Product substitutability and the matching law

Product substitutability and the matching law
Document type
Working Paper
Author(s)
Foxall, Gordon R; James, Victoria K; Oliveira-Castro, Jorge M
Publisher
Cardiff Business School
Date of publication
1 August 2009
Series
Cardiff Marketing and Strategy Working Papers
Subject(s)
Marketing: all aspects of marketing, advertising and public relations
Collection
Business and management
Material type
Reports

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The applicability of matching analysis, pioneered in the context of laboratory experiments, to the investigation and interpretation of consumer choice in natural environments is explored by the examination of sequential purchases of four product categories based on information from a panel of British consumers. Over a 52 week period, participants (1693 for baked beans, 1817 for yellow fats, 1542 for fruit juice, and 1874 for biscuits/cookies) recorded data on the brands, quantities and prices of their purchases and the outlets at which they had made them. Matching analysis, adapted for use in the context of consumer behavior (Foxall and James 2001, 2003, Romero et al 2006), was employed and individual and aggregated results showed that consumers generally behave according to the predictions of the matching law when the data is integrated over 3- and 5-week periods. The matching results were assessed in light of the results of a substitutability scale which allowed consumers to state the perceived level of substitutability, independence and complementarity for 13 product combinations: Six of the combinations were ranked as containing substitutes by the judges; 6 as independents, and 1 as complementary. The results are generally supportive of the predictions to which matching gives rise but the anti-matching which was expected to characterize purchase patterns for complementary products was not observed. Further research should extend the range of product combinations and especially those perceived as complementary by consumers to allow a greater understanding of the interaction between the matching law and substitutability of consumer purchase choices.

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