문상길 교수 ( 노스캐롤라이나 주립대학 , 마케팅 ) 일시 : 2007 년 6 월 18...

문상길 교수 ( 노스캐롤라이나 주립대학 , 마케팅 )

일시 : 2007 년 6 월 18 일 ( 월 ) 13:00~15:00 장소 : 경상대학 국제회의실

주관 : 경북대학교 BK21 사업단 ( 지역혁신을 위한 창의형 디지털 경영인재 양성 사업단 )

경북대학교 경제경영연구소

경영 세미나

Variety Seeking & Consumer Choice

Modeling Level Changes in Dynamic Variety

Seeking: Multinomial Probit

Hidden Markov Brand Choice Model

Sangkil MoonNorth Carolina State University

Variety Seeking (VS):Peanut Butter

Monday:Peter PanCreamy

Tuesday:Jif

Crunchy

Wednesday:SkippyCreamy

Variety Seeking (VS):Movies

Weekend 1:Casino Royale

(Action)

Weekend 2:The 6th Sense

(Thriller)

Weekend 3:When Harry

Met Sally(Comedy)

Presentation Roadmap Research problem: tracking down

unobservedunobserved VS level changes Hidden Markov model (HMM) as a

solution model Model specification (hidden Markov

multinomial probit choice model) and estimation (MCMC)

Application• Peanut butter data

Anticipated contributions Project No.2: VS in hedonic goods

Variety Seeking (VS) and Choice

VS has an impact on choice in a seemingly random but inherently systematic way.

Since the pattern is not directly observable, tracking down VS is not straightforward.

Variety Seeking (VS) Literature

Brand-based VS• Changes in brand choices over

time (e.g., Peter Pan Jif Peter Pan in peanut butter)

• Does not specify the source of VS in terms of attributes (e.g., crunch vs. creamy in peanut butter).

Variety Seeking (VS) Literature

Attribute-based VS• Focus on VS changes in attributes (e.g.,

crunchy vs. creamy in peanut butter, “fruitness” in yogurt) (Trivedi, Bass & Rao 1994 MS; Erdem 1996 MS; Chintagunta 1999 Management Science)

• Consumers are more likely to switch between sensory attributes (e.g., flavor) than nonsensory attributes (e.g., brand) (Inman 2001 JCR).

Research Problem:Unobserved Variety Seeking Level

Changes

We can observe VS changes in brands or attributes within the same consumer given the consumer’s purchase history in the product category.• John’s Peanut butter history: Peter

Pan (PP, favorite brand) PP Jif PP Skippy PP


Changes

We don’t observe VS level changes that drive the consumer’s wants and needs for different brands or attributes.


Changes

Unobserved VS level changes • In the high VS level, consumers tend to try

something different from their favorite alternatives.(e.g.) I usually go to a Chinese restaurant for lunch. But, I want to eat something different today like pizza.

• In the low VS level, consumers tend to stick with their favorite alternatives.(e.g.) I’ll eat Chinese food today as usual.


Changes

Research Question?: Consumers are expected to react to price cuts or promotion more strongly in the high VS state (because they want to try something different from their favorites) than in the low VS state (because they tend to stick with their favorites).


Changes

Tracking down unobserved VS level unobserved VS level changeschanges can reveal an unobserved and inherent motivation for observed VS in terms of brands or alternatives.

No study has investigated the problem. The hidden Markov model (HMM) is an

effective tool to track down the unobserved VS level changes over time within the same consumer.

Why Hidden Markov Model (HMM)?Markov Chain

The Markov chain can detect transition probabilities between observed states.

(Table Example) States: rain

or no rain States are

observable.

Tomorrow rain

Tomorrow no rain

Todayrain

.3 .7

Today no rain

.1 .9

Why Hidden Markov Model (HMM)?Markov Chain

The Markov chain can detect transition probabilities between observed states.

(Table Example) States:

choice of different foods

States are observable.

Tomorrow Chinese food

Tomorrow other foods

TodayChinese food

.3 .7

Today other foods

.8 .2

Why Hidden Markov Model (HMM)?HiddenHidden Markov Model

What if states of interest are not directly observable?

