Accounting for Interaction and Individual Specific Effects in an Analysis of International Air Traveler Preferences
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Published
Mar 1, 2014
Abstract
selection decision based on contingency theory. Previous work has focused on main effects without eploring the significance of interaction or individual heterogeneity effects. Contingency theory suggests contextual and individual factors are important in enhancing model predictions. Using conjoint and ordered probit analyses, we find that including interaction and individual specific intercepts alters the impacts of main effect variables. Furthermore, accounting for interaction and individual heterogeneity increases the predictive ability of the preference model for airline travelers.
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Keywords
Air Travel PreferenceConsumer CharacteristicsCountry-of-OriginConjoint AnalysisInternational Marketing
References
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• Dodds, W., Monroe, K. B. and Grewal, D. (1991). Effects of price, brand, and store information on buyers’ product evaluations. Journal of Marketing Research, 27, August, pp. 307-19.
• Douglas, M. and Isherwood, B. (1979). The world of goods. eds. basic books inc: New York.
• Drazin, R. and Van de Ven A. (1985). Alternative forms of fit in contingency theory. Administrative Science Quarterly, 30, pp. 514-539.
• Elrod, T. and Winer, R. (1982). An empirical evaluation of aggregation approaches for developing market segments. Journal of Marketing, 46, Fall, pp. 67-74.
• Erdem, Ttilin, Kean, M.P., and Baohong, S. (2008). A dynamic model of brand choice when price and advertising signal product quality. Marketing Science, 27, 1111- 1125.
• Ferraro, R., Bettman, J.R and Chartrand T.L. (2009). The power of strangers: the effect of incidental consumer-brand encounters on brand choice. Journal of Consumer Research, 35 (5): 729-741.
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• Greene, W.H. (2001). Estimating econometric models with fixed effects. New York University, Leonard N. Stern School of Business, Department of Economics,Working Paper.
• Greene, W.H. (2004). The behaviour of the maximum likelihood estimator of limited dependent variable models in the presence of fixed effects. Econometrics Journal, 7, pp. 98-119.
• Gupta, S. and Chintagunta, P.K. (1994). On using demographic variables to determine segment membership in logit mixture models. Journal of Marketing Research, 31, February, pp. 128-136.
• Heslop, L. A. & Papadopoulos, N. (1992). But who knows where or when? Reflections on the images. In Product Country Images, edited by N. Papadopoulos and L. Heslop. USA: Hawthorn Press.
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• Kalyanam, K. and Putler, D.S. (1997). Incorporating demographic variables in brand choice models: an indivisible alternatives framework. Marketing Science, 16(2), pp. 166-81.
• Kumar, A. (2008). Age differences in mobile service perceptions: comparison of generation Y and baby boomers. Journal of Services Marketing, 22(7), pp. 568-577.
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• Levine, R. and Campbell, D. (1972). Ethnocentrism: theories of conflict, attitudes and group behavior. New York: John Wiley and Sons.
• Liechty, J.C., Fong, D.K.H. and DeSarbo, W.S. (2005). Dynamic models incorporating individual heterogeneity: utility evolution in conjoint analysis. Marketing Science, 24(2), pp. 285-293.
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• Meyers-Levy, J. and Maheswaran, D. (1991). Exploring differences in males’ and females’ processing strategies. Journal of Consumer Research, 18, June, pp. 63-70.
• Mittal, V. and Kamakura, W. (2001). Satisfaction, repurchase intent, and repurchase behavior: Investigating the moderating effects of customer characteristics. Journal of Marketing Research, 38 (February), 131-42.
• Mort, G. S. and Duncan, M. (2003). Owned by.’: country of origin’s new cue," journal of unternational consumer marketing, 15 (3), pp. 49-69.
• Moschis, G. P. and Churchill, G.A. (1978). Consumer socialization: a theoretical and empirical analysis. Journal of Marketing Research, 15, pp. 599-609.
• Moorthy, S. (2012). Can brand extension signal product quality? Marketing Science, 31:756-770
• Murthi, B.P.S., Haruvy, E. and Zhang, H. (2007). The effect of variability in price on consumer brand choice. Review of Marketing Science, 5(1), pages 4.
