Quantitative Models In Marketing Research

This page intentionally left blank Quantitative Models in Marketing Research Recent advances in data collection and data storage techniques enable marketing researchers to study the characteristics of a large range of transactions and purchases, in particular the effects of household-specific characteristics and marketing-mix variables. This book presents the most important and practically relevant quantitative models for marketing research. Each model is presented in detail with a self-contained discussion, which includes: a demonstration of the mechanics of the model, empirical analysis, real-world examples, and interpretation of results and findings. The reader of the book will learn how to apply the techniques, as well as understand the latest methodological developments in the academic literature. Pathways are offered in the book for students and practitioners with differing statistical and mathematical skill levels, although a basic knowledge of elementary numerical techniques is assumed. PHILIP HANS FRANSES is Professor of Applied Econometrics affiliated with the Econometric Institute and Professor of Marketing Research affiliated with the Department of Marketing and Organization, both at Erasmus University Rotterdam. He has written successful textbooks in time series analysis. RICHARD PAAP is Postdoctoral Researcher with the Rotterdam Institute for Business Economic Studies at Erasmus University Rotterdam. His research interests cover applied (macro-)econometrics, Bayesian statistics, time series analysis, and marketing research. Quantitative Models in Marketing Research Philip Hans Franses and Richard Paap           The Pitt Building, Trumpington Street, Cambridge, United Kingdom    The Edinburgh Building, Cambridge CB2 2RU, UK 40 West 20th Street, New York, NY 10011-4211, USA 477 Williamstown Road, Port Melbourne, VIC 3207, Australia Ruiz de Alarcón 13, 28014 Madrid, Spain Dock House, The Waterfront, Cape Town 8001, South Africa http://www.cambridge.org © Philip Hans Franses and Richard Paap 2004 First published in printed format 2001 ISBN 0-511-03237-4 eBook (Adobe Reader) ISBN 0-521-80166-4 hardback Contents List of figures List of tables Preface 1 Introduction and outline of the book 1.1 Introduction 1.1.1 On marketing research 1.1.2 Data 1.1.3 Models 1.2 Outline of the book 1.2.1 How to use this book 1.2.2 Outline of chapter contents page ix xi xiii 1 1 2 4 5 6 6 7 2 Features of marketing research data 2.1 Quantitative models 2.2 Marketing performance measures 2.2.1 A continuous variable 2.2.2 A binomial variable 2.2.3 An unordered multinomial variable 2.2.4 An ordered multinomial variable 2.2.5 A limited continuous variable 2.2.6 A duration variable 2.2.7 Summary 2.3 What do we exclude from this book? 10 10 12 13 15 18 19 21 24 26 26 3 A continuous dependent variable 3.1 The standard Linear Regression model 3.2 Estimation 3.2.1 Estimation by Ordinary Least Squares 3.2.2 Estimation by Maximum Likelihood 29 29 34 34 35 v vi Contents 3.3 3.4 3.5 Diagnostics, model selection and forecasting 3.3.1 Diagnostics 3.3.2 Model selection 3.3.3 Forec