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Behavioural Processes 66 (2004) 235260

The behavioral economics of consumer brand choice: patterns of


reinforcement and utility maximization
Gordon R. Foxall a, , Jorge M. Oliveira-Castro b , Teresa C. Schrezenmaier a
a Cardiff Business School, Cardiff University, Cardiff, UK
b Instituto de Psicologia, Universidade de Braslia, Braslia, DF, Brazil

Abstract
Purchasers of fast-moving consumer goods generally exhibit multi-brand choice, selecting apparently randomly among a
small subset or repertoire of tried and trusted brands. Their behavior shows both matching and maximization, though it is
not clear just what the majority of buyers are maximizing. Each brand attracts, however, a small percentage of consumers who
are 100%-loyal to it during the period of observation. Some of these are exclusively buyers of premium-priced brands who
are presumably maximizing informational reinforcement because their demand for the brand is relatively price-insensitive or
inelastic. Others buy exclusively the cheapest brands available and can be assumed to maximize utilitarian reinforcement since
their behavior is particularly price-sensitive or elastic. Between them are the majority of consumers whose multi-brand buying
takes the form of selecting a mixture of economy- and premium-priced brands. Based on the analysis of buying patterns of 80
consumers for 9 product categories, the paper examines the continuum of consumers so defined and seeks to relate their buying
behavior to the question of how and what consumers maximize.
2004 Elsevier B.V. All rights reserved.
Keywords: Consumer behavior; Elasticity of demand; Brand choice; Behavioral Perspective Model; Fast moving consumer goods

1. Introduction brands usually differ widely with respect to penetra-


tion level and not so much in terms of average buying
Within marketing science, the analysis of brand frequency (i.e., how often consumers buy it during the
choices for fast-moving consumer goods, based on analysis period); and (e) brands with smaller penetra-
aggregate data, shows that most individuals tend to tion levels (or market shares) also tend to show smaller
purchase a variety of brands within a product cate- average buying frequency and smaller percentages
gory. More specifically, such results indicate that, in of 100%-loyal consumers (i.e., double jeopardy).
steady-state markets: (a) only a small portion of con- These results have been replicated for some 30 food
sumers buy just one brand on consecutive shopping and drink products (from cookies to beer), 20 cleaning
occasions, that is, few consumers remain 100% loyal and personal care products (from cosmetics to heavy
to one brand; (b) each brand attracts a small group of cleaning liquids), gasoline, aviation fuel, automobiles,
100%-loyal consumers; (c) the majority of consumers some medicines and pharmaceutical prescriptions,
buy several different brands, selected apparently ran- television channels and shows, shopping trips, store
domly from a subset of existing brands; (d) existing chains, individual stores, and attitudes toward brands
(cf. DallOlmo Riley et al., 1997; Ehrenberg, 1972;
Corresponding author. Tel.: +44-2920-874-275. Ehrenberg et al., 1990; Ehrenberg and Scriven, 1999;
E-mail address: Foxallg@Cardiff.ac.uk (G.R. Foxall). Goodhardt et al., 1984; Uncles et al., 1995).

0376-6357/$ see front matter 2004 Elsevier B.V. All rights reserved.
doi:10.1016/j.beproc.2004.03.007
236 G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260

So sure are the relationships involved that a math- literature. Krishnamurti and Raj (1988), for example,
ematical model has also been developed to describe state that the consumer chooses that alternative which
such regularities, the Dirichlet Model (e.g., Ehrenberg maximizes his (or her) utility, although they recog-
et al., 1990), which has been used to predict the mar- nize that this is a latent or unobservable utility which is
ket insertion of new products (Ehrenberg, 1993), to assumed rather than tested (cf. Rachlin, 1980). Based
analyze the effects of promotions (Ehrenberg, 1986; on this maximization assumption, one could expect
Ehrenberg et al., 1994), and to evaluate patterns of consumers to choose the cheapest brands that offer the
store loyalty (Ehrenberg and England, 1990; Keng attributes and characteristics that they are looking for.
and Ehrenberg, 1984; Sharp and Sharp, 1997; Although the price of different brands is certainly one
Uncles and Ehrenberg, 1990). Nonetheless, despite variable that is expected to influence brand choice, as
the wide replication of such patterns, which have exemplified by the literature on the effects of promo-
been raised by some authors to the status of empiri- tions (e.g., Ehrenberg, 1986; Ehrenberg et al., 1994;
cal generalizations in marketing (e.g., Uncles et al., Bell et al., 1999), empirical evidence showing that con-
1995), little is known about the variables and the sumers tend to maximize when choosing across brands
underlying behavioral mechanisms that influence and was not available before recent research on the behav-
explain consumers brand choices. The marketing lit- ioral economics of brand choice (Foxall and James,
erature is not forthcoming, for instance, about the fac- 2001, 2003; Foxall and Schrezenmaier, 2003). In this
tors responsible for shaping the subset of the brands paper, we extend this research from the analysis of
that compose a product category among which con- single cases to that of panel data for some 80 con-
sumers choose in practice (their consideration sets) sumers purchasing 9 product categories, examining in
and what Ehrenberg calls the repertoire of such detail the relationship between price and quantity de-
brands actually purchased (their purchase sets). manded in relation to the functional and symbolic at-
It is a basic axiom of modern marketing thought tributes of brands which influence the composition of
that sales are produced not simply by price acting consumers consideration and purchase sets.
alone, any more than by product attributes, or adver-
tising and other promotional means, or distribution 1.1. Previous research
effectiveness acting singly, but by a combination of
all four of these influences on demand that constitute Foxall (1999a), Foxall and James (2001, 2003),
the marketing mix. As marketing science has devel- and Foxall and Schrezenmaier (2003) adopted tech-
oped as a separate discipline, it has de-emphasized the niques refined in choice experiments in behavioral
influence of price on demand (the principal focus of economics and behavior analysis to investigate brand
the economists purview) and stressed the non-price choice. Three types of analysis were used: matching,
elements of the marketing mix, notably the promo- relative demand, and maximization.
tional activity involved in brand differentiation (De
Chernatony and McDonald, 2003; Jary and Wileman, 1.1.1. Matching analysis
1998; Watkins, 1986). Behavioral economics, partly The results of choice experiments with nonhuman
because of the stress it has placed on the economics animals in behavior analysis gave support for the de-
of animal responding in experimental situations, velopment of the matching law, which in its simplest
where the sole reliable analogue of the influences on form asserts that organisms in choice situations match
consumer demand ruling in the market place relates the relative distribution of responses to the relative
to price, has necessarily followed the reasoning and distribution of the reinforcers they obtain (Herrnstein,
methodology of the economist rather than the mar- 1961, 1970). In its more general form, the generalized
keting scientist. The non-price marketing mix has, matching law (Baum, 1974, 1979) states that the ra-
therefore, not featured in the research program of tio of responses between two alternatives is a power
behavioral economics. function of the ratio of reinforcers, that is,
The assumption that consumers maximize utility in  s
some way or othera preoccupation of the economics B1 R1
=b (1)
approachis, nevertheless, common in the marketing B2 R2
G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260 237

where B represents responses, R represents rein- a different kind of analysis. Matching analysis plots
forcers, and the subscripts 1 and 2, choice alternatives. the quantity obtained of a commodity as a positively
The parameter b, obtained from the intercept of the accelerating function of the amount paid for it. By
linear loglog formulation of the law, is a measure of contrast, the sensitivity of the quantity demanded of
biased responding between the alternatives, usually a commodity to its ruling market price is expressed
related to asymmetrical experimental factors such as by economists in terms of the demand curve. One
differences in response cost between the alternatives. of the assumptions underlying the demand curve is
The parameter s, the slope of the linear loglog for- that as the unit price of a commodity increases, its
mulation, is interpreted as a measure of sensitivity in consumption will decrease (Madden et al., 2000).
response distribution with changes in reinforcer dis- This is demonstrated when demand curves plotted
tribution, which indicates that the individual favors, on logarithmic coordinates show consumption to be
more than predicted by precise matching, the richer a positively decelerating function of unit price. The
(s > 1) or poorer (s < 1) schedule of reinforcement. sensitivity of quantity demanded to price is expressed
In behavioral economics, the parameter s can also be in economic terms as price elasticity of demand
used as an estimate of the level of substitutability of which at its simplest relates the percentage change in
the reinforcers in the situation, in which case there is amount consumed to the percentage change in price
evidence suggesting that it should be equal or close (Houston and McFarland, 1980; see also Hursh, 1980;
to 1 for substitutable commodities, and negative for Hursh and Bauman, 1987).
complementary commodities (cf. Baum and Nevin, In an attempt to incorporate some of the features
1981; Foxall, 1999a; Kagel et al., 1995). of naturalistic marketing settings involving consumer
Foxall and James (2001, 2003) applied this type choices among competing brands whose relative prices
of analysis to data obtained from consumers brand might influence selection decisions, Foxall and James
choice. Consumer choice was analyzed for brands that (following Kagel et al., 1980) employed relative de-
were substitutes, non-substitutes and independent, for mand analysis which presents the relative amounts of
1-, 3-, and 5-week periods. Matching and maximiza- brands A and B as a function of their relative prices.
tion analyses were based on relative measures of price Their results, albeit for a restricted sample of individ-
paid and amount bought, which considered the relation ual consumers and covering a small number of product
between the amount paid for (or amount bought of) the categories, found downward-sloping demand curves
preferred brand and the amount paid for (or amount which indicated a degree of price sensitivity on the part
bought of) the other brands in the consumer reper- of the buyers investigated (Foxall and James, 2001,
toire. As predicted, substitute brands showed matching 2003).
whereas independent brands showed some evidence
of anti-matching. Their results also showed some ev- 1.1.3. Maximization analysis
idence that consumers tend to maximize the amount Analyses to reveal whether the observed consumer
they pay in relation to the amount they buy within their behavior was maximizing returns on price expended
brand repertoire by purchasing the cheapest brand (al- were undertaken following procedures developed
though they sometimes also bought some more expen- by Herrnstein and Loveland (1975), Herrnstein and
sive brand). Similar results have also been reported Vaughan (1980). On conc ratio schedules,1 there is a
by more recent research (cf. Foxall and James, 2003; fixed probability of reinforcement for each response,
Foxall and Schrezenmaier, 2003).
1 A ratio schedule is one in which a specified number of re-
1.1.2. Relative demand analysis sponses has to be performed before reinforcement becomes avail-
Whereas matching analysis relates the actual able. Fixed ratio schedules keep the number of required responses
amount of a reinforcer obtained to the actual amount equal from reinforcer to reinforcer; variable ratio schedules allow
of behavior expended in obtaining it, an understand- the required number of responses to change from one reinforcer to
the next. Concurrent variable ratio schedules, usually abbreviated
ing of consumer decision making in the face of com- to conc VR VR, allow simultaneous choice to be investigated. It
peting sources or reinforcement offered at a variety is this arrangement that most clearly resembles the purchases of
of programmed behavioral costs or prices requires brand within a product class.
238 G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260

