Ⅰ. Introduction Existing research shows that disproportionately great amount of purchase is made by a heavy users than light users(Cook and Mindak 1984; Schmittlein, Cooper and Morrison 1993).
Twedt(1964) who has first investigated the difference in consumer purchase behavior based on their consumption quantity has reported that, on average, top 50% of the heavy users account for 80-90% of the purchases and consumptions in grocery product categories. As such, heavy users are one of the most important consumer segments and hence much of company's marketing efforts should be directed to these customers. Previous studies on consumption quantity have focused on identifying demographic characteristics of heavy and light users(e.g.,Bass, Tigert, and Lonsdale 1968; Frank, Massy, and Boyd 1967), or psychological motivations that drive their heavy usage behaviors(e.g., Goldsmith and d'Hauteville 1988). However,surprisingly little research has been undertaken to examine the important behavioral characteristics associated with heavy-user consumers. Therefore, the primary purpose of this research is to examine the relationship between consumption quantity and one of the most important purchase behavioral characteristic, namely variety seeking. We investigate this relationship at the household level. The specific hypothesis is that consumption amount shows a positive relationship with the amount of variety household takes into their purchase. We further propose that the relationship is due to the high average purchase quantity and short inter-purchase time.
Ⅱ. Theoretical Background and Hypotheses 1. Variety Seeking in Simultaneous Purchase Consumer variety seeking, defined as the tendency to choose different items when choosing multiple items at the same time, has received a great deal of attention in both psychology and marketing.Past research has shown that consumers tend to seek greater variety when purchasing the items simultaneously than sequentially(Read and Loewenstein 1995; Read et al.
2001; Simonson 1990; Simonson and Winer 1992). Such excessive pursuits of variety have been shown to lower actual consumption satisfaction. This is because in the pursuit of diversification, consumers tend to choose the options that offer a less than optimal utility and the options that deviate from ones' internal preference(Simonson 1990).
Several reasons have been proposed for consumers' excessive variety seeking. First, it is an attempt to reduce satiation associated with repeated consumption of the same items. However,in simultaneous purchase of multiple items, consumers tend to overestimate the satiation arising from future consumption experience, leading to excessive variety seeking(Read and Loewenstein 1995). Second, consumers' diversification is a strategy to hedge against the uncertain future preference. Choosing a variety of different items protect them from potential risk associated with changes in preference. Third, it is also an attempt to satisfy multiple needs.
McAlister and Pessemier(1982) stated multiple users, multiple situations, and multiple uses, as the three examples of the multiple needs that are often associated with product consumption.
As shown in the aforementioned examples, variety-seeking behavior has been analyzed at an individual customer level and little attempt has been made to examine households'variety-seeking tendency. Therefore, the present research investigates the relationship between the total consumption amount and degree to which household seeks variety in their purchase.
Further we examine the mediating mechanism driving the effect.
2. Hypotheses We hypothesize that household differs by total amount of purchase they make and the total purchase volume is positively related with the amount of variety sought by households. That is, heavy-user household, as opposed to light-users, are likely to seek a greater variety. We assume that the proposed effect is mediated by the increased basket size(purchase amount in one shopping occasion) and reduced interpurchase time(time gap between two adjacent shopping).
First, heavy-user households are likely to purchase a larger amount of items in a given shopping occasion and this larger basket size leads to greater diversification. As stated before,one motivation for diversification is to avoid satiation generated from the repeat purchase. We predict that imagined satiation at purchase time will be greater as the purchase quantity increases(Simonson 1990; Simonson and Winer 1992). Second, consumers' pursuit of variety is to hedge against uncertain future preference. Such preference uncertainty will also increase as the size of basket is bigger. Lastly, consumer's diversification motivation arises from goal to satisfy multiple consumption needs. Large basket size implies that the products are more likely to be used in a variety of situations, by multiple users, and for different purposes.