• Muthukrishnan, A.V. and Kardes, F.R. (2001). Persistent preferences for product attributes: the effects of the initial choice context and uninformative experience. Journal of Consumer Research, 28, June, pp. 89-104.
• Netemeyer, R.G.,Durvasula, S. and Lichtenstein, D.R. (1991). A cross-national assessment of the reliability and validity of the CETSCALE. Journal of Marketing Research, 28, August, pp. 320-327.
• Nevo, A. (2000). A practitioner’s guide to estimation of random-coefficients legit models of demand. Journal of Economics and Management Strategy, 9: 513-548
• Novak, T.P. & B. MacEvoy, B. (1990). On comparing alternative segmentation schemes: the list of values (LOV) and values and life styles (VALS). Journal of Consumer Research, 17, June, pp. 105-109.
• Nowaczyk, R. (1982). Sex-Related differences in the color lexicon. Language and Speech, 25, July-September, pp. 257-65.
• Okoroafo, S. (2010). Gender perceptions of family businesses’ marketing stimuli. International Journal of Marketing Studies, 2(1), pp. 3-12.
• Petzer, D. and De Meyer, C.F. (2011). The perceived service quality, satisfaction and behavioral intentions towards cell phone network service providers: a generational perspective. African Journal of Business Management, 5(17), pp. 7461-7473.
• Phillips, L. W. and Sternthal, B. (1977). Age differences in information processing: a perspective on the aged consumers. Journal of Marketing Research, 14, November, pp. 444-57. SAS Institute (2008). SASISTAT 9.2 User's Guide. Cary, NC.
• Sethuraman, R. and Cole, C. (1999). Factors influencing the price premiums that consumers pay fornational brands over store brands. Journal of Product and Brand Management, 8(4), pp.340-351.
• Sharma, P. (2011). Country of origin effects in developed and emerging markets: Exploring the contrasting roles of materialism and value consciousness. Journal of International Business Studies (2011) 42, 285-306.
• Shimp, T. and Sharma, S. (1987). Consumer ethnocentrism: construction and validation of the CETSCALE. Journal of Marketing Research, 24, August, pp. 280-89.
• Simon, H. (1976). Administrative behavior: a study of decision-making processes in administrative organization. (New York: The Free Press).
• Steenkamp, J.B. E. M. and Hofstede, F. (2002). International market segmentation: issues and perspectives. International Journal of Research in Marketing, 19(3), pp. 185-214.
• Tsaur, S., Chang, T. and Yen, C. (2002). The evaluation of airline service quality by fuzzy MCDM. Tourism Management, 23(2), pp. 107-115.
• Urbany, J., Dickson, P.R. and Kalapurakal, R. (1996). Price search in the retail grocery market. Journal of Marketing, 60, April, pp. 91-104.
• Van Liere, K. D. and Dunlap, R.E. (1980). The social bases of environmental concern: a review of hypotheses, explanations and empirical evidence. Public Opinion Quarterly, 44, pp. 181-197.
• Wen, C. and Yeh, W. (2010). Positioning of international air passenger carriers using multidimensional scaling and correspondence analysis. Transportation Journal, 49(1), pp.7-23.
• Zeithaml. V., Varadarajan, V. and Zeithaml, C. (1988). The contingency approach: its foundations and relevance to theory building and research in marketing. European Journal of Marketing, 22(7), pp. 37-64.
• Beldona, S. and Namasivayan, K. (2006). Gender and demand-based pricing: differences in perceived (Un) fairness and repatronage intentions. Journal of Hospitality and Leisure Marketing,14(4), pp. 89-107.
• Besanko, D., Dube, J.P. and Gupta, S. (2003). Competitive price discrimination strategies in a vertical channel using aggregate retail data. Management Science, 49, September, pp. 1121-1238.
• Bruning E. R., Michael Y. Hu, Wei (Andrew) H. (2009). Cross-national segmentation: an application to the NAFTA airline passenger market. European Journal of Marketing, 43: 11/12, 1498 - 1522.
• Bruning, E.R. (1997). National loyalty and product choice: the case of international air travel. International Marketing Review, 14(1), pp. 59-74.
• Bruning, E. and Saqib N. (2013). Cultural similarity and national bias: an assessment in an international service context. Journal of Global Marketing, 26(1), pp. 41-56
• Cordell, V. V. (1991). Competitive context and price as moderators of country of origin preferences. Journal of Academy of Marketing Science, 19, Spring, pp. 123-128.