which can be expressed as the reciprocal of the ming from rather nebulous branding considerations.
schedule parameter. Concurrent VR30 VR60 refers to Branding is not, however, a quantifiable construct and
response alternatives which have respective reinforce- an important objective of the research reported here
ment probabilities of 1/30 and 1/60. On ratio sched- was to clarify its basis as an extra-functional source
ules, the probability of reinforcement is independent of reinforcement.
of response rate (something not true of VI schedules Although research to date is indicative that the prin-
where the probability of reinforcement is inversely ciples and methods of behavioral economics can be
proportional to rate of responding). Although most usefully applied to consumer brand purchasing, there
research on matching and maximization has been is clearly need for a more extensive investigation of
undertaken in laboratory settings which incorporate a larger, systematically-selected sample of consumers
VI schedules, VR schedules are more probable in purchasing a wider range of products in order to as-
naturalistic settings (Herrnstein, 1982; Herrnstein and certain how far previously reported results are gener-
Loveland, 1975; Herrnstein and Prelec, 1991; alizable. It is necessary to take into greater considera-
Herrnstein and Vaughan, 1980; Vaughan and tion the differences between the typical consumption
Herrnstein, 1987). patterns of laboratory subjects which can be shown
Faced with conc VR40 VR80 schedules, the to be sensitive to price (or its analogue) and those of
individuals maximal probability of reinforcement consumers in supermarkets who are subject to a much
is obtained by responding exclusively on the VR40 wider spectrum of choice under the influence of the
schedule. Matching theory makes the same predic- entire array of marketing mix variables available to
tion for conc VR VR schedules, claiming that maxi- retailers. For example, an expectation of demand anal-
mization is under these circumstances a special case ysis as it is employed in the behavioral economics lit-
of matching (cf. Rachlin, 1980). Previous research, erature is that when consumers choose between qual-
subject to the limitations of scope noted above, con- itatively identical reinforcers which vary in terms of
firmed that consumers tend to maximize by generally the unit prices that must be paid for them, the brand
purchasing the least expensive brand available within with the lower or lowest unit price will be exclusively
their consideration set (Foxall and James, 2001, chosen (Madden et al., 2000). This is the prediction
2003). of both matching and maximization theories with re-
gard to choice on conc VR VR schedules. However,
1.2. Research issues research in these theoretical traditions typically takes
place within laboratory settings that restrict choice to
Taken together, these results indicate that, within two alternatives, one or other of which must be se-
their repertoire of brands, consumers show price sen- lected at any choice point. Consumer brand choice is
sitivity, maximizing (most of the time), and matching more complicated than this in that numerous choices
(which refers to the relation between the amount they are usually available to the consumer within a given
spend and the amount they buy). Based on such find- product category, more than one of which may be
ings, one can predict that consumers will buy, more selected on a single shopping occasion (Foxall and
often than not, the cheapest brand among those that Schrezenmaier, 2003).
they usually buy, although one still does not know why A source of difference among brands, related to
they usually buy a certain set of brands and not others. this and other aspects of consumer choice, stems from
The fact that consumers tend to buy the cheapest brand the distinction between utilitarian and informational
within a restricted set of brands rather than the cheap- benefits offered by different brands, as proposed
est of all brands available in the product category indi- by the Behavioral Perspective Model (Foxall, 1990,
cates that not all brands are perfect substitutes for the 1994, 1996, 1997, 1998). According to this proposal,
others. Even though they may be functionally equiva- the behavior of the consumer can be explained by
lent for the consumer, the brands are not entirely equiv- the events that occur before and after the consumer
alent, that is, consumer preferences reflect more than situation, which influence directly the shaping and
functional utility. This additional source of utility is maintenance of consumer behavior in specific envi-
usually rationalized in the marketing literature as stem- ronments. The consumer situation, in turn, is defined
G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260 239

as the intersection between the consumer behavior mation per se but in feedback about the individuals
setting and the consumer learning history. The con- performance, indicating the level of adequacy and ac-
sumer behavior settinga supermarket, a bookstore, curacy of the consumers behavior. Whereas utilitarian
or a rock concertincludes the stimuli that form the reinforcement is associated with the functional and
social, physical and temporal consumer environments. economic consequences of purchasing and consuming
As purchase and consumption are followed by differ- goods or services, informational reinforcement is de-
ent consequences in different settings, the events in rived from the level of social status and prestige that
the setting become predictive of such consequences, a consumer obtains when purchasing or using certain
building a learning history that relates elements of the goods. According to Foxall, informational and utili-
setting to different consequences. According to the tarian reinforcements would be orthogonal, and most
proposal, antecedent events present in the consumer products and services would involve, in different lev-
behavior setting signal the possibility of three types els or proportions, both types of reinforcement. Then,
of consequences: utilitarian reinforcement, informa- according to this analysis, the person who drives a
tional reinforcement, and aversive events. One major Jaguar or Bentley gets, in addition to door-to-door
characteristic of economic behavior is that it involves transportation (utilitarian), social status and approval
both aversive and reinforcing consequences, for one from friends and acquaintances who see that car as a
has to give away money or rights (i.e., loss of gener- prestigious product, and from the general public that
alized reinforcers) in order to get products or services sees him or her driving around in a socially desirable
(i.e., reinforcing events). car. The social status and prestige received are the
Utilitarian reinforcement consists in the practical informational, symbolic, consequences that the con-
outcomes of purchase and consumption, that is, func- sumer obtains, which are usually related to branding
tional benefits derived directly (rather than mediated or the level of brand differentiation of the product (cf.
by other people) from possession and application of a Foxall, 1999a).
product or service. It is reinforcement mediated by the The specific combination of utilitarian and infor-
product or service and refers to consequences associ- mational reinforcement made available by purchase
ated with increases in the utility (i.e., use value) for or consumption of a particular product is known as
the individual (pleasant) obtained from the product the pattern of reinforcement controlling these re-
or service. The utilitarian, most obvious, consequence sponses. Foxall and James (2001, 2003) argued that
of owning a car, for example, is to be able to go from pattern of reinforcement influences consumers brand
one place to the other, door to door, not depending on choices and that it is a key to understanding what
other peoples time schedules and avoiding being ex- consumers maximize. Different consumers might, for
posed to weather conditions, as usually happens when example, select brands belonging to different levels
one uses public transportation. of informational reinforcement, some buying mostly
Informational reinforcement, on the other hand, highly differentiated whereas others buy relatively un-
would be symbolic, usually but not exclusively medi- differentiated brands. The differences in patterns of
ated by the actions and reactions of other persons, and brand choice, including the set of brands that consti-
would be more closely related to the exchange value tute each consumers brand repertoire, may be a con-
of a product or service.2 It does not consist in infor- sequence of individual differences in responsiveness
to different types of benefits. This idea gains even
2 Following Wearden (1988), we use informational
reinforcement to refer to performance feedback. The term concomitant consideration arises in the functional definition of
informational carries excess baggage for many behavior analysts rules as plys, which involve the mediation of other people and
since it may appear to make cognitive inferences. Given the ex- which are therefore social, or as tracks, which depend on the
amples we provide in the text, it may appear that social would rule-followers reading the physical environment, e.g., in the
be a more acceptable and accurate alternative. However, social process of following directions to get to a supermarket (Zettle
does not entirely capture what we mean by informational which and Hayes, 1982). Informational reinforcement thus remains our
includes rewards for adhering to social mores, and physical designation of choice for this phenomenon since it includes both
sources of feedback such as lines on the road that convey an personally-mediated and nonpersonally-mediated performance
impression of speed, or the fullness of ones shopping trolley. A feedback.
240 G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260