(Table Example) States:

internal VS level (high vs. low)

States are unobservableunobservable.

Tomorrow high VS

Tomorrow low VS

Todayhigh VS

.2 .8

Today low VS

.6 .4

Why Hidden Markov Model (HMM)?HiddenHidden Markov Model

Unlike the Markov chain that deals with observed states, the HMM deals with a series of unobserved states (e.g. VS level) based on another series of relevant and observed states (e.g., brand choice).

Time 1 2 3 4 --- T

Brand choice (observed)

Jif Jif Skippy Jif --- Peter Pan

VS level (unobserved)

Low Low High Low --- High

Hidden Markov Model (HMM)in Literature

Traditional applications of HMM: • Automatic speech recognition (engineering) • Modeling incomplete DNA sequences (genomics)

Applications of HMM in marketing are relatively new but has been intensive for the past few years.• Montgomery et al. (2004, MS) to identify

unobservable goals driving web browsing behavior• Du & Kamakura (2006, JMR) to define household

purchase lifecycles as latent states• Moon, Kamakura & Ledolter (2007, JMR) to

estimate unobserved competitor promotions

Proposed Model: Hidden Markov Multinomial Probit

Choice Model

My proposed model has three components as follows:

1) Multinomial probit model component as a choice model,

2) HMM to track down consumers’ unobserved internal level of VS over time, and

3) Random coefficients model (hierarchical Bayesian model) to account for customer heterogeneity. In other words, VS level changes are investigated for each individual consumer.

Model Development:Hidden Markov Multinomial Probit

Choice Model

U hjt = hj + hVVhjt + hIIhjt + hP(s)ln(Phjt) + hF

(s)Fhjt +hD(s)Dhjt + hjt,

hJtthht 1 ~ iid N(0, )

)()()( ,,,,, shD

shF

shPhIhVhjh ~ iid N( , V) [regression parameters]

U = Utilityh = household; j = alternative (brand); t = time (purchase occasion)P = price; F = feature (ad); D = display


Choice Model




)()()( ,,,,, shD

shF


V = Variety SeekingReference Brand = brand purchased on last purchase occasion

(time = t-1)V(hjt) = 1 for reference brand j if Variety Seeking is in the High

state = -1 for the case j is not reference brand if Variety Seeking

is in the High state, and = 0 for all brands if Variety Seeking is in the Low state.


Choice Model




)()()( ,,,,, shD

shF


I = InertiaReference Brand = brand purchased on last purchase occasion

(time = t-1)I(hjt) = 1 for reference brand j if Variety Seeking is in the Low state = -1 for the case j is not reference brand if Variety Seeking is

in the Low state, and = 0 for all brands if Variety Seeking is in the High state.

Hidden Markov Multinomial Probit Choice Model

(2-State Transition Probabilities)

HH

LH

HL

LL

q

q

q

q

H

LHL

VSq )(

Q = transition probabilities between statesL = low VS stateH = high VS state

Model Estimation: MCMC The model will be estimated using

MCMC, which will have the following three components:1) Multinomial probit model

component,2) Hidden Markov model (HMM) (Kim

and Nelson 1999), and3) Hierarchical Bayesian structure.

Peanut Butter Data Grocery panel data (ERIM data)

from Professor Peter Rossi at University of Chicago.

Peanut butter has been used in prior VS research (Kahn, Kalwani, and Morrison 1986 JMR; Erdem 1996 MS)

Peanut Butter Data I selected households with 16+ purchases during

the data period (198505-198723, 2 years 19 weeks).• I selected top 52% cases.• 46,654 observations• 1,755 households

The whole period is divided into two periods:• Estimation period (198505 198704,

the first 2 full years, 40,078 observations, 1,755 households)

• Validation period (198705 198723, the last 19 weeks, 6,576 observations, 1,523 households).

