Price, Brand Loyalty Determine Purchases

SEVILLE, SpainConsumers choose products based on price and brand above all else, according to a recent study of families' behavior in putting together their shopping basket (Revista de economía aplicada.2011;19(55):95-124). Researchers from the University of Seville studied consumption patterns for ground coffee and tomato puree and found people who are loyal to a brand for a particular product are usually also loyal to other brands in other categories.

For this reason, the researchers noted merchandising is not the only thing that affects purchasing choices. The consumer's "initial status" also has an effect. The same is true with price. Consumers who are sensitive to prices show the same sensitivity in the two categories studied.

"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 maximize their profits by coordinating marketing activities between various product categories," the study authors wrote. "We made a selection of the brands with the greatest market share, specifically those that accounted for 80 percent of families' expenditure on each of the products analyzed. This allowed us to see how these families behaved, and we obtained the results using statistical software."

There are other classic sociodemographic factors when it comes to segmenting the market including 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 family 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," said Begoña Peral, a researcher at the University of Seville and co-author of the study.

The data for the study came from a 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).