more force when we consider that branding is usu- 2. Method


ally related to price, higher-differentiated brands being
more expensive than less differentiated ones, and that 2.1. Sample and procedure
consumers have different income levels. Then, indi-
vidual buying patterns may be predominantly related, The market research company, Taylor Nelson
for example, to minimizing costs, maximizing utili- Sofres, provided consumer panel data for 80 British
tarian reinforcement, maximizing informational rein- consumers and their total weekly purchases in 9
forcement, or to particular combinations of these. If fast-moving consumer goods categories over 16
this is so, consumers may differ with respect to price weeks. Taylor Nelson Sofres is one of the largest
responsiveness related to informational and utilitarian and best-known companies in its field and clusters
benefits. consumer purchasing data on its so-called TNS Su-
The research reported here tested predictions arising perpanel on a range of consumer goods from 15,000
from these considerations using data from a consumer randomly selected British households. Data collec-
panel. Panel data are especially valuable for longitu- tion is operationalized as follows: after each shop-
dinal studies because changes in purchasing behavior ping trip, members of the panel scan their purchased
can be monitored very accurately by continuous mea- items into a sophisticated handheld barcode reader
surements (Crouch and Housden, 2003). Furthermore, by passing the scanner across the barcodes, which
diary panel data are considered to be very precise and nowadays are printed on all packaged supermarket
less susceptible to errors than those obtained through products. The data are then automatically sent to
consumers reporting their past behavior in surveys Taylor Nelson Sofres for central processing without
(Churchill, 1999). Hence, they are particularly valu- any further voluntary contribution from the panel
able when collecting multifarious information on vari- participants. The retail outlets at which purchases
ables such as price, shopping occasion, brand name, were made was also identified for each shopping oc-
and so on. The special significance of this research casion, and included major UK supermarkets such
technique for the present research lies in the fact that as Asda (a subsidiary of Wal-Mart), Tesco, and
the data were obtained non-experimentally, by elec- Sainsbury.
tronically tracking real consumers spending their real The 9 product categories that served as basis for this
discretionary income. research were: baked beans, cookies, cereals, butter,
The two main purposes of the investigation were as cheese, fruit juice, instant coffee, margarine, and tea.
follows. First, in order to ascertain the generalizabil- In more detail, the following information was recorded
ity of earlier research findings to consumer behavior on each shopping occasion for each consumer: brand
in marketing-dominated contexts, three analyses were specification (i.e., different versions of the same prod-
undertaken in order to determine whether the brands in uct category were classified as different brands, e.g.,
question were in fact close substitutes (matching anal- Corn Flakes and Rice Krispies by Kelloggs), pack-
ysis), whether brand choice was sensitive to price dif- age size, name of the supermarket/shop, date, num-
ferentials (relative demand analysis), and whether con- ber of units, and total amount spent. As the analysis
sumers could be said to maximize returns (maximiza- of brand choice requires information concerning ac-
tion analysis). Second, in order to gauge consumers tual purchase across several buying opportunities, data
responsiveness to price and non-price marketing mix from consumers who bought, within each product cat-
elements, the brands of 9 food product categories were egory, fewer than four times during the 16-week pe-
ranked according to their informational and utilitarian riod were disregarded.
levels. The proportion of purchases made by each
consumer at each brand level was computed, which 2.2. Measures and analyses
served as basis for grouping consumers according
to the level of brands they bought most. To test for 2.2.1. Matching
differences in price responsiveness, price elasticities In consumer research, the matching law becomes
for consumer groups and individual consumers were the proposition that the ratio of amount of money
compared. spent for a brand to the amount spent on other brands
G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260 241

within the product category will match the ratio 2.2.4. Schedule analogies
of reinforcers earned (i.e., purchases made as a re- To ascertain how consumers make decisions, it is
sult of that spending) of that brand to the amount necessary to have some idea of how they integrate
bought of other brands within the product category. price data and brand choice responses over time,
The first of these, the amount paid ratio, was oper- notably from shopping trip to shopping trip. In the
ationalized as the ratio of money spent on Brand laboratory this can be achieved without undue diffi-
A, defined as the most frequently purchased brand, culty by the imposition of a schedule of reinforcement
to money spent on Brand B, i.e., the amount which programs the relationships between dependent
spent on the remaining brands purchased within the and independent variables. Researchers who are con-
requisite product category: Amount paid for Brand cerned with the behavioral analysis and explanation
A/Amount paid for the remaining brands in the prod- of non-experimental behavior face the difficulty of
uct category (B). The amount bought ratio was cal- ascertaining with precision whether brand choice in
culated, in terms of the physical quantity acquired, naturalistic settings occurs, by analogy, on a series
as: Amount bought of Brand A/Amount bought of of fixed ratio schedules (represented by the prices of
Brand B (the remaining brands of the product cate- each brand obtaining on each purchase occasion) or,
gory). Logarithmic transformations were used for the aggregated over several such occasions, on variable
analyses. ratio schedules. The question we are seeking to an-
swer is whether consumers take into consideration
2.2.2. Relative demand only the prices of the brands in their consideration
In order to devise relative demand curves for the set that are in force on each discrete shopping trip,
product categories, a demand analysis expressed the or whether their behavior (brand choice) reflects the
ratio of amount bought of the dominant brand (A) to pricequantity relationships for competing brands
the amount bought of the remaining brands in that cat- that are in force over the extended period represented
egory (B) as a function of the ratio of the relative aver- by a series of shopping trips. This led us to under-
age prices of the dominant brand to the average price take two analyses for each product category studied.
of other brands purchased from the appropriate prod- The first treated the schedules as a sequence of fixed
uct category (the relative price ratio). In operational ratio relationships by expressing measures of amount
terms, the relative price ratio = mean price of Brand bought as a function of measures of prices for (a)
A/Mean price of other brands in the repertoire (B). weekly periods, representing (albeit by analogy rather
The amount bought ratio was calculated as in the case than programming) the situation in which experimen-
of the matching analysis. Again, log transformations tal subjects face a sequence of FR schedules, and (b)
were used for the analyses. periods of 3 weeks, for which the data were aver-
aged, similarly representing an experimental situation
2.2.3. Maximization governed by VR schedules.
To ascertain whether maximization is occurring, fol-
lowing Herrnstein and Loveland (1975), Herrnstein 2.3. Utilitarian and informational reinforcement
and Vaughan (1980), we plotted the amount bought
ratio against probability of reinforcement. The lat- To investigate possible effects of informational and
ter is operationalized as the reciprocal of the price utilitarian reinforcement values on brand choice, an
of brand A over the reciprocal of the price of brand attempt was made to identify different levels or mag-
A plus the reciprocal of the mean of the prices of nitudes of informational and utilitarian reinforcement
the other brands in the consumers consideration set offered by the brands available (i.e., bought by con-
(Brand B): 1/PA /(1/PA + 1/PB ). If the step func- sumers in the sample) in each product category. The set
tion described by the data points falls to the right of alternative brands and product characteristics avail-
of the 0.5 line on the abscissa then the purchaser is able in a supermarket within each product category
maximizing by selecting the favorite brand (A) which can be interpreted as a set of programmed contingen-
is also the least expensive (Herrnstein and Loveland, cies of reinforcement, which specify what responses
1975). (e.g., how much one has to pay) are followed by what
242 G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260

