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The Impact of Promotion and Advertising: A Latent Class Approach

Published online by Cambridge University Press:  28 April 2015

Timothy J. Richards
Timothy J. Richards*
Affiliation:
Morrison School of Agribusiness, Arizona State University East
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Abstract

Typically, marketers define market segments by their demographic characteristics, assuming that these segments represent consumers with relatively homogeneous buying patterns. A more managerially useful definition, however, groups consumers of similar behavior directly and then seeks to find demographic commonalities among them. This study uses a latent class analysis technique to segment consumers based on their responsiveness to a set of marketing variables, finding that a multiple-segment model provides a better fit to the data, and that these segments differ significantly in their responsiveness. By targeting marketing activities to their most responsive segments, the efficiency of commodity promotion can be dramatically improved.

Keywords

advertisingappledemandlatent class analysismultinomial logitsegmentation
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 32 , Issue 3 , December 2000 , pp. 441 - 457
Copyright
Copyright © Southern Agricultural Economics Association 2000

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