Pergamon

Journal of Retailing 78 (2002) 119 129

The relationship between purchase regularity and propensity to

accelerate
Demetrios Vakratsasa,*, Frank M. Bassb
a

McGill University, Montreal, PQ H3A 1G5, Canada

b
University of Texas at Dallas, Dallas, TX, USA

Abstract
Identifying random and regular-buying household segments and relating them to demographic and shopping characteristics has been the
focus of many marketing studies. Missing from the marketing literature, however, is a study that relates purchase regularity to marketing
mix sensitivities. Such study could provide substantive implications since it would explore a practical dimension of a segmentation scheme
based on purchase regularity. In this article, we investigate the relationship between purchase regularity and propensity to accelerate through
the use of a mixture Weibull model of purchase timing. Applying this perspective to purchase timing data on four product categories
(ketchup, sugar, bathroom tissue, margarine), we show that in the frequently purchased categories of bathroom tissue and margarine, random
buyers do not exhibit any propensity to accelerate while regular buyers do. In the occasionally purchased categories of ketchup and sugar
on the other hand, random buyers exhibit at least as much propensity to accelerate their purchases as regular buyers do. Our rationale for
these results is based on information-theoretic arguments suggesting that propensity to accelerate depends on the frequency at which a
product category is purchased. 2002 by New York University. All rights reserved.
Keywords: Purchase acceleration; Purchase regularity; Mixtures of hazard rates

Introduction
The regularity of household purchases is a topic that has
received a lot of attention from marketing researchers. Past
studies have mainly focused on identifying households as
regular or random buyers (Schmittlein and Morrison,
1983; Dunn, Reader and Wrigley, 1983; Gupta, 1988;
Wheat and Morrison, 1990; 1994; Bawa and Ghosh, 1990).
Households that make category purchases in relatively
fixed, clockwork-like, intervals are characterized as regular, whereas households that make category purchases in
rather irregular, seemingly random, intervals are characterized as random (Bawa and Ghosh, 1990; Wheat and Morrison, 1990).
What the marketing literature lacks, however, is a study
that relates purchase regularity to marketing mix sensitivities. Such study could exploit practical aspects of a segmentation scheme based on purchase regularity, advancing
therefore research on the subject to issues beyond measurement. For example, the lack of regularity in the purchases of

* Corresponding author. Tel.: !1-514-398-2052.

E-mail address: vakratsa@management.mcgill (D. Vakratsa).

a household identified as random may reflect a considerable

flexibility in that households buying schedule. The routine
pattern of the purchases of a household identified as regular
on the other hand, may indicate that such household is
bound by time constraints that forces it to buy in highly
regular time intervals (say, once every two weeks).
The implied flexibility in the random households purchasing behavior may allow such household to adjust the
timing of a purchase (buy earlier) in order to take advantage
of a promotional event, a phenomenon called purchase
acceleration (Neslin, Henderson and Quelch, 1985). In such
case, the retailer can identify random buyers as important
drivers of store sales during promotional activities making
therefore segmentation based on purchase regularity a useful tool. Identifying segments that accelerate their category
purchases due to promotional activities is of considerable
importance especially after a recent multicategory study by
Bell, Chiang and Padmanabhan (1999), found that the effect
of promotions on primary demand is substantial and greater
than previously estimated.
In this article we investigate the relationship between
purchase regularity and propensity to accelerate through the
use of a mixture Weibull model of purchase timing that
characterizes consumer segments both in terms of their

0022-4359/02/$ see front matter 2002 by New York University. All rights reserved.
PII: S 0 0 2 2 - 4 3 5 9 ( 0 2 ) 0 0 0 6 8 - 4