consequences (e.g., product characteristics). A major chocolate chip cookies). In the case of differentiated
part of marketing activities, according to this interpre- product types, several general brands usually offer the
tation, is to plan and establish contingencies for the different product types, charging differentiated prices
behavior of consumers (Foxall, 1999b). Not all pro- for them (e.g., plain cookies are cheaper than more
grammed contingencies, however, have the desired or elaborate cookies for all brands examined).
planned influences on behavior, and that is why an im- Informational reinforcement, by contrast, is
portant issue for marketing managers and academics is strongly associated with brand differentiation in that
to identify the actual effects of different contingencies the most promoted and best known brands are usually
(i.e., the effects of the price and non-price elements of associated with higher levels of prestige, social status,
the marketing mix on consumer choice). The analyses and trustworthiness. In the case of the supermarket
of informational and utilitarian reinforcement levels products investigated here, informational reinforce-
presented below follow the same logic, that is, they ment level is closely associated with brand differen-
refer to programmed levels of informational and util- tiation, which in turn is usually also related to price
itarian reinforcements, which may or may not influ- differentiation. If one compares the level of brand
ence particular instances of consumer choice. In other differentiation of, say, Asda Smart Price and Heinz
words, in the case of marketing activities, an event that plain baked beans, Heinz is clearly the better known,
was planned to have high reinforcement magnitude, more differentiated and consequently more expensive
vis--vis its aversive components (costs), can in fact brand, offering a higher level of informational rein-
have low reinforcing value for consumers (e.g., inno- forcement. This kind of difference among brands has
vations that do not attract people or are too expensive). been interpreted in the present work as differences in
Considering that there are no general units to mea- informational reinforcement level. It should be noted
sure utilitarian and informational reinforcement lev- that informational reinforcement level as specified
els, these were identified based on a forced ranking here does not exclude the possibility of there also
system in which three informational and two utilitar- being differences in utilitarian reinforcement between
ian levels were ascribed to each product category. This two informational magnitudes. Corporate representa-
classification was chosen due to our interest in making tives of any differentiated brand would argue strongly
comparisons across product categories and was in part that their products differ from those of other compa-
influenced by our sample (not all brands and brand nies in terms of their utilitarian attributes, such as
types were bought by our sample during the period). quality of raw materials and ingredients, production
Levels of informational and utilitarian benefit cannot procedures, health control, and such like. Similarly,
be defined absolutely: they depend ultimately on the consumers of differentiated brands may also assert
interests of researchers. More levels of utilitarian rein- these brands functional superiority, e.g., that they
forcement, for example, could be identified for some taste much better than other cheaper brands, which
product categories, such as cookies and cheese, but an would imply differences in utilitarian reinforcement
equal number of levels across products was thought to level. The classification adopted does not exclude
be desirable for the present analysis. such possibilities, since most consumer behavior gen-
In the case of supermarket food products like those erates both types of consequences. Nevertheless, the
investigated here, increases in utilitarian level can be ranking of informational reinforcement is based on
identified by the addition of (supposedly) desirable at- the predominant difference that one can find between
tributes. Such attributes usually add value to the prod- products, offered by different brands, that usually
uct or its consumption, are mentioned on the package have almost identical formulations (cf. Ehrenberg,
or product name, and justify increases in price. More- 1972; Foxall, 1999a) and may not even be distin-
over, in most cases, several general brands offer prod- guished by consumers on the basis of their physical
ucts with and without these attributes. For the product characteristics (e.g., in blind tests).
categories in question, utilitarian levels were identi- The ranking of informational reinforcement level
fied based on additional attributes (e.g., plain baked was based on the following general criteria: (1) in-
beans versus baked beans with sausage) and/or differ- creases in prices across brands for the same product
entiated types of products (e.g., plain cookies versus type (e.g., plain baked beans, plain cookies or plain
G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260 243

Table 1
Levels of informational reinforcement
The cheapest own (retailer) brands (Asda Smart Price , Tesco Value , Sainsbury Economy ) Level 1
Own (retailer) brands that do not mention good value for money or economy Level 2
(Asda, Tesco, Sainsbury) and cheapest specialized brands
Specialized brands (Heinz , McVities , Kelloggs , Lurpak ) with higher prices Level 3

cornflakes) were considered to be indicative of differ- the perfect substitutability of the alternative rein-
ences in informational levels; (2) the cheapest store forcers. Measures of s that deviated only in the small-
brands (e.g., Asda Smart Price , Tesco Value , Sains- est degree from unity were generally found (Figs. 1
bury Economy ) were considered to represent the and 2, Table 3). In Tables 35, we report s values as the
lowest informational level (Level 1); (3) store brands output from the regression equations, and the b (bias)
that do not mention good value for money or econ- values as the intercept from those equations. This gen-
omy (e.g., Asda, Tesco, Sainsbury) and cheapest spe- eral pattern of substitutability (Foxall and Schrezen-
cialized brands were usually considered to represent maier, 2003) is consistent with the findings of earlier
the medium informational level (Level 2); and (4) spe- analyses in which anti-matching and substantial under-
cialized brands (e.g., Heinz , McVities , Kelloggs , matching (Kagel et al., 1995) were demonstrable only
Lurpak ), with higher prices, were considered to rep- for gross complements belonging to separate product
resent the highest informational level (Level 3). The categories (Foxall and James, 2001, 2003). However,
classification is shown in Table 1. as Table 3 indicates, there are two exceptions. Un-
dermatching is apparent in the case of baked beans
whether data are integrated over a series of 1-week pe-
3. Results and discussion riods (the so-called FR schedule) or over 3-week pe-
riods (VR). Consumers in this case selected Heinz
General statistics for the sample are shown in baked beans to an extent disproportionate with that
Table 2. predicted by strict matching: There were in total 265
purchases of baked beans (including baked beans with
3.1. Preliminary analyses sausages and other complements), 52% of which were
for Heinz plain baked beans alone. Their favorite
3.1.1. Matching brand was the most expensive. In the case of fruit juice,
As has been noted, when the matching law is ex- undermatching is apparent from the FR schedule.
pressed logarithmically as a power function, unity of This anomaly arises from the single outlying value
the exponent s is frequently interpreted as indicating shown in Fig. 1. When this value is excluded from the

Table 2
Number of consumers, total and average (per consumer) number of purchases, total and average (per consumer) amount spent, average
(per quantity) price, average unit price, total and average number of brands purchased, and percentage brand loyalty, calculated for each
product category
Product Number of Total Average Total Average Average Unit Total Average Brand
consumers purchases purchases spent spent price price brands brands loyalty (%)
Baked beans 39 265 6.79 4.52 0.62 0.07 0.51 32 2.18 74.59
Cookies 59 1125 19.07 14.02 0.74 0.30 0.63 230 8.93 28.99
Butter 21 174 8.29 9.84 1.17 0.28 0.76 21 2.24 76.91
Cereals 56 691 12.34 20.09 1.56 0.27 1.46 125 5.64 42.24
Cheese 45 447 9.93 13.38 1.38 1.91 2.76 95 5.24 43.66
Coffee 19 144 7.58 18.32 2.51 2.09 2.09 31 2.95 65.29
Fruit juice 34 336 9.88 13.99 1.52 0.72 1.05 43 2.91 65.77
Margarine 50 401 8.02 8.75 1.12 0.19 1.01 55 2.70 67.77
Tea 32 199 6.22 11.67 2.02 0.61 1.66 30 1.94 77.93
Baked Beans Cookies Butter

244
Amount Paid Ratio (logarithms)

Amount Paid Ratio (logarithms)


Amount Paid Ratio (logarithms)
0.0
0.6 -0.7
-0.4
0.4
-1.2
0.2 -0.8

0.0 -1.7 -1.2

-0.2
-2.2 -1.6
-0.4 -0.2 0.0 0.2 0.4 -2.0 -1.8 -1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -1.35 -1.10 -0.85 -0.60 -0.35 0.10 0.51

G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260


Amount Bought Ratio (logarithms) Amount Bought Ratio (logarithms) Amount Bought Ratio (logarithms)
Cheese Coffee

Amount Paid Ratio (logarithms)

Amount Paid Ratio (logarithms)


Cereals
Amount Paid Ratio (logarithms)

-0.5 0.0
-0.9 -0.2

-1.0 -0.4
-1.1
-0.6
-1.3 -1.5
-0.8

-1.5 -1.0
-2.0
-1.3 -1.1 -0.9 -0.7 -1.8 -1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.9 -0.7 -0.5 -0.3 -0.1 0.1
Amount Bought Ratio (logarithms) Amount Bought Ratio (logarithms) Amount Bought Ratio (logarithms)
Amount Paid Ratio (logarithms)

Amount Paid Ratio (logarithms)


Fruit Juice Margarine Tea
Amount Paid Ratio (logarithms)

-0.5 -0.2
-0.8
-0.7 -0.4

-1.2 -0.9 -0.6

-1.1 -0.8
-1.6
-1.3 -1.0

-2.0 -1.5 -1.2

-1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2 -1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2
Amount Bought Ratio (logarithms) Amount Bought Ratio (logarithms) Amount Bought Ratio (logarithms)

Fig. 1. Matching analysis: FR schedules. Amount paid ratio as a function of amount bought ratio for all 9 product types (all data are aggregated across purchasers within
a product category).
Baked Beans Cookies Butter

Amount Paid Ratio (logarithms)

Amount Paid Ratio (logarithms)


Amount Paid Ratio (logarithms)
0.4 -1.1 -0.2

-1.2 -0.4
0.3
-1.3 -0.6
0.2
-1.4 -0.8
0.1 -1.5 -1.0

0.0 -1.6 -1.2


0.15 -0.10 -0.05 0.00 0.05 0.10 -1.5 -1.4 -1.3 -1.2 -1.1 -1.0 -0.9 -0.9 -0.7 -0.5 -0.3 -0.1

G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260


Amount Bought Ratio (logarithms) Amount Bought Ratio (logarithms) Amount Bought Ratio (logarithms)
Cereals Coffee

Amount Paid Ratio (logarithms)


Amount Paid Ratio (logarithms)

Amount Paid Ratio (logarithms)