Second, we expect that the effect of total purchase quantity on variety seeking is also mediated by interpurchase time gap(i.e., how long it took the household to purchase the same product subsequent to the previous purchase). We speculate that there will be a shorter interpurchase time for heavy-user(vs. light-user) households for the same quantity of purchased items(Jen, Chou and Allenby 2003). That is, even if households buy the same number of items at the current purchase occasion, the heavy-usage household will consume the items quicker hence, their next purchase will take place sooner(i.e., shorter interpurchase time). Heavy users who consume the same amount at a relatively faster pace will feel greater satiation during the consumption and this will lead to a greater pursuit of variety in the subsequent shopping occasion.
All these taken together, it is reasonable to expect a positive relationship between the total consumption amount and the level of variety pursued by household.
H1: At household level, as the totalquantity of purchase increases the level of variety seeking will increase.
H2a: The effect proposed in H1 will be mediated by the average purchase quantity in each shopping episode.
H2b: The effect proposed in H1 will be mediated by the interpurchase time gap.
Ⅲ. Methodology: Data To test our hypotheses we used 3-year period instant noodle purchase data provided from TNS. The data includes purchase record of 1,119 households who have purchased instant noodle at least 5 times during the year 2001 to 2004. The data was based on panel purchase diary and includes the region, the age of the head of the household, income of the household,and number of people in the household. On average, each household purchased 50.48 times and the average total purchased unit was 380.8. The average purchase at each shopping occasion was 7.66 units. The variety seeking was defined as the number of times household purchased more than two different instant noodles(different brands or different flavors). The household level variety seeking was computed as the number of variety seeking divided by the total number of occasions wheremultiple units were bought.
Ⅳ. Results 1. The Total Purchase Quantity and Variety Seeking(H1)H1 was tested by both a simple regression(Regression 1) and a multiple regression (Regression 2). In a simple regression, total purchase volume had a positive relation with variety seeking(b=.11, t=13.59, p<.01). In a multiple regression, variety seeking was regressed on total purchase volume, size of household, income of household, and age of household head. The results are presented in Table 1. The results show that household income(b=.02,t=2.85, p<.01) and age (b=-.03, t=-4.94, p<.01) had significant relation with variety seeking.
However, the household size did not have any impact on variety seeking(b=.01, t=1.54,p=.12). More importantly, after controlling for these variables, the total purchase amount had a positive impact on the level of variety sought by household(b=.11, t=12.51, p<.01). This provides evidence supporting H1.
2. The Mediating Role of Basket Size and Interpurchase Time(H2)H2 was tested by a path analysis including the following variables: variety seeking, total amount of purchase, average amount of purchase, interpurchase time gap, size of household,income of household, and age of household. As <Table 2> and <Figure 1> show, both average amount of purchase and the inter-purchase time served as a significant mediator for the effect of total purchase quantity on variety seeking. This shows evidence supporting H2a and H2b.
Ⅴ. Conclusion The findings the current research add to the existing literature on consumer variety seeking in several ways. First, this is one of the first studies that investigates diversification behavior at the household level. While great deal of attention has been paid to this topic, the primary focus of the past research was on the behavior of individual consumers, rather than a group.
Given that many products, such as the one we used in our study, are purchased and consumed collectively by multiple members in the household, more analysis should be done at the household level. Second, we not only find the significant relation between total consumption quantity and diversification, but also reveal the mechanism underlying the effect. Specifically,we proposed and showed that the effect of consumption amount on variety seeking is mediated by average purchase quantity and also by interpurchase time. We believe that the present investigation offers an important take-away for marketing managers in the field. One such implication is related to the creation of product line. One of the important decisions faced by marketing manager is how much variety should be included in the product line. The present findings show that the decision should incorporate the knowledge regarding the purchase quantity of the target household consumers. Construction of the product line consisting of diverse flavors and variants should be a more effective strategy when the target household is characterized by a large average purchase and relatively fast consumption.
Conversely, companies whose main target households are light users of the products, focusing on one or two major brand, rather than extending the line, would be a sound decision.
Additionally, our follow-up analysis revealed that the heavy users tend to shop mostly at large supermarkets or discount stores. Therefore, variant products or variety-pack products should be placed mostly in these stores rather than on-line shops or small offline stores.
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