Peanut Butter Data

Brand Brand Share

(%) Average Price

on Purchase (cents) Average Feature on Purchase (%)

Average Display on Purchase (%)

Peter Pan Creamy 13.5 178 6.8 4.3 Peter Pan Crunchy 7.9 178 6.7 4.2 Jif Creamy 16.6 183 2.0 1.0 Jif Crunchy 7.6 181 2.2 1.3 Skippy Creamy 15.1 181 3.3 1.8 Skippy Crunchy 11.1 181 3.3 1.6 Other Creamy 17.3 141 8.2 5.0 Other Crunchy 11.0 138 7.6 4.0

Anticipated Contributions Methodological contribution 1: first

application of HMM to VS. The proposed model captures unobserved VS level changes instead of the usual and observed VS in choice.

Methodological contribution 2: first model that combines HMM and multinomial probit model (+hierarchical Bayesian)

Substantive contribution: price/promotion sensitivity comparison between the high and low VS states

Project No. 2:Variety Seeking in Hedonic

Goods

Idea: empirical VS study in hedonic goods

There are a lot of behavioral studies but little empirical research on hedonic VS using a choice model.


Goods

Definition: Hedonic goods offer the experiences of fun, pleasure, or excitement.(e.g.) movies, music, designer clothers,

sports cars

Data: Empirically, netflix.com movie data are being used in the context of movie category choice (e.g., action, drama, comedy).


Goods Research Question: Consumer

satisfaction (consumers’ own movie ratings) and community opinions (community’s overall ratings) are important factors to influence choice but we don’ know under what conditions which factor has a bigger influence than the other one.


Goods This project specifies the conditions in

association with the VS level.• In the low VS state, consumer satisfaction

plays a bigger role because consumers rely on their own expertise when selecting movies from their favorite and familiar categories.

• In the high VS state, consumers are likely to explore less familiar categories, which will make them more reliant on community opinions.

NCSU 개요 설립 : 1887 년

위치 : North Carolina 주 , 랄리 (Raleigh)

학생수 : 29,957 명

교원수 : 1,825 명

총 연구지출 : $2.9 억

총 미국 연방정부 연구지원금 : $1.4 억

특허보유 : 500 건

NCSU 개요 단과대학 (10 개 ):

1. 농업생명과학 대학2. Design 대학3. 사범 대학4. 공대5. 자연자원 대학

NCSU 개요 단과대학 (10 개 ):

6. 인문사회 대학7. 경영 대학8. 물리수학 대학9. 섬유대학10. 수의대

NCSU Centennial Campus

대학 , 산업 , 정부 협동체 연구개발과 교육 기능 1,334 acre (540 만 제곱미터 ) 사무실 , 실험실 임대 현재 1,600 명의 산업 , 정부 직원과 1,350

명의 대학 교직원 근무 장래 12,500 명의 산업 , 정부 직원과 12,500

명의 대학 교직원 근무지로 확대 계획

NCSU 경영대학 학위 과정

회계학 석사 경영학 석사 (MBA) 경제학 석사 , 박사 농경제학 석사 학사 – 회계학 , 경영학 , 경제학

NCSU 경영대학 순위

MBA 51~75 위권 (US News & World Report)

학부 73 위 (US News & World Report) 학부 71 위 (BusinessWeek) 회계학 석사 : 20 위 (Public Account

Report) 회계학 학부 : 20 위 (Public Account

Report)

NCSU 경영대학

역사 1992 년 단대 설립 2002 년 MBA 과정 신설

교원 : 110 명

지역 한인 사회 살기 좋은 생활 환경

저렴한 생활 환경과 집값 최상의 고등교육 환경 – 3 개 주요 대학

(Duke, UNC, NCST) 양질의 초중등 교육 환경 낮은 범죄율 중규모 도시로서 쾌적한 생활 환경 ( 교통

혼잡이 별로 없으면서 문화 혜택이 많음 )

지역 한인 사회

성장하는 한인 사회 다수의 한인 유학생과 기업 취업자 최근 이주민이 빠르게 증가하고 있음 다수의 한인 전문 식품점과 음식점 다수의 한인 교회 . 많은 한인교민들의

활동이 교회 중심으로 이뤄짐 . 테니스와 골프 동호회 활성화

문상길 교수 ( 노스캐롤라이나 주립대학 , 마케팅 ) 일시 : 2007 년 6 월 18...

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