Cheese

-0.95 -0.3
-0.8
-1.00 -0.4
-0.9
-1.05
-0.5
-1.10
-1.0
-1.15 -0.6

-1.1
-1.000 -0.975-0.950 -0.925-0.900 -0.875 -0.850 -0.825 -1.2 -1.1 -1.0 -0.9 -0.8 -0.60 -0.55 -0.50 -0.45 -0.40 -0.35 -0.30 -0.25
Amount Bought Ratio (logarithms) Amount Bought Ratio (logarithms) Amount Bought Ratio (logarithms)
Margarine Tea
Amount Paid Ratio (logarithms)

Amount Paid Ratio (logarithms)


Fruit Juice
Amount Paid Ratio (logarithms)

-0.75 -0.45
-0.7
-0.80 -0.50
-0.8
-0.85
-0.9
-0.55
-1.0 -0.90
-0.60
-1.1 -0.95

-1.2 -1.00 -0.65

-0.9 -0.8 -0.7 -0.6 -0.5 -0.4 -1.10 -1.05 -1.00 -0.95 -0.90 -0.85 -0.76 -0.71 -0.66 -0.61 -0.56 0.51
Amount Bought Ratio (logarithms) Amount Bought Ratio (logarithms) Amount Bought Ratio (logarithms)

Fig. 2. Matching analysis: VR schedules. Amount paid ratio as a function of amount bought ratio for all 9 product types (all data are aggregated across purchasers within

245
a product category).
246 G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260

Table 3
Matching analysis
FR schedule VR schedule

R2 Beta Intercept R2 Beta Intercept

Baked beans 0.637 0.813 0.152 0.242 0.657 0.161


Cookies 0.941 0.972 0.112 0.992 0.997 0.300
Butter 0.991 0.996 0.183 0.994 0.998 0.172
Cereals 0.928 0.966 0.182 0.982 0.993 0.137
Cheese 0.893 0.949 0.035 0.986 0.995 0.252
Coffee 0.934 0.969 0.079 0.970 0.989 0.069
Fruit juice 0.541 0.756 0.415 0.990 0.996 0.321
Margarine 0.952 0.977 0.030 0.089 0.925 0.023
Tea 0.978 0.990 0.017 0.956 0.983 0.108
P < 0.05.
P < 0.01.

Table 4
Relative demand analysis
FR schedule VR schedule

R2 Beta Intercept R2 Beta Intercept

Baked beans 0.024 0.211 0.060 0.027 0.520 0.099


Cookies 0.113 0.415 2.22 0.422 0.753 2.996
Butter 0.333 0.013 0.834 0.077 0.009 0.293
Cereals 0.057 0.114 0.871 0.675 0.870 0.559
Cheese 0.085 0.382 1.072 0.510 0.795 1.047
Coffee 0.007 0.254 0.243 0.142 0.379 0.247
Fruit juice 0.319 0.604 3.382 0.612 0.842 3.219
Margarine 0.040 0.185 0.928 0.297 0.165 0.924
Tea 0.634 0.811 1.184 0.136 0.384 0.975
P < 0.05.
P < 0.01.

Table 5
Maximization analysis
FR schedule VR schedule

R2 Beta Intercept R2 Beta Intercept


Baked beans 0.015 0.284 2.102 0.020 0.485 1.54
Cookies 0.462 0.706 1.26 0.477 0.780 1.355
Butter 0.056 0.138 10.75 0.312 0.128 15.67
Cereals 0.034 0.188 0.378 0.633 0.851 0.869
Cheese 0.029 0.307 0.315 0.595 0.834 0.809
Coffee 0.019 0.233 0.147 0.080 0.436 2.189
Fruit juice 0.126 0.429 3.092 0.426 0.754 4.911
Margarine 0.073 0.057 0.067 0.310 0.132 0.062
Tea 0.678 0.836 5.885 0.188 0.330 3.345
P < 0.05.
P < 0.01.
G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260 247

analysis, the value of R2 is 0.991, and that for beta selected the cheapest brand within their considera-
is 0.996. The results for fruit juice indicate the merit tion set, these repertoires in many cases comprised
of integrating the data over 3- as well as 1-week only premium, highly differentiated brands. Many
periods: Even a price-conscious consumer would be consumers did not maximize in any absolute sense.
expected to deviate from matching from time to In each product category, own-label, or store brand,
time in order to secure variety (or because he or she and economy versions existed which were consider-
was buying on behalf of another household mem- ably cheaper than those actually purchased. Second,
ber). This is consonant with the finding reported by whilst research with nonhuman subjects is typically
Foxall and James (2003) in the case of single butter limited to only one choice on each occasion, con-
purchaser who deviated from her usual highly-price sumers are able to purchase more than one brand
sensitive pattern of choice on occasion simply in order even on a single shopping trip. As is apparent from
to obtain the flavor advantages of a premium-priced Figs. 5 and 6, for seven products, consumers in
brand. the aggregate maximized by purchasing the favorite
(cheapest) brand (Brand A); for two products, how-
3.1.2. Relative demand ever (cheese and margarine), this pattern was not
The expectation that logarithmically plotted de- found. This same overall pattern was found for both
mand curves would show consumption to be a pos- the VR and the FR schedules. However, even
itively decelerating function of unit price (Madden for the seven product categories where consumers
et al., 2000) was generally though not universally maximized by purchasing Brand A, there is a com-
substantiated. Relative demand curves for 6 of the plication which arises from the nature of consumer
9 product categories are, as expected, downward choice in the marketplace and which is not encoun-
sloping, though that for butter is approximately hor- tered in laboratory research with either human or
izontal; three were upward sloping (Figs. 3 and nonhuman animals in which choice is constrained.
4, Table 4). Moreover, while the curve for baked Although most consumers maximized in the sense
beans (which were identified as anomalous with that they purchased the cheapest brand within their
respect to matching) is positively decelerating, the consideration set, many also purchased a second
R2 and beta parameters indicate a weak relation- brand priced substantially higher on the same occa-
ship between relative price and relative quantity de- sion. The maximization analyses undertaken based
manded, which is in keeping with the interpretation on the behavioral economics literature was thus in-
of consumers brand perceptions advanced above. capable of indicating comprehensively the pattern
Although the results are generally in line with the ex- of consumer brand choices in relation to a simple
pected pricequantity relationship, the wide dispersal value-for-money criterion. (The diagonal lines in
of data points reflected in the many low values of R2 Figs. 5 and 6 indicate the distribution of data points
and beta suggest that more precise methods be sought that would have occurred if consumers had exhibited
for the demonstration of pricedemand associa- probability matching. By contrast, the step function
tions. indicated by the vertical distribution of data points
indicates a consistent preference for one or other
3.1.3. Maximization alternative.)
The maximization analysis indicates that most These patterns of choice are consistent with find-
consumers consistently chose the cheapest brand on ings reported in the consumer research and marketing
each shopping occasion regardless of product cat- literatures on branding which portray consumers
egory (Figs. 5 and 6, Table 5). This is consistent consideration sets as a function of the level of qual-
with the behavioral economics approach pioneered ity required for a variety of consumption settings.
by Herrnstein and Loveland (1975), Herrnstein and It was these broader considerations that led to the
Vaughan (1980), but close examination of the results suggestion that consumers maximize some combi-
reveals a more complicated pattern of choice than nation of utilitarian and informational reinforcement
is apparent in the studies of nonhumans undertaken and which resulted in the following more detailed
by those authors. First, whilst consumers generally analyses.
Amount Bought Ratio (logarithms)

Amount Bought Ratio (logarithms)

Amount Bought Ratio (logarithms)

248
Baked Beans Cookies Butter
0.1
0.3 -0.8
-0.3
0.1
-1.2
-0.1 -0.7
-1.6
-0.3 -1.1
-0.5 -2.0
-1.5
-0.155 -0.130-0.105-0.080-0.055 -0.030-0.005 0.020 -0.385 -0.360-0.335-0.310-0.285-0.260-0.235-0.210 -0.226 -0.221 -0.216 -0.211

G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260


Average Price Ratio(logarithms) Average Price Ratio(logarithms) Average Price Ratio(logarithms)

Cheese Coffee

Amount Bought Ratio (logarithms)

Amount Bought Ratio (logarithms) Amount Bought Ratio (logarithms)


Amount Bought Ratio (logarithms) Amount Bought Ratio (logarithms)

Cereals
-0.6
-0.6
-0.2
-0.8
-1.0 -0.4
-1.0
-0.6
-1.4
-1.2 -0.8

-1.0
-1.4 -1.8
-0.185 -0.160 -0.135 -0.110 -0.085 -0.060 -0.035
-0.255 -0.230 -0.205 -0.180 -0.155 -0.130 -0.105 -0.3 -0.2 -0.1 0.0 0.1
Average Price Ratio(logarithms) Average Price Ratio(logarithms) Average Price Ratio(logarithms)
Amount Bought Ratio (logarithms)

Fruit Juice Margarine


Tea
-0.6
-0.4 -0.3
-0.8
-0.8 -1.0
-0.7
-1.2
-1.2
-1.4 -1.1

-1.6 -1.6
-1.5
-0.39 -0.37 -0.35 -0.33 -0.31 -0.05 0.00 0.05 0.10 0.15 -0.09 -0.07 -0.05 -0.03 -0.01 0.01
Average Price Ratio(logarithms) Average Price Ratio(logarithms) Average Price Ratio(logarithms)