120

D. Vakratsas, F. M. Bass / Journal of Retailing 78 (2002) 119 129

purchase regularity and their response to price and promotional activities. An application to purchase timing data on
four product categories (ketchup, sugar, bathroom tissue
and margarine) suggests that random buyers do not respond
to prices and promotions uniformly across all product categories.
More specifically, in the frequently purchased categories
of bathroom tissue and margarine, random buyers do not
exhibit any propensity to accelerate whereas in the occasionally purchased categories of ketchup and sugar, random
buyers exhibit at least as much propensity to accelerate
purchases as regular buyers. Our rationale for these results
is based on information-theoretic arguments suggesting that
propensity to accelerate depends on the frequency at which
a product category is purchased. Random buyers consistently purchased with a lesser frequency and exhibited
lower inventory sensitivity than regular buyers.
The rest of the article is organized as follows: In Section
2 we provide a detailed definition of purchase regularity and
a review of the relevant literature. Section 3 discusses the
modeling approach and its advantages. Section 4 covers the
empirical application by providing a short description of the
data and an extensive discussion of the results from the
estimation of the mixture Weibull model. Section 5 carries
the conclusions and directions for future research.

Literature review
Before discussing conclusions from previous research on
purchase regularity, it is important to provide a comprehensive definition of purchase regularity especially since much
of past research has focused on its measurement. Wheat and
Morrison (1990) note that regular (or routine) buyers make
category purchases in clockwork-like time intervals
whereas random buyers make purchases in rather irregular, seemingly random, time intervals. More specifically the
interpurchase times of a regular buyer exhibit a steady
pattern consisting of intervals of similar lengths with very
little noise.
This similarity in the interpurchase times across purchase
occasions of a regular buyer further suggests that the timing
of the next purchase of a regular buyer is strongly dependent
on the time elapsed since the last purchase. The interpurchase times of a random buyer on the other hand, produce
a pattern which exhibits significant noise consisting of both
short and long interpurchase intervals, implying that the
timing of a random buyers purchase is weakly dependent
on the time elapsed since the last purchase. The differences
in the purchasing patterns between a regular and a randombuying household are illustrated in Fig. 1, which compares
the sequence of margarine interpurchase times for two such
households.
The pattern of a households interpurchase times, characterized by its noise and the dependence of the current
purchases timing on the time elapsed since the last pur-

Fig. 1. Purchase sequences for a regular and a random household:

margarine

chase, is therefore what separates regular from random

buyers. Two distributions that produce different patterns for
household interpurchase times, and have been extensively
used in the past to characterize random and regular purchasing behavior are the exponential and the Erlang-2 distributions (Bawa and Ghosh, 1990; Dunn, Reader and Wrigley,
1983; Gupta, 1988). Both these distributions are special
cases of the gamma distribution for different values of its
shape parameter. The exponential distribution exhibits the
memoryless property suggesting that a consumers purchase timing does not depend on the time elapsed since the
last purchase. Furthermore, it has a coefficient of variation
(ratio of the standard deviation to the mean) of one implying
high levels of variability in the data. Both these properties of
the exponential distribution make it appropriate for describing the pattern of a random buyers purchases and thus
characterizing random purchasing behavior. The Erlang-2
on the other hand, produces a low coefficient of variation
and an increasing hazard rate implying that the propensity to
purchase increases with the time elapsed since the last
purchase. This makes this distribution appropriate for the
modeling of regular purchasing behavior.
Wheat and Morrison (1990) proposed an alternative
measure of purchase regularity called the M-statistic, defined as the ratio of a households randomly chosen interpurchase time over the sum of all interpurchase times of that
household. Higher values of the M-statistic imply higher
regularity. The major advantage of this statistic lies in the
fact that it is robust with respect to the available number of
observations (interpurchase times) per household and that it
needs at minimum only two interpurchase times to measure
a households purchase regularity.
Empirical studies have generally found that consumers
vary significantly in their purchase regularity for category
purchases (Dunn, Reader and Wrigley, 1983; Gupta, 1988;
Bawa and Ghosh, 1990; Wheat and Morrison, 1990). Dunn,
Reader and Wrigley (1983), using data from England for
purchases of bathroom tissue and baked beans, reported that
the hypothesis of exponentially distributed interpurchase