• Dodds, W., Monroe, K. B. and Grewal, D. (1991). Effects of price, brand, and store information on buyers’ product evaluations. Journal of Marketing Research, 27, August, pp. 307-19.
• Douglas, M. and Isherwood, B. (1979). The world of goods. eds. basic books inc: New York.
• Drazin, R. and Van de Ven A. (1985). Alternative forms of fit in contingency theory. Administrative Science Quarterly, 30, pp. 514-539.
• Elrod, T. and Winer, R. (1982). An empirical evaluation of aggregation approaches for developing market segments. Journal of Marketing, 46, Fall, pp. 67-74.
• Erdem, Ttilin, Kean, M.P., and Baohong, S. (2008). A dynamic model of brand choice when price and advertising signal product quality. Marketing Science, 27, 1111- 1125.
• Ferraro, R., Bettman, J.R and Chartrand T.L. (2009). The power of strangers: the effect of incidental consumer-brand encounters on brand choice. Journal of Consumer Research, 35 (5): 729-741.
• Gerber, D. (2010). Global competition: law, markets and globalization. Oxford University Press.
• Green P. and Wind, Y. (1975). New way to measure consumers’ judgments. Harvard Business Review, July-August, pp. 107-17.
• Greene, W.H. (2001). Estimating econometric models with fixed effects. New York University, Leonard N. Stern School of Business, Department of Economics,Working Paper.
• Greene, W.H. (2004). The behaviour of the maximum likelihood estimator of limited dependent variable models in the presence of fixed effects. Econometrics Journal, 7, pp. 98-119.
• Gupta, S. and Chintagunta, P.K. (1994). On using demographic variables to determine segment membership in logit mixture models. Journal of Marketing Research, 31, February, pp. 128-136.
• Heslop, L. A. & Papadopoulos, N. (1992). But who knows where or when? Reflections on the images. In Product Country Images, edited by N. Papadopoulos and L. Heslop. USA: Hawthorn Press.
• Hoch, S. J., Kim, B.D., Montgomery, A.L. and Rossi, P.E. (1995). Determinants of store level price elasticity. Journal of Marketing Research, 32, February, pp. 17-29.
• Hotelling, H (1929). Stability in competition. The Economic Journal, 39(153), March, pp. 41-57.
• Johansson, J. K., Douglas, S.P. and Nonaka, I. (1985). Assessing the impact of country of origin on product evaluations: a new methodological perspective. Journal of Marketing Research, 22, November, pp. 388-396.
• Kalyanam, K. and Putler, D.S. (1997). Incorporating demographic variables in brand choice models: an indivisible alternatives framework. Marketing Science, 16(2), pp. 166-81.
• Kumar, A. (2008). Age differences in mobile service perceptions: comparison of generation Y and baby boomers. Journal of Services Marketing, 22(7), pp. 568-577.
• Leszczyc, P.T.L.P and Bass, F. (1998).Determining the effects of observed and unobserved heterogeneity on consumer brand choice. Applied Stochastic Models and Data Analysis, 14, pp. 95-115.
• Levine, R. and Campbell, D. (1972). Ethnocentrism: theories of conflict, attitudes and group behavior. New York: John Wiley and Sons.
• Liechty, J.C., Fong, D.K.H. and DeSarbo, W.S. (2005). Dynamic models incorporating individual heterogeneity: utility evolution in conjoint analysis. Marketing Science, 24(2), pp. 285-293.
• Liou, J. and Tzeng, G. (2007). A non-additive model for evaluating airline service quality. Journal of Air Transport Management, 13(3), pp. 131-138.
• Maheswaran, D. (1994). Country of origin as a stereotype: effects of consumer expertise and attribute strength on product evaluations. Journal of Consumer Research, 21(2), September,pp.354-365.
• Meyers-Levy, J. and Maheswaran, D. (1991). Exploring differences in males’ and females’ processing strategies. Journal of Consumer Research, 18, June, pp. 63-70.
• Mittal, V. and Kamakura, W. (2001). Satisfaction, repurchase intent, and repurchase behavior: Investigating the moderating effects of customer characteristics. Journal of Marketing Research, 38 (February), 131-42.