Fig. 3. Relative demand analysis: FR schedules. Amount bought ratio as a function of average price ratio for all 9 product types (all data are aggregated across purchasers
within a product category).
Amount Bought Ratio (logarithms)

Amount Bought Ratio (logarithms)

Amount Bought Ratio (logarithms)


Baked Beans Butter
Cookies
-0.9
0.05 -0.2
-1.0
0.00 -1.1 -0.4

-0.05 -1.2 -0.6


-1.3
-0.10 -0.8
-1.4
-0.15 -1.5 -1.0

-0.13 0.11 -0.09 -0.07 -0.05 -0.03 -0.01 -0.29 -0.28 -0.27 -0.26 -0.25 -0.24 -0.222 -0.221 -0.220 -0.219 -0.218 -0.217 -0.216

G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260


Average Price Ratio (logarithms) Average Price Ratio (logarithms) Average Price Ratio (logarithms)

Amount Bought Ratio (logarithms)

Amount Bought Ratio (logarithms)


Amount Bought Ratio (logarithms)

Cereals Cheese Coffee

-0.8
-0.3
-0.85
-0.9

-0.90 -0.4
-1.0

-0.95 -1.1 -0.5

-1.00 -1.2
-0.6
-0.18 -0.17-0.16-0.15-0.14-0.13-0.12 -0.03 -0.01 0.01 0.03 0.05 0.07 -0.12 -0.10 -0.08 -0.06 -0.04
Average Price Ratio (logarithms) Average Price Ratio (logarithms) Average Price Ratio (logarithms)
Amount Bought Ratio (logarithms)

Margarine

Amount Bought Ratio (logarithms)


Amount Bought Ratio (logarithms)

Fruit Juice Tea

-0.4 -0.85 -0.50

-0.5 -0.90 -0.55

-0.6 -0.95 -0.60

-0.65
-0.7 -1.00
-0.70
-0.8 -1.05
-0.75
-0.9 -1.10
-0.80
-0.40 -0.39-0.38-0.37-0.36-0.35-0.34 -0.015 0.010 0.035 0.060 0.085 0.110 0.135 0.160 -0.048 -0.046 -0.044 -0.042 -0.040 -0.038 -0.036
Average Price Ratio (logarithms) Average Price Ratio (logarithms) Average Price Ratio (logarithms)

Fig. 4. Relative demand analysis: VR schedules. Amount bought ratio as a function of average price ratio for all 9 product types (all data are aggregated across purchasers

249
within a product category).
250
Baked Beans Cookies Butter
2.5 1.0

Amount Bought Ratio

Amount Bought Ratio

Amount Bought Ratio


0.20
2.0 0.8
0.15
1.5 0.6
0.10
1.0 0.4
0.05 0.2
0.5
0.00 0.0
0.0
0.0 0.2 0.4 0.6 0.8 1.0 0.0 0.2 0.4 0.6 0.8 1.0 0.0 0.2 0.4 0.6 0.8 1.0

G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260


Relative probability of reinforcement Relative probability of reinforcement Relative probability of reinforcement
Cereals Cheese Coffee
1.2
Amount Bought Ratio

Amount Bought Ratio

Amount Bought Ratio


0.21 0.3
1.0
0.16 0.2 0.8

0.6
0.11 0.1
0.4

0.06 0.2
0.0
0.0
0.0 0.2 0.4 0.6 0.8 1.0 0.0 0.2 0.4 0.6 0.8 1.0 0.0 0.2 0.4 0.6 0.8 1.0
Relative probability of reinforcement Relative probability of reinforcement Relative probability of reinforcement
Margarine Tea
Fruit Juice

0.6 0.25
Amount Bought Ratio

Amount Bought Ratio

Amount Bought Ratio


0.5 0.6
0.20
0.4
0.15 0.4
0.3
0.2 0.10
0.2
0.1 0.05
0.0 0.0
0.00
0.0 0.2 0.4 0.6 0.8 1.0 0.0 0.2 0.4 0.6 0.8 1.0 0.0 0.2 0.4 0.6 0.8 1.0
Relative probability of reinforcement Relative probability of reinforcement Relative probability of reinforcement

Fig. 5. Maximization analysis: FR schedules. Amount bought ratio as a function of the relative probability of reinforcement for all 9 product types (all data are aggregated
across purchasers within a product category).
Baked Beans Cookies Butter

1.2 0.12

Amount Bought Ratio

Amount Bought Ratio

Amount Bought Ratio


0.8

0.10 0.6
1.0
0.08
0.4
0.8 0.06
0.2
0.04
0.6 0.0
0.0 0.2 0.4 0.6 0.8 1.0 0.0 0.2 0.4 0.6 0.8 1.0 0.0 0.2 0.4 0.6 0.8 1.0

G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260


Relative probability of reinforcement Relative probability of reinforcement Relative probability of reinforcement
Cereals Cheese Coffee

0.15 0.15
Amount Bought Ratio

Amount Bought Ratio

Amount Bought Ratio


0.51
0.14 0.13
0.13 0.11 0.41

0.12 0.09

0.11 0.31
0.07

0.10 0.05
0.21
0.0 0.2 0.4 0.6 0.8 1.0 0.0 0.2 0.4 0.6 0.8 1.0 0.0 0.2 0.4 0.6 0.8 1.0
Relative probability of reinforcement Relative probability of reinforcement Relative probability of reinforcement
Fruit Juice Margarine Tea
Amount Bought Ratio

Amount Bought Ratio

Amount Bought Ratio


0.35 0.14 0.30

0.30
0.12 0.25
0.25

0.20 0.10
0.20
0.15
0.08
0.10 0.15
0.0 0.2 0.4 0.6 0.8 1.0 0.0 0.2 0.4 0.6 0.8 1.0 0.0 0.2 0.4 0.6 0.8 1.0
Relative probability of reinforcement Relative probability of reinforcement Relative probability of reinforcement

Fig. 6. Maximization analysis: VR schedules. Amount bought ratio as a function of the relative probability of reinforcement for all 9 product types (all data are aggregated

251
across purchasers within a product category).
252 G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260

3.2. Individual patterns of choice across black, empty, and striped bars represent the percentage
informational reinforcement levels bought of brands classified at informational Levels 1,
2 and 3, respectively. Each vertical bar in the figure
To demonstrate how individuals choose across dif- represents data for one consumer. Data for individ-
ferent informational reinforcement levels, Fig. 7 shows ual consumers were plotted as a function of the aver-
the percentage of the total quantity of goods bought age price (total amount spent divided by total quantity
of brands at each informational level by each con- bought) paid by each consumer during the 16-week
sumer for each product category. In the figure, the period. Wider or narrower bars in the figure indicate

Fig. 7. Percentage of quantity purchased of brands at each informational level (Level 1: black bars; Level 2: empty bars; Level 3: striped
bars) by each consumer of each product category as a function of average price paid per consumer.
G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260 253

larger and smaller numbers of consumers included in 3.3. Consumer groups


the analysis of different product categories.
In general, increases in average price paid were as- These findings invite comparison of the buying pat-
sociated with decreases in the percentage of brands terns of consumers grouped by their predominant pur-
bought at Level 1 of informational reinforcement and chasing of brands having specific patterns of informa-
increases in the percentage of brands bought at Level tional and utilitarian reinforcement. Hence, consumers
3. Considering that the average brand price was one of were classified in one of six groups, derived from the
the criteria to classify brands at different informational combination of the three levels of informational and
levels, this may seem a trivial finding: clearly, by def- the two levels of utilitarian reinforcement, on the basis
inition, the more the consumers buy Level-3-brands of the informational-utilitarian level of the brands they
the higher should be the average price they paid. How- bought more frequently. The six groups were named as
ever, when one considers that the figure shows data for follows: Group 1Informational Level 1 and Utilitar-
individual consumers, some non-trivial findings can ian Level 1; Group 2Informational Level 1 and Util-
be noted. First, it becomes clear that most consumers itarian Level 2; Group 3Informational Level 2 and
bought mostly brands at one particular informational Utilitarian Level 1; Group 4Informational Level 2
level, rather than across all levels. The percentage of and Utilitarian Level 2; Group 5Informational Level
consumers who bought 70% or more of goods at one 3 and Utilitarian Level 1; and Group 6Informational
particular informational level is: for baked beans 92%, Level 3 and Utilitarian Level 2.
tea 91%, coffee 84%, margarine 84%, butter 81%, ce- Groups buying patterns were compared in terms of
reals 68%, fruit juice 68%, cheese 64%, and cookies elasticity of demand, using the equation:
58%. This indicates that the majority of consumers
make 70% or more of their purchases within one par- log Quantity = a b(log Price) (2)
ticular informational level.
A second non-trivial aspect of the data is the fact as suggested by Kagel et al. (1995). Some modifica-
that, when buying across informational levels, con- tions of the measures of quantity and price were nec-
sumers tend to buy more brands at adjacent informa- essary for the following reasons. First, price variation
tional levels than at more distant levels (e.g., buying throughout the 16-week period was not very wide and
Levels 1 and 2 more than Levels 1 and 3). A third can be expected to be even less so within each con-
relevant tendency shown in the figure is the wide dif- sumer group, since the classification of individuals in
ference in the average price paid across consumers, such groups was dependent upon the informational
with some consumers buying mostly the cheapest level of the brands they bought most frequently,
brands while others bought the most expensive ones. which in turn were classified in part based on their
This finding could be deduced from the patterns of average price. Therefore, each consumer group can
buying mostly brands at the same informational level, be expected to have a different price average within
just described above, but it is not a trivial one, for a relatively restricted range of prices. Second, the
it suggests that consumers brand-repertoires may be analysis of purchases of brands by a particular con-
influenced by economic variables such as consumers sumer group for each product category would reduce
budget. This has not been reported in the literature dramatically the number of data points available to
that describes consumers multi-brand buying pat- calculate price elasticities. For example, in the case of
terns. Similar analyses also indicate that, for 8 of 9 baked beans, there was no consumer classified in con-
product categories, most consumers also made the sumer Group 2, which would restrict the analysis for
large majority of their purchases within the same level the product category. One possible solution for this
of utilitarian reinforcement. The percentage of con- problem would be to aggregate all the data obtained
sumers that bought 70% or more of brands belonging from all the products and then calculate price elastic-
to the same utilitarian level is: for butter 91%, baked ities for each consumer group. This solution would
beans 85%, coffee 84%, tea 84%, cheese 82%, fruit pose another type of measurement problem. Consid-
juice 77%, margarine 74%, cereals 66%, and cookies, ering that the measurement scales (and even units)
42%. of quantity and price varied greatly among product
254 G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260