D. Vakratsas, F. M. Bass / Journal of Retailing 78 (2002) 119 129

times, and hence of random purchasing behavior, cannot be

rejected for most households. They found that the households for which the random purchasing hypothesis is rejected are more frequent (heavy) buyers, thus suggesting a
relationship between purchase frequency and purchase regularity. Wheat and Morrison (1990), using the M-statistic,
and Gupta (1988), using the shape parameter of the Erlang-2
distribution, on the same IRI coffee data set concluded that
households appear to be more regular than random contrasting therefore the conclusion of Dunn, Reader and Wrigley
(1983). Bawa and Ghosh (1990) took the issue of purchase
regularity beyond measurement and characterized random
and regular buyers in terms of their aggregate shopping
behavior and demographics. Similarly, Dunn, Reader and
Wrigley (1983) found that random buyers purchase less
frequently than regular buyers (i.e., they are lighter buyers),
but also concluded that random buyers make proportionately more purchases on deal and are less brand loyal than
regular buyers.
The results of Bawa and Ghosh (1990) regarding the
aggregate shopping behavior of random buyers suggest that
the lack of routine in the purchasing behavior of random
buyers may be associated with a response to prices and
promotions which is higher than that of regular buyers. This
lack of regularity therefore may indicate a greater flexibility
in the purchasing behavior of random buyers allowing them
to exhibit opportunistic buying behavior where their category purchasing decisions are significantly affected by
pricing and promotional activities (Bucklin and Lattin,
1991; Bell and Lattin, 1998).
In this study we attempt to take a closer look at a possible
relationship between random purchasing and response to
prices and promotions on the purchase occasion rather than
the aggregate level (as, for example, in Bawa and Ghosh). It
should be noted that the intent of our study is to relate
purchase regularity to marketing mix sensitivities by modeling the regularity in timing of purchases of particular
product categories for which we have full information on
price and promotional activities. Other studies (Kahn and
Schmittlein, 1989; Kim and Park, 1997) have focused on
studying regularity in the timing of shopping trips (i.e.,
visits to the grocery store regardless of the product categories purchased). In the latter case, however, full information
on price and promotions on every product category purchased on every single shopping trip may not be available
(e.g., Kim and Park, 1997), thereby prohibiting the study of
the relationship between purchase regularity and marketing
mix sensitivities.

121

the proportional hazard rate approach. This has been frequently used in studies of purchase timing behavior (Jain
and Vilcassim, 1991; Helsen and Schmittlein, 1993; Gonul
and Srinivasan, 1993). Under the proportional hazards formulation, each households hazard rate is the product of
three factors:
a) A baseline hazard rate, which captures the households underlying purchasing pattern.
b) The covariate effects, which in our application refer
to the effect of marketing mix activities on the households hazard rate.
c) An unobserved heterogeneity factor that captures the
households intrinsic purchasing propensity.
We further assume that each segments baseline hazard
rate follows the Weibull specification. The proportional
hazard model then takes the following form:
h i"s#t ij$ ! exp# " 0s # " 1sln t$exp#X %ij $ s$ % s
Where:
i&
j&

1, . . . , I denotes the household

1, . . . , Ji denotes the interval between purchases
for household i
s & 1, . . . , S denotes the segment
tij & duration of the jth interval (jth interpurchase time)
in days for the ith household
xij & vector of marketing mix variables in the end of jth
interval for household i
%s & scale heterogeneity for segments.

Under this formulation, acceleration effects are captured

in the ability of marketing mix activities (namely prices and
promotions) to increase the hazard rate, which translates
into a decrease in the interpurchase time. This means that by
increasing a households hazard rate, a promotional event
decreases the interpurchase time and causes an accelerated
purchase.
The density function fi"s and the cumulative distribution
function Fi"s corresponding to the Weibull hazard function
are:
f i"s#t$ ! exp# " 0s # " 1s ln t$ exp# x%ij $ s$ % s

& exp' ' exp# x%ij $ s$ % s

exp# " 0s

# " 1s ln u$du(

(2)
t

F I"s#t$ ! 1 ' exp' ' exp# x%ij $ s$ % s

Modeling approach
We assume that there are S household segments each
uniquely characterized by its purchase regularity and propensity to accelerate. In order to effectively model each
segments regularity and propensity to accelerate, we chose

