IDEAS home Printed from https://ideas.repec.org/a/eee/joreco/v15y2008i1p52-62.html
   My bibliography  Save this article

The use of loyalty-cards databases: Differences in regular price and discount sensitivity in the brand choice decision between card and non-card holders

Author

Listed:
  • Cortiñas, Mónica
  • Elorz, Margarita
  • Múgica, José Miguel

Abstract

In the retail food sector, databases generated by customer loyalty programs are becoming increasingly important. The information stored in them helps retailers’ decisions relating to pricing policies, promotions, inventories and category management in general. This paper analyzes the data on loyalty-card holders for 10 different product categories using multinomial logit models, and finds that the brand choice information may not be applicable to all purchases made in the outlet. Loyalty-card holders exhibit some distinctive behavior. When there are differences, card holders are less sensitive to regular prices, but they are more sensitive for price promotions in certain product categories.

Suggested Citation

  • Cortiñas, Mónica & Elorz, Margarita & Múgica, José Miguel, 2008. "The use of loyalty-cards databases: Differences in regular price and discount sensitivity in the brand choice decision between card and non-card holders," Journal of Retailing and Consumer Services, Elsevier, vol. 15(1), pages 52-62.
    • Handle: RePEc:eee:joreco:v:15:y:2008:i:1:p:52-62
    DOI: 10.1016/j.jretconser.2007.03.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969698907000264
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jretconser.2007.03.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Greg Shaffer & Z. John Zhang, 2002. "Competitive One-to-One Promotions," Management Science, INFORMS, vol. 48(9), pages 1143-1160, September.
    2. Rajiv Lal & David Bell, 2003. "The Impact of Frequent Shopper Programs in Grocery Retailing," Quantitative Marketing and Economics (QME), Springer, vol. 1(2), pages 179-202, June.
    3. Peter M. Guadagni & John D. C. Little, 1983. "A Logit Model of Brand Choice Calibrated on Scanner Data," Marketing Science, INFORMS, vol. 2(3), pages 203-238.
    4. Alan L. Montgomery, 1997. "Creating Micro-Marketing Pricing Strategies Using Supermarket Scanner Data," Marketing Science, INFORMS, vol. 16(4), pages 315-337.
    5. Roger R. Betancourt, 2004. "The Economics of Retailing and Distribution," Books, Edward Elgar Publishing, number 3511.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. García Gómez, Blanca & Gutiérrez Arranz, Ana M & Gutiérrez Cillán, Jesús, 2012. "Drivers of customer likelihood to join grocery retail loyalty programs. An analysis of reward programs and loyalty cards," Journal of Retailing and Consumer Services, Elsevier, vol. 19(5), pages 492-500.
    2. Johan Lundberg & Sofia Lundberg, 2010. "Retailer choice and loyalty schemes—evidence from Sweden," Letters in Spatial and Resource Sciences, Springer, vol. 3(3), pages 137-146, October.
    3. Chen, Yanyan & Mandler, Timo & Meyer-Waarden, Lars, 2021. "Three decades of research on loyalty programs: A literature review and future research agenda," Journal of Business Research, Elsevier, vol. 124(C), pages 179-197.
    4. Demoulin, Nathalie T.M. & Zidda, Pietro, 2009. "Drivers of Customers’ Adoption and Adoption Timing of a New Loyalty Card in the Grocery Retail Market," Journal of Retailing, Elsevier, vol. 85(3), pages 391-405.
    5. Cloos, Janis & Mohr, Svenja, 2022. "Acceptance of data sharing in smartphone apps from key industries of the digital transformation: A representative population survey for Germany," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    6. Lu, Huidi & van der Lans, Ralf & Helsen, Kristiaan & Gauri, Dinesh K., 2023. "DEPART: Decomposing prices using atheoretical regression trees," International Journal of Research in Marketing, Elsevier, vol. 40(4), pages 781-800.
    7. Rucheva, A., 2015. "Determinants of joint supplier-retailer project performance in category management field," Working Papers 6423, Graduate School of Management, St. Petersburg State University.
    8. Rains, Tim & Longley, Paul, 2021. "The provenance of loyalty card data for urban and retail analytics," Journal of Retailing and Consumer Services, Elsevier, vol. 63(C).
    9. Alex Belli & Anne-Maree O’Rourke & François A. Carrillat & Ljubomir Pupovac & Valentyna Melnyk & Ekaterina Napolova, 2022. "40 years of loyalty programs: how effective are they? Generalizations from a meta-analysis," Journal of the Academy of Marketing Science, Springer, vol. 50(1), pages 147-173, January.
    10. Aaron Luntala Nsakanda & Moustapha Diaby & Yuheng Cao, 2011. "An aggregate inventory-based model for predicting redemption and liability in loyalty reward programs industry," Information Systems Frontiers, Springer, vol. 13(5), pages 707-719, November.