categories, it would be difficult to calculate one single uct categories. The same was done with the data for
regression line using data from different products. the other five consumer groups (the number of paired
One way of overcoming all such problems would data points, N, for the six groups ranged from 179 to
be to use measures of quantity and price relative to 897).
the average of each consumer group (e.g., Bell et al., The results are shown in Table 6. All regressions,
1999). These relative measures can be calculated by di- using the above equation (calculated with relative
viding the quantities bought (and prices paid) on each measures of quantity and price), were statistically
purchase by the average quantity bought (and aver- significant (i.e., P < 0.000 for all groups). The values
age price paid) of each product within each consumer of R2 were not very large and ranged from 0.22 to
group. The resulting data would provide an estimate of 0.46, indicating that other variables that did not enter
price elasticity relative to the consumer group mean, the equation also influenced the quantities consumers
that is, it would provide an estimate of changes in bought. The values of standard error were all 10 or
quantities as a function of changes in prices above and more times smaller than the corresponding coeffi-
below the mean of each consumer group. Data from cients of price elasticity, b, suggesting accurate esti-
each product would be standardized to the prod- mations of the latter. All price elasticity coefficients
uct mean for each group, yielding unitless ratio val- were negative indicating that the quantity consumers
ues above and below 1.0. Data from all products and bought tended to decrease with increases in price.
groups would become comparable in terms of respon- Moreover, all coefficient values were between 0 and
siveness around the mean. 1.0, indicating that demand was inelastic for all
This procedure was adopted in the analyses de- consumer groups. Despite these similarities, the abso-
scribed next. Each quantity data point for the regres- lute values of elasticity coefficients, shown in Fig. 8,
sion was calculated by dividing the quantity bought were lower for the extreme groups, Groups 1 and 6,
on a shopping occasion by the average quantity for than for the other groups, suggesting that consumers
that specific consumer group for that specific product. that buy predominantly intermediate-level brands
Analogously, each price data point for the regression showed higher price responsiveness than those buying
consisted of the price paid on a given shopping oc- predominantly the least- and highest-differentiated
casion divided by the average price paid by that spe- brands (split-sample reliability analyses confirm this
cific group when buying that specific product. Then, trend).
for example, the quantity bought of Tesco Value in-
stant coffee by a specific consumer on a given shop- 3.4. Intra- and inter-brand elasticities
ping trip was divided by the average quantity of in-
stant coffee bought by all consumers in Group 1 (In- The observed decreases in the quantity bought with
formational and Utilitarian Level 1). This same proce- increases in prices, indicated by negative elasticity
dure was used to calculate the correspondent measures coefficients, may, however, have been associated with
of price. A regression analysis was then conducted different response patterns by different groups. The
with all data points obtained for all consumers classi- tendency to buy larger quantities when prices are
fied in Group 1, including data points from all prod- lower may be related to one or more of the follow-

Table 6
Parameters of equation (log Quantity = a b(log Price)), calculated for each consumer group, the significance level of the regression (P),
and the standard error of the estimate of b
Consumer group R2 a b S.E. P

Group 1 0.22 0.13 0.50 0.038 <0.000


Group 2 0.42 0.15 0.86 0.076 <0.000
Group 3 0.46 0.17 0.73 0.027 <0.000
Group 4 0.35 0.13 0.59 0.030 <0.000
Group 5 0.25 0.12 0.66 0.041 <0.000
Group 6 0.22 0.06 0.41 0.033 <0.000
G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260 255

.9

.8

.7

.6
Price Elasticity Coefficients

.5

.4

.3

.2

.1

0.0
0 1 2 3 4 5 6
Informational/Utilitarian Consumer Group

Fig. 8. Price elasticity coefficients calculated for each group of consumers classified according to the informational and utilitarian level of
the brands they predominantly purchased.

ing three patterns: (1) buying larger quantities of a purchased brands, that is,
product when its price was below its usual, average,
price rather than when its price was above its aver- log Quantity = a b1(log Intra-Brand Price)
age price (i.e., intra-brand or absolute elasticity); (2) b2(log Informational Level)
buying larger quantities when buying brands belong-
b3(log Utilitarian Level) (3)
ing to cheaper, lower informational levels than when
buying brands belonging to more expensive, higher Intra-brand price was obtained by dividing the
informational levels (i.e., informational inter-brand price paid for the brand by the average price for that
or relative elasticity); and (3) buying larger quanti- same brand in the sample. Relative values of quantity,
ties when buying brands belonging to cheaper, lower intra-brand price, informational level and utilitarian
utilitarian levels than when buying brands belonging level with respect to their respective consumer group
to more expensive, higher utilitarian levels (i.e., util- averages, analogous to those used to obtain global
itarian inter-brand or relative elasticity). One way of elasticity coefficients, were used. Regression coeffi-
measuring such patterns is to decompose the global cients were obtained for each consumer group.
price elasticity coefficient into three different coeffi- The results are summarized in Table 7. All regres-
cients, namely, intra-brand, informational inter-brand, sions were statistically significant (i.e., P < 0.000 for
and utilitarian inter-brand coefficients. This analysis b1 for all groups). The values of R2 were not very large
would yield an equation in which the quantity bought and ranged from 0.06 to 0.36, indicating that other
would be a function of intra-brand changes in price, variables that did not enter the equation also influenced
informational reinforcement levels of the purchased the quantities consumers bought. Only three, out of 18,
brands, and the utilitarian reinforcement levels of the values of standard error were 10 or more times smaller
256 G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260

Table 7
Parameters of log Quantity = a b1(log Intra-Brand Price) b2(log Informational Level) b3(log Utilitarian Level), calculated for each
consumer group, the significance level of the regression (P), and the standard error of the estimates of b1, b2, and b3
Consumer group R2 a b1 S.E. P b2 S.E. P b3 S.E. P

Group 1 0.17 0.11 0.53 0.084 <0.000 0.33 0.061 <0.000 0.61 0.082 <0.000
Group 2 0.36 0.13 1.51 0.252 <0.000 0.84 0.113 <0.000 0.32 0.141 0.024
Group 3 0.30 0.13 0.92 0.067 <0.000 0.52 0.078 <0.000 0.72 0.063 <0.000
Group 4 0.15 0.10 0.74 0.078 <0.000 0.39 0.072 <0.000 0.24 0.070 0.001
Group 5 0.21 0.12 0.70 0.063 <0.000 0.29 0.080 <0.000 0.69 0.074 <0.000
Group 6 0.06 0.05 0.58 0.117 <0.000 0.09 0.083 0.291 0.23 0.074 0.002

than the corresponding coefficients of price elastic- utilitarian level. Moreover, with the exception of the
ity, b, suggesting that coefficient estimations were not intra-brand coefficient for Group 2 (1.51), all coeffi-
very accurate (although split-sample reliability anal- cient values were between 0 and 1.0, indicating that
yses corroborated the observed patterns). Collinearity all three types of demand tended to be inelastic for all
analyses yielded values of tolerance and variance in- consumer groups. Despite such similarities, the abso-
flation factor close to 1.00, suggesting that there was lute values of intra-brand, informational inter-brand,
no significant covariance among variables included in and utilitarian inter-brand elasticity coefficients dif-
the equation (Hair et al., 1995). All price elasticity fered across consumer groups, as shown in Fig. 9.
coefficients were negative indicating that the quantity Intra-brand elasticity coefficients were lower for
consumers bought tended to decrease with increases in Groups 1 and 6 than for the intermediate groups, show-
intra-brand price variations, informational level, and ing a decreasing trend from Group 2 to Group 6.