(1)

exp# " 0s

# " 1s ln u$du(

(3)

Depending on the value of its shape parameter "1s, the

Weibull hazard rate can produce from constant to sharply
increasing hazard rates. If "1s & 0 for a particular segment

122

D. Vakratsas, F. M. Bass / Journal of Retailing 78 (2002) 119 129

s, the hazard rate in (1) becomes constant and the Weibull

hazard rate reduces to the exponential which has been the
benchmark for characterizing random purchasing behavior.
Large positive values of "1s on the other hand, produce
sharply increasing hazard rates implying that the instantaneous probability of (re) purchase is lower immediately
after a purchase is made, allowing thus for significant inventory effects. Large positive values of the Weibull shape
parameter indicate more regular purchasing behavior
whereas small (closer to zero) values are indicators of random purchasing behavior. The characterization of a random
purchasing segment is, therefore, relative (i.e., being the less
regular segment), consistent with previous empirical studies
(Bawa and Ghosh, 1990; Gupta, 1988; Wheat and Morrison,
1990).
The choice of a Weibull mixture for modeling purchase
regularity raises a natural question: Why not use a mixture
of Erlang-2 and exponential instead, since they have been
used as benchmarks for identifying regular and random
buying segments respectively? There are several advantages
that the Weibull mixture model offers in the context of our
study. First, the shape parameter of the Weibull is allowed
to vary. As a result it can accommodate both increasing
(Erlang-2) and constant hazard rates (exponential for "1s &
0). In other words, Weibull is a more flexible distribution
than Erlang-2. Second, the Weibull hazard rate can be
represented in a proportional hazard formulation (Eq. (1))
allowing therefore the modeling of marketing mix effects on
a households hazard rate. Erlang-2 on the other hand, does
not have a closed-form representation in the proportional
hazard framework (Jain and Vilcassim, 1991), thus prohibiting the study of the relationship between purchase regularity and propensity to accelerate. The M-statistic (Wheat
and Morrison, 1990) has a similar limitation since it cannot
directly incorporate the effects of marketing mix activities.
A third advantage gained from the use of a Weibull
mixture model is that it can produce a nonmonotonic aggregate hazard rate similar in shape to the ones previously
observed for purchase timing data in marketing (Jain and
Vilcassim, 1991; Gonul and Srinivasan, 1993). Nonmonotonic hazard rates in the Weibull mixture specification may
be obtained as the result of aggregation of hazard rates with
different shape and scale parameters (Vaupel and Yashin,
1985). Finally the Weibull mixture model can capture the
effects of marketing mix on time itself (in other words it can
produce time elasticities) rather than just on the hazard
rate. This is extremely important since hazard rates are
unobservable and in practice retailers would like to examine
how many days in advance a household is going to buy (i.e.,
accelerate its purchase) due to a promotion. This ability of
the Weibull mixture model to provide time elasticities significantly strengthens the practical benefits of our study
since random and regular purchasing behavior is explicitly
associated with changes in the timing of a households
purchase.

The time elasticity, the percentage change in time for a

unit change in a marketing mix variable is given by:

" "

exp )

# #

$s
' 1 & 100
" 1s # 1

While for a promotional dummy variable such as Feature

or Display, a unit change can be meaningful (say from no
display to display) unit changes in price may not be realistic.
In this case it is preferable to calculate the effect of a
percentage cut in price on the timing of a purchase. In such
case the effect of a 10% price cutoff a baseline price x0 on
the percentage change in the timing of a purchase is provided by the following formula:

"

exp )

$ s0.9x 0
" 1s # 1

"

exp )

"

' exp )

$ sx 0
" 1s # 1

$ sx 0
& 100
" 1s # 1

A final aspect of the model that needs to be resolved is

the specification of the segment-specific scale heterogeneity
%s. We employ the Gamma distribution to model the heterogeneity in the scale parameter of each segment. The
Gamma distribution implies the following probability density function gs for %s:
g s# % s$ !