• Mort, G. S. and Duncan, M. (2003). Owned by.’: country of origin’s new cue," journal of unternational consumer marketing, 15 (3), pp. 49-69.
• Moschis, G. P. and Churchill, G.A. (1978). Consumer socialization: a theoretical and empirical analysis. Journal of Marketing Research, 15, pp. 599-609.
• Moorthy, S. (2012). Can brand extension signal product quality? Marketing Science, 31:756-770
• Murthi, B.P.S., Haruvy, E. and Zhang, H. (2007). The effect of variability in price on consumer brand choice. Review of Marketing Science, 5(1), pages 4.
• Muthukrishnan, A.V. and Kardes, F.R. (2001). Persistent preferences for product attributes: the effects of the initial choice context and uninformative experience. Journal of Consumer Research, 28, June, pp. 89-104.
• Netemeyer, R.G.,Durvasula, S. and Lichtenstein, D.R. (1991). A cross-national assessment of the reliability and validity of the CETSCALE. Journal of Marketing Research, 28, August, pp. 320-327.
• Nevo, A. (2000). A practitioner’s guide to estimation of random-coefficients legit models of demand. Journal of Economics and Management Strategy, 9: 513-548
• Novak, T.P. & B. MacEvoy, B. (1990). On comparing alternative segmentation schemes: the list of values (LOV) and values and life styles (VALS). Journal of Consumer Research, 17, June, pp. 105-109.
• Nowaczyk, R. (1982). Sex-Related differences in the color lexicon. Language and Speech, 25, July-September, pp. 257-65.
• Okoroafo, S. (2010). Gender perceptions of family businesses’ marketing stimuli. International Journal of Marketing Studies, 2(1), pp. 3-12.
• Petzer, D. and De Meyer, C.F. (2011). The perceived service quality, satisfaction and behavioral intentions towards cell phone network service providers: a generational perspective. African Journal of Business Management, 5(17), pp. 7461-7473.
• Phillips, L. W. and Sternthal, B. (1977). Age differences in information processing: a perspective on the aged consumers. Journal of Marketing Research, 14, November, pp. 444-57. SAS Institute (2008). SASISTAT 9.2 User's Guide. Cary, NC.
• Sethuraman, R. and Cole, C. (1999). Factors influencing the price premiums that consumers pay fornational brands over store brands. Journal of Product and Brand Management, 8(4), pp.340-351.
• Sharma, P. (2011). Country of origin effects in developed and emerging markets: Exploring the contrasting roles of materialism and value consciousness. Journal of International Business Studies (2011) 42, 285-306.
• Shimp, T. and Sharma, S. (1987). Consumer ethnocentrism: construction and validation of the CETSCALE. Journal of Marketing Research, 24, August, pp. 280-89.
• Simon, H. (1976). Administrative behavior: a study of decision-making processes in administrative organization. (New York: The Free Press).
• Steenkamp, J.B. E. M. and Hofstede, F. (2002). International market segmentation: issues and perspectives. International Journal of Research in Marketing, 19(3), pp. 185-214.
• Tsaur, S., Chang, T. and Yen, C. (2002). The evaluation of airline service quality by fuzzy MCDM. Tourism Management, 23(2), pp. 107-115.
• Urbany, J., Dickson, P.R. and Kalapurakal, R. (1996). Price search in the retail grocery market. Journal of Marketing, 60, April, pp. 91-104.
• Van Liere, K. D. and Dunlap, R.E. (1980). The social bases of environmental concern: a review of hypotheses, explanations and empirical evidence. Public Opinion Quarterly, 44, pp. 181-197.
• Wen, C. and Yeh, W. (2010). Positioning of international air passenger carriers using multidimensional scaling and correspondence analysis. Transportation Journal, 49(1), pp.7-23.
• Zeithaml. V., Varadarajan, V. and Zeithaml, C. (1988). The contingency approach: its foundations and relevance to theory building and research in marketing. European Journal of Marketing, 22(7), pp. 37-64.
How to Cite
Saqib, Najam US., Zhou Zhang, and Edward Bruning. 2014. “Accounting for Interaction and Individual Specific Effects in an Analysis of International Air Traveler Preferences”. Studies in Business and Economics 17 (1). https://doi.org/10.29117/sbe.2014.0077.
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Articles