If families are price sensitive then they will be so regardless of the product

May 17, 2011
Do we buy things because of their attributes, their price, or out of brand loyalty? This was one of the questions asked by researchers from the University of Seville, who studied families' behavior in putting together their shopping basket. They did this by studying their consumption patterns for ground coffee and tomato puree. Credit: SINC

Do we buy things because of their attributes, their price, or out of brand loyalty? This was one of the questions asked by researchers from the University of Seville (US), who studied families' behaviour in putting together their shopping basket. They did this by studying their consumption patterns for ground coffee and tomato puree.

"We wanted to know whether there was any similarity in families' behaviour, regardless of the product being bought, and we found that there were certain aspects, such as price sensitivity and preference, which could, with a certain degree of probability, be stable within their shopping habits", Begoña Peral, a researcher at the University of Seville (US) and co-author of the study, tells SINC.

The team studied the consumption habits of two products: ground coffee and tomato puree. The data for the study came from the household panel survey carried out by the commercial research company TNS Sofres, comprising observations on the purchasing habits of a total of 2,719 families over a two-year period. In the case of coffee, they studied the choices that 1,423 families made between 88 different brands (24,881 purchases), while for tomato puree they looked at 1,296 families' choices between 54 brands (20,672 purchases).

The conclusions show that people who are loyal to a brand for a particular product are usually also loyal to other brands in other categories. For this reason, merchandising is not the only thing that impacts on purchasing choices. The consumer's "initial status" also has an effect. The same is true with price. Consumers who are sensitive to show the same sensitivity in the two categories studied.

"Such behaviour is latent. If you are price sensitive, you have a certain tendency to behave in the same way for other products. Likewise, if you prefer a certain brand of a product, you will show certain preferences for other brands of other products, too", says Peral.

"These results are useful for manufacturers who produce items in various categories as part of their brand management, as well as to help sales companies to maximise their profits by coordinating marketing activities between various product categories", the study shows.

"We made a selection of the brands with the greatest market share, specifically those that accounted for 80% of families' expenditure on each of the products analysed. This allowed us to see how these families behaved, and we obtained the results using statistical software", the researcher explains.

Socioeconomic level is not decisive

There are other classic sociodemographic factors when it comes to segmenting the market – age, socioeconomic level and number of family members. In this respect, the research group confirmed that these alone do not explain how a buyer will behave.

"However, in a previous work we looked at whether families' socioeconomic characteristics affected their choice of brand. The results showed that structure (number of members of the household and presence of children) has an impact on their price sensitivity with regard to their choice of brands for frequently-analysed products bought", explains Peral.

Explore further: Study shows banks that have good working relationships with their customers reduce loan defaults

More information: Begoña Peral Peral, Francisco Javier Rondán Cataluña, Enrique Carlos Díez de Castro. "La elección de marca en productos de compra frecuente", Revista de economía aplicada 19 (55): 95-124, 2011.

Provided by FECYT - Spanish Foundation for Science and Technology

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