b sas as)1
%
exp# ' b s% s$, % s ( 0
*#a s$ s

(4)

Since we have already included an intercept parameter

for the hazard rate of each segment ("0s) we restrict the
scale parameter of gamma heterogeneity a, to be equal to the
shape parameter b to ensure model identification (Gonul and
Srinivasan, 1993).
An alternative way of modeling segment-specific scale
heterogeneity would be to use a nonparametric approach
with a finite number of support points. Proponents of such
an approach argue that it is a flexible method (Jain and
Vilcassim, 1991). The Gamma distribution however, is
quite flexible since it does not impose any symmetry restrictions and can take on a variety of shapes depending on
its parameters. Such flexibility has been demonstrated in
numerous household purchase timing studies incorporating
gamma heterogeneity (Jeuland, Bass, and Wright, 1980;
Gupta, 1991; Gonul and Srinivasan, 1993; Kim and Park,
1997). Furthermore Kim and Park (1997) found that a continuous gamma heterogeneity approach is more parsimonious than the finite mixture approach in the number of
parameters that uses.
The likelihood function across spells for household i
conditional on the assumption that it belongs to segment s,
is then given by:

!%
Ji

L i$s !

, f i$s#t ij$x ij, % s$du- )ij

+s j&1

& ,1 ' F i$s#t ij$x ij, % s$- 1))ijg s# % s$d % s

(5)

D. Vakratsas, F. M. Bass / Journal of Retailing 78 (2002) 119 129

Where:

)ij & 1 if jth spell for the ith household is complete

& 0 if the jth spell for the ith household is right
censored
and +s is the domain of %s.
Alternatively, using the expressions (2), (3) and (4) one
could express the above likelihood function as follows:
L i$s !

% ,exp#"

JI

0s

# " 1slnt$exp# x %ij$ s$ % s

j&1

& exp' ' exp# x%ij$ s$ % s

tij

exp# " s0

# " s1ln u$du(- )ij

exp# " 0s

# " 1slnu$du(- 1))ij

% exp# ' a s% s$d % s
*#a s$ s
The likelihood in (6) has a closed-form expression,
which makes its estimation relatively easy. The overall
likelihood (across households, segments and spells) is then
given by:

% &p L

&p
S

(10)

imL i$m

These posterior probabilities can in turn be used to classify households as regular or random buyers and calculate
relevant statistics for the random and regular purchasing
segments. We set the number of segments S to 2 to allow for
the presence of both a random and a regular purchasing
segment and maximize L (or equivalently logL) by implementing the BFGS (Broyden, Fletcher, Goldfarb and Shanno) iterative algorithm in GAUSS.

(7)

is i$s

i&1 s&1

Where pis denotes the probability of household i belonging

to segment s.
We model pis by using the logit formulation. Since we
expect segments to vary both in terms of their regularity and
their sensitivity to marketing mix variables, such differences may be related to household demographics (Bawa and
Ghosh, 1990). We therefore express segment membership
probabilities in terms of the demographic variables of the
household:
p is !

p isL i$s

m&1

p is$$, xI !

tij

b sas

L!

Where di is a vector of demographic variables for house1

hold i, with p iS & 1 ) Sk )
! s ) "! S , * s &
& 1 p is and " s & "
*! s ) *! S . Segment S therefore becomes the baseline
segment, with *s reflecting the difference in the effect of the
demographic variables on the probability of membership in
segment s from the effect of the demographic variables on
the probability of membership in segment S (Gupta and
Chintagunta, 1994). The probabilities pis of assigning a
given household to one of the S segments can be updated by
means of an empirical Bayes procedure based on the information on household purchase histories (Bucklin and
Gupta, 1992; Kamakura and Russell, 1989). The posterior
probability of classifying household i to segment s given its
vector of purchase history xi and the estimated vector of
parameters $ is provided by the following formula:

(6)

& ,exp' ' exp# x%ij$ s$ % s

123

exp# "! s # *! sd i$

s ! 1, . . . , S

& exp#"! # *! d $
S

(8)

k&1

To ensure that the above probabilities add to 1, we standardize with respect to the probability of belonging to segment S:
exp# " s # * sd i$

p is !

