to features and coupons; “active” refers to the relatively intensive search required to locate these types of promotions. Passive deal-proneness is defined as sensitivity to in-store displays, which refers to search that may be limited to the store environment. We develop and test hypotheses regarding the distribution of the two types of deal-proneness in our population, as well as correlational hypotheses on the association between a consumer's deal-proneness and purchase behavior. Purchase behaviors of interest include brand choice set size, purchase quantity, and purchase timing. Hypothesis testing reveals several associations. The number of brands purchased only on deal, for example, increases with increases in a consumer's feature sensitivity but is unrelated to display sensitivity.