    11. Helgesen, Øyvind & Ivar Håvold, Jon & Nesset, Erik, 2010. "Impacts of store and chain images on the “quality–satisfaction–loyalty process†in petrol retailing," Journal of Retailing and Consumer Services, Elsevier, vol. 17(2), pages 109-118.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. B. P. S. Murthi & Sumit Sarkar, 2003. "The Role of the Management Sciences in Research on Personalization," Management Science, INFORMS, vol. 49(10), pages 1344-1362, October.
    2. Andrés Musalem & Yogesh V. Joshi, 2009. "—How Much Should You Invest in Each Customer Relationship? A Competitive Strategic Approach," Marketing Science, INFORMS, vol. 28(3), pages 555-565, 05-06.
    3. Ke-Wei Huang, 2009. "Optimal criteria for selecting price discrimination metrics when buyers have log-normally distributed willingness-to-pay," Quantitative Marketing and Economics (QME), Springer, vol. 7(3), pages 321-341, September.
    4. Sunil Gupta & Valarie Zeithaml, 2006. "Customer Metrics and Their Impact on Financial Performance," Marketing Science, INFORMS, vol. 25(6), pages 718-739, 11-12.
    5. Jean-Pierre Dubé, 2004. "Multiple Discreteness and Product Differentiation: Demand for Carbonated Soft Drinks," Marketing Science, INFORMS, vol. 23(1), pages 66-81, September.
    6. B. P. S. Murthi & Sumit Sarkar, 2003. "The Role of the Mangement Sciences in Research on Personalization," Review of Marketing Science Working Papers 2-2-1025, Berkeley Electronic Press.
    7. Alan L. Montgomery, 2001. "Applying Quantitative Marketing Techniques to the Internet," Interfaces, INFORMS, vol. 31(2), pages 90-108, April.
    8. Dobson, Paul W. & Waterson, Michael, 2008. "Chain-Store Competition: Customized vs. Uniform Pricing," Economic Research Papers 269789, University of Warwick - Department of Economics.
    9. Johnson, Joseph & Tellis, Gerard J. & Ip, Edward H., 2013. "To Whom, When, and How Much to Discount? A Constrained Optimization of Customized Temporal Discounts," Journal of Retailing, Elsevier, vol. 89(4), pages 361-373.
    10. Randolph E. Bucklin & Sunil Gupta, 1999. "Commercial Use of UPC Scanner Data: Industry and Academic Perspectives," Marketing Science, INFORMS, vol. 18(3), pages 247-273.
    11. Nanda Kumar & Ram Rao, 2006. "Research Note—Using Basket Composition Data for Intelligent Supermarket Pricing," Marketing Science, INFORMS, vol. 25(2), pages 188-199, 03-04.
    12. Venkatesh Shankar & Pablo Azar & Matthew Fuller, 2008. "—: A Multicategory Brand Equity Model and Its Application at Allstate," Marketing Science, INFORMS, vol. 27(4), pages 567-584, 07-08.
    13. Noah Gans & George Knox & Rachel Croson, 2007. "Simple Models of Discrete Choice and Their Performance in Bandit Experiments," Manufacturing & Service Operations Management, INFORMS, vol. 9(4), pages 383-408, December.
    14. Chen Zhou & Shrihari Sridhar & Rafael Becerril-Arreola & Tony Haitao Cui & Yan Dong, 2019. "Promotions as competitive reactions to recalls and their consequences," Journal of the Academy of Marketing Science, Springer, vol. 47(4), pages 702-722, July.
    15. David R. Bell & Jeongwen Chiang & V. Padmanabhan, 1999. "The Decomposition of Promotional Response: An Empirical Generalization," Marketing Science, INFORMS, vol. 18(4), pages 504-526.
    16. Polo, Yolanda & Sese, F. Javier & Verhoef, Peter C., 2011. "The Effect of Pricing and Advertising on Customer Retention in a Liberalizing Market," Journal of Interactive Marketing, Elsevier, vol. 25(4), pages 201-214.
    17. Dorotic, Matilda & Verhoef, Peter C. & Fok, Dennis & Bijmolt, Tammo H.A., 2014. "Reward redemption effects in a loyalty program when customers choose how much and when to redeem," International Journal of Research in Marketing, Elsevier, vol. 31(4), pages 339-355.
    18. Yücel, Eda & Karaesmen, Fikri & Salman, F. Sibel & Türkay, Metin, 2009. "Optimizing product assortment under customer-driven demand substitution," European Journal of Operational Research, Elsevier, vol. 199(3), pages 759-768, December.
    19. Andrés Elberg & Pedro M. Gardete & Rosario Macera & Carlos Noton, 2019. "Dynamic effects of price promotions: field evidence, consumer search, and supply-side implications," Quantitative Marketing and Economics (QME), Springer, vol. 17(1), pages 1-58, March.
    20. Yu Ding & Wayne S. DeSarbo & Dominique M. Hanssens & Kamel Jedidi & John G. Lynch & Donald R. Lehmann, 2020. "The past, present, and future of measurement and methods in marketing analysis," Marketing Letters, Springer, vol. 31(2), pages 175-186, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joreco:v:15:y:2008:i:1:p:52-62. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-retailing-and-consumer-services .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.