1.6

1.4

1.2
intra-brand
Price Elasticity Coefficients

1.0

.8

.6 utilitarian

.4

.2
informational
0.0
0 1 2 3 4 5 6

Informational/Utilitarian Consumer Group

Fig. 9. Intra-brand, informational inter-brand and utilitarian inter-brand price elasticity coefficients calculated for each group of consumers,
classified on the basis of the informational/utilitarian level of brands they predominantly purchased.
G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260 257

This suggests that consumers buying predominantly do not seem to vary much the quantities they buy as a
the cheapest, least-differentiated brands (i.e., Group 1) function of utilitarian brand level. Hence, the utilitar-
do not change much the quantity they buy as a func- ian inter-brand elasticities followed a slightly different
tion of changes in brand price relative to their usual pattern from the informational inter-brand elastici-
(average) price. This result suggests a tendency to- ties, though like them they were mostly smaller than
ward buying the cheapest brands, irrespective of other, intra-brand elasticities. Group 1 is the only exception
slightly more expensive, brands. If this interpretation with a coefficient larger than that of the intra-brand
is correct, the observed pattern for intra-brand elas- elasticities, if only marginally. Whereas the other two
ticity, which was largest for Group 2 and decreased curves follow a similar pattern, the shape of the util-
systematically as group classification increased up to itarian curve is different in that it follows a zigzag
Group 6, can be interpreted as suggesting that respon- course with Group 2 showing a lower coefficient than
siveness to intra-brand changes in price decreases as Groups 1 and 3, and similarly Groups 4 and 6 dis-
group classification increases. In other words, if the playing a lower coefficient than their neighbor groups.
low intra-brand elasticity observed for Group 1 is a The implications of this pattern are more complicated
consequence of buying the cheapest brands most of because it suggests that consumers buying mostly at
the time, these findings point to the conclusion that utilitarian Level 1, i.e., Groups 1, 3 and 5, are more
as the level of differentiation of the purchased brands sensitive to changes in utilitarian level than consumers
increases (i.e., as the price of purchased brands in- with a preference for utilitarian Level 2, independent
creases), the responsiveness of consumers to changes of the informational level of the brand. For example,
in prices decreases. consumers who mostly buy the least-differentiated,
Informational inter-brand elasticities were smaller cheapest brands (i.e., Group 1) are more likely to buy
than intra-brand elasticities for all six groups and fol- larger quantities than consumers who buy at but a
lowed a similar pattern, with Group 1 showing a low higher utilitarian but at the same informational level
coefficient, Group 2 showing the largest one which (i.e., Group 2). Consumers of Group 3 however, with
decreases systematically with increases in group a lower utilitarian level than Groups 2 and 4 but a
classification up to Group 6. This suggests that con- higher informational level than Group 2 and the same
sumers buying mostly the least-differentiated, cheap- informational level as Group 4, is in turn more respon-
est brands do not change much the quantities they buy sive to utilitarian reinforcement than both Groups 2
as a function of informational brand level, whereas and 4.
the responsiveness to informational reinforcement of
those buying intermediate-level brands decreases sys-
tematically with increases in the informational level 4. General discussion
of the predominantly purchased brands. This value
is close to 0 for Group 6, suggesting that consumers As predicted by both matching theory and maxi-
that already usually buy the highest informational and mization theory, we have confirmed that choice on
utilitarian level brands are not sensitive to changes conc VR VR schedules exhibits both matching and
in informational level (similar to a satiation effect, maximizing. However, the examination of consumer
since satiated animals are not expected to be respon- choice in naturalistic environments raises a number
sive to food, i.e., to do things to get food). of complications for behavior analysis and behavioral
Utilitarian inter-brand elasticity, indicated by the economics that are not evident from the experimental
filled circles, was higher for the three groups that analysis of choice. While the realities of consumer be-
bought predominantly low utilitarian-level brands (i.e., havior in affluent, marketing-oriented economies have
Groups 1, 3 and 5) than for the other three that bought implications for behavioral economics, the techniques
high utilitarian-level brands. This finding indicates of analysis which behavioral economics makes avail-
that consumers who buy predominantly brands with able to the marketing researcher also elucidate the na-
low utilitarian levels tend also to buy smaller quan- ture of brand choice in the market place.
tities of higher utilitarian brands, whereas those that A common assumption in aggregate studies of con-
buy predominantly brands with high utilitarian levels sumer choice conducted by marketing scientists is that
258 G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260

brands within a product category are functional al- The consequent need to attend to non-price elements
ternatives and that consumers will include a brand of the marketing mix led us to the analyses of price
within their repertoire or purchase set only if it em- elasticity of demand which take into consideration
bodies the physical and functional benefits that are both the utilitarian (functional) and informational
common to all members of that category (Ehrenberg, (symbolic) benefits gained by consumers from the
1972, 1993). This proposition is seldom supported by brands they purchase and use.
empirical evidence. Although the discovery of match- The evidence is that consumers choose their reper-
ing on conc VR VR schedules is both expected and toire of brands on the basis of the informational and
perhaps in some respects trivial, it is important for utilitarian level of reinforcement programmed by the
the sort of analysis we have undertaken in that it con- brands. This is likely to be related, among other things,
firms that the alternative brands considered are indeed to their budgets, which we were not able to take into
substitutes in the assumed sense. The very-nearly per- consideration. However, it is also of marketing sig-
fect matching that we have found is a characteristic of nificance in that it provides opportunities for the par-
choices that are near-perfect substitutes (Kagel et al., titioning (segmentation) of markets. There do seem
1995). to be clearly definable segments based on combina-
Another common assumption in the marketing lit- tions of the utilitarian and symbolic benefits of pur-
erature is that price plays a relatively small part in chase and consumption and the cost minimization.
the determination of consumer choice: brands that These factors encourage consumers to choose brands
are highly differentiated by advertising command a within a given range defined in terms of these vari-
premium but the consumer is generally portrayed as ables. Most purchasing takes place within a fairly
relatively insensitive to such differentials. Non-price narrowly defined range and consumers who switch
elements of the marketing mix (i.e., promotional tac- out of that range generally move only to an adjacent
tics, brand attributes, and distribution strategies) are range.
thought to be more influential than price factors for af- Consumer groups, classified on the basis of the
fluent consumers operating within marketing-oriented informational/utilitarian level of the brands they buy
economies (Foxall, 1999b). The relative demand mostly, show different responsiveness to changes in
and maximization analyses, which were intended to prices, with extreme groups showing the lowest lev-
shed light on the sensitivity of consumer demand to els of responsiveness (possibly for different reasons).
price differentials among competing brands, present Price elasticities can be decomposed into intra-brand
an equivocal impression of the relationship between and at least two types of inter-brand elasticities, in-
market prices and quantity demanded. While Figs. 3 formational and utilitarian, according to the type of
and 4 indicate the expected relationship, denoted by reinforcing events that influence consumer choice.
downward-sloping relative demand curves, the evi- Intra-brand elasticity can be interpreted as a measure
dence for the remaining product categories is mixed. of responsiveness to the aversive consequences of
The maximization analysis suggests that consumers giving up money (Alhadeff, 1982). Therefore, choice
are in some respects sensitive to price levels when patterns can be interpreted as being determined by
making decisions about how much of a brand to different combinations of the tendencies to avoid
buy relative to other brands in the consideration set. aversive consequences, maximize informational re-
However, the interpretation of the data summarized inforcement and maximize utilitarian reinforcement.
in these figures and in Figs. 5 and 6 must include A pattern that minimizes financial loss, showing
the phenomenon of single shopping trip multi-brand minimum responsiveness to informational attributes
purchasing. Although a consumer may exhibit eco- and some to utilitarian ones, seems to characterize
nomically rational price sensitivity by purchasing the choices of consumers in Group 1. The responsiveness
cheapest brand in her consideration set, her general to informational and utilitarian attributes related to
sensitivity to price may be confounded by her pur- changes in price seems to be an inverse function of
chasing a premium-priced alternative at the same how much of these the consumer obtains regularly.
time. Hence, our results are equivocal on the question So, the results showed increasing responsiveness to
whether consumer brand choice is sensitive to price. informational reinforcement from Group 6 (who ob-
G.R. Foxall et al. / Behavioural Processes 66 (2004) 235260 259

tain higher levels of it) to Group 2 (who obtain lower Acknowledgements


levels of it). The same was observed for utilitarian
attributes, for those groups buying lower levels of util- We gratefully acknowledge grants (SGS/LB/0431/A
itarian attributes (Groups 1, 3, and 5) showed higher & SGS/00493/G/S1) from The Nuffield Foundation,
responsiveness to this aspect of the brands than those London, to Foxall in support of this research, and to
that buy higher levels of utilitarian attributes more CAPES and CNPq, Brazil, for financial support to
regularly (Groups 2, 4, and 6). Oliveira-Castro.
Elasticity coefficients can be interpreted as mea-
sures of consumer satiation level, since the less
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