& exp#" # * d $

S)1

1#

k&1

s ! 1, . . . , S ' 1

(9)

Data and results

Data
We used AC Nielsen scanner data from an ERIM market
(Springfield, MO) on household purchases of four product
categories: ketchup, sugar, bathroom tissue and margarine.
Consumers purchase two of the categories (tissue and margarine) frequently whereas the other two are purchased
occasionally. We selected households that made at least six
purchases (i.e., five completed interpurchase times) during a
104-week period in all four product categories. While such
rule may result in a bias towards more frequent (heavy)
purchasing households, it is necessary to ensure consistent
estimation of the purchase timing distribution for each
household on each category and allow for meaningful comparisons across categories. The use of this rule resulted in
the identification of 272 households that made at least six
purchases in all four categories. Price per ounce and absence/presence of feature or display (a dummy variable we
call FoD) are the marketing-mix variables in our analysis.
Relevant summary statistics for the four product categories
are provided in Table 1.
We included a volume variable in order to introduce
inventory effects. This measures the amount (in ounces)

124

D. Vakratsas, F. M. Bass / Journal of Retailing 78 (2002) 119 129

Table 1
Summary of Relevant Statistics for all Four Categories

Ketchup
Sugar
Bathroom Tissue
Margarine

No. of
purchases

Average Coefficient of
Variation (standard
deviation)

Average Interpurchase
time in days (standard
deviation)

Average Interpurchase
time on a nonpromotional occasion

Average interpurchase
time on a promotional
occasion

3,383
5,414
11,650
11,879

0.69 (0.23)
0.82 (0.22)
0.73 (0.23)
0.78 (0.24)

70.7 (35.2)
46.6 (28.3)
21.9 (12.1)
23.3 (17.9)

72.4 (41.8)
47.7 (30.3)
22.5 (13.0)
22.5 (16.7)

66.9 (43.9)
39.9 (35.8)
21.3 (15.8)
22.6 (26.6)

bought on the previous purchase occasion expressed as the

product of number of units purchased multiplied by the size
of the unit. Thus, the combination of the volume variable
and the duration terms (scale and shape) of the Weibull
hazard rate capture inventory effects in our model (Jain and
Vilcassim, 1991). In terms of demographic variables that
affect the segment membership probabilities, we chose
household size (number of household members), household
income, female and male head of household working status
and female and male head of household college education.
Small households, since they buy less frequently, are
expected to be more flexible in terms of their inventory and
their purchasing schedule and should thus be more likely to
exhibit random purchasing behavior. Although there has
been a lack of broad agreement on the effect of income on
promotional response (Blattberg and Neslin, 1990), some
studies (e.g., Blattberg et al., 1978) have suggested that
income effects may be nonlinear with middle-income
households being in fact more deal prone. We therefore
divided the sample based on the income variable into bottom third (low income), middle third (middle income)
and upper third (high income) and created a low and a
middle income dummy variable making therefore the high
income category the baseline. However, we did not formulate any hypotheses or conjectures regarding the effect of
income on segment membership probability due to the lack
of consistent empirical evidence.
Both female and male head working status are variables
that can signal a households opportunity costs of the time
required for purchasing activities. Households where the
female and/or male head is not working may have more
time to evaluate promotions and therefore be more prone to
respond to them. Such households may show higher flexibility in the timing of their purchases and thus be more
likely to exhibit random purchasing behavior. We use
dummy variables for both female and male head working
status with 1 denoting full time employed and 0 otherwise.
Finally, the male and female head education variables can
also affect purchase regularity. More educated households
are more likely to be pressed for time due to more demanding work schedules, a factor that can limit their purchasing
flexibility and force them into regular purchasing behavior.
This variable too is expressed as a dummy with 1 noting that
the head of the household had at least college education and
0 otherwise.

