Do mundane daily choices, such as what brands people buy in a supermarket, reflect aspects of values and ideologies? This article presents a large-scale field study performed to determine whether traits associated with a conservative ideology, as measured by voting behavior and religiosity, are manifested in consumers' routine, seemingly inconsequential product choices. Our analysis of market shares for a variety of frequently purchased products shows that both of these measures of conservatism are associated with a systematic preference for established national brands (as opposed to their generic substitutes) and with a lower propensity to buy newly launched products. These tendencies correspond with other psychological traits associated with a conservative ideology, such as preference for tradition and the status quo, avoidance of ambiguity and uncertainty, and skepticism about new experiences.

The concept of one-to-one marketing is intuitively appealing, but there is little research that investigates the value of individual-level marketing relative to segment-level or mass marketing. In this paper, we investigate the financial benefits of and computational challenges involved in one-to-one marketing. The analysis uses data from an online grocery and drug retailer. Like many retailers, this firm uses multiple promotional instruments including discount coupons, free shipping offers, and a loyalty program. We investigate the impact of customizing these promotions on the two most important consumer decisions: the decision to buy from the store and expenditure. Our modeling approach accounts for two sources of heterogeneity in consumers' responsiveness to various marketing mix elements: cross-sectional differences across consumers and temporal differences within consumers based on the purchase cycle. The model parameter estimates are fed into a dynamic programming model that determines the optimal number, sequence, and timing of promotions to maximize retailer profits. A series of policy simulations show that customizing promotions leads to a significant increase in profits relative to the firm's current practice of uniform promotions. However, the effectiveness of various promotions varies because of both cross-sectional differences in consumers as well within consumer heterogeneity due to purchase cycle factors. For instance, we find that free shipping tends to be the preferred instrument for re-acquiring lapsed customers, whereas an across-the-board price cut (via a discount coupon) is the most effective tool for managing the segment of most active customers. Interestingly, we find that customizing based on within-customer temporal heterogeneity contributes more to profitability than exploiting variations across consumers. This is important because the computational burden of implementing the dynamic optimization to account for cross-sectional heterogeneity is far greater than accounting for temporal heterogeneity. Furthermore, targeting promotions based only on timing rather than the nature and magnitude of the offers across consumers alleviates the public relations risks of price discrimination. Implications for marketing managers are also discussed.CRM, one-to-one marketing, promotions, dynamic programming, heterogeneity, database marketing

Retailers typically engage in some form of price discrimination to increase profitability. In this article, the authors compare the impact on retailer profitability of two price discrimination mechanisms: quantity discounts based on package size (second-degree price discrimination) and store-level pricing or micromarketing (third-degree price discrimination). Whereas the latter has been well addressed in the marketing literature, there is limited empirical research on the use of quantity discounts for price discrimination. Using store-level sales data, the authors estimate a structural demand model, accounting for parameter heterogeneity and price endogeneity. They combine the parameter estimates with a model of retailer pricing to conduct optimal pricing and profitability simulations under several scenarios, ranging from constraining the retailer not to engage in any form of price discrimination to the least restrictive scenario of setting nonlinear price schedules specific to each store. The pricing simulations enable the decomposition of profitability as a result of the different forms of price discrimination. Profits are greatest when retailers combine second- and third-degree price discrimination. The authors find that the ability to engage in second-degree price discrimination contributes more to retailer profitability than does third-degree price discrimination.

ABSTRACT. If economic growth elsewhere raises an individual's earning prospects relative to his present location, then the individual will move. However, if the individual can exploit economic growth elsewhere by commuting, he will not need to move to gain from the expansion. County-level data from eight states in the Midwest over the period 1969-1994 are used to show that local county population responds positively to own-county economic growth, economic growth in the adjacent county, and economic growth two counties away. The magnitude of the effect decreases as distance from the county increases, and turns negative beyond a three county radius.

Of the many proposals to reverse the obesity epidemic, the most contentious is the use of price-based interventions such as the fat tax. Previous investigations of the efficacy of such initiatives in altering consumption behavior yielded contradictory findings. In this article, we use six years of point-of-sale scanner data for milk from a sample of over 1,700 supermarkets across the United States to investigate the potential of small price incentives for inducing substitution of healthier alternatives. We exploit a pricing pattern particular to milk in the United States, whereby prices in some geographical regions are flat across whole, 2%, 1%, and skim milk; whereas in other regions they are decreasing with the fat content level. The prevailing price structure is determined at a chain and regional level, and is independent of local demand conditions. This exogenous variation in price structure provides a quasi-experimental set-up to analyze the impact of small price differences on substitution across fat content. We use detailed demographics to evaluate price sensitivity and substitution patterns for different socioeconomic groups. Results show that small price differences are highly effective in inducing substitution to lower calorie options. The impact is highest for low-income households who are also most at risk for obesity. Our results suggest that a selective taxation mechanism that lowers the relative prices of healthier options, such that those price changes are reflected in shelf prices at the point-of-purchase, can serve as an effective health policy tool in the efforts to control obesity. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mksc.2015.0917 . Press Release