Results
The estimation results for the Weibull mixture model for
the four product categories are reported in Table 2. In each
of the categories, the two segments differ considerably with
respect to their hazard shape parameters. Since we use the
shape of the Weibull hazard rate to characterize random and
regular buyers, those differences suggest that the two segments in each product category vary considerably in terms
of their purchase regularity. Thus, in each category the
segment with the smaller shape parameter is the random
segment, and the segment with the larger shape parameter is
the regular segment.
Regular buyers also appear to have higher hazard rate
intercepts (scales) than random buyers in all four categories
suggesting that regular buyers have higher hazard rates.
Since higher hazard rates are associated with shorter interpurchase times this further implies that on average regular
buyers purchase more frequently than random buyers. We
address the issue of purchase frequency in greater detail in
the posterior analysis section where we calculate important
statistics regarding the purchasing behavior of random and
regular buyers. Fig. 2(a-d) compares the hazard rates of
random and regular buyers across all four categories.1 It is
not difficult to observe that hazard rates for the random
segment for each of the four categories are flatter than the
corresponding ones for the regular segment suggesting a
more exponential-like behavior for random buyers.
The price and promotional parameter estimates of Table
2 suggest that the response of the regular and random
segments to prices and promotions cannot be generalized
uniformly across the four categories. Random buyers appear
to be responsive to price and promotional signals (FoD) for
the occasionally purchased categories of ketchup and sugar
but not for the more frequently purchased categories of
bathroom tissue and margarine. Regular buyers on the other
hand, appear to be (especially price) sensitive in their purchases of bathroom tissue and margarine but only for sugar
from the occasionally purchased categories.
As indicated by t tests, differences in marketing mix
sensitivities of random and regular segments are statistically
significant at least for one of the two variables (Price or
FoD), with the exception of the sugar category (Table 3).
We provide a detailed explanation of the empirical results
concerning the response of random and regular segments to

D. Vakratsas, F. M. Bass / Journal of Retailing 78 (2002) 119 129

125

Table 2
Parameter estimates for the two-segment model for all four categories (t-ratios)
Variable

Intercept (scale)
Ln(T) (shape)
Price
Feature or Display
Volume
Heterogeneity Variance

Ketchup

Sugar

Bathroom Tissue

Margarine

Random

Regular

Random

Regular

Random

Regular

Random

Regular

)2.15
()7.26)
0.27
(7.39)
)8.76
()2.68)
0.04
(2.01)
0.37
(0.34)
0.20
(9.04)

)0.90
()3.17)
0.80
(16.51)
)1.59
()0.31)
0.07
(0.66)
)3.43
()6.93)
0.62
(11.51)

)1.60
()22.79)
0.14
(5.38)
)0.77
()3.97)
0.13
(2.45)
0.36
(2.24)
0.21
(11.33)

)0.97
()10.13)
0.49
(16.23)
)0.76
()3.65)
0.14
(2.50)
0.36
(2.14)
0.31
(7.75)

)0.53
()14.78)
0.37
(25.25)
0.04
(0.38)
0.01
(0.61)
)4.22
()5.35)
0.29
(17.54)

0.57
(6.46)
1.02
(40.05)
)0.62
()2.16)
0.08
(2.82)
)10.65
()11.16)
0.64
(12.02)

)0.83
()9.20)
0.24
(13.20)
0.11
(1.53)
)0.03
()0.74)
)1.65
()1.54)
0.37
(14.76)

)0.41
(4.68)
0.74
(28.96)
)0.19
()2.81)
0.06
(1.69)
)29.80
()12.02)
0.35
(13.67)

Effects on probability of belonging to the random segment

Intercept
Household Size
Low Income
Middle Income
Female Head Working Status
Male Head Working Status
Female College Education
Male College Education
Log-Likelihood

Ketchup

Sugar

Bathroom Tissue

Margarine

3.09 (2.87)
)0.42 ()2.37)
)0.49 ()0.92)
0.33 (0.67)
)0.82 ()1.81)
)1.07 ()1.69)
)0.09 ()0.34)
0.22 (0.68)
)8,504.7

1.99 (2.86)
)0.46 ()2.47)
)0.02 ()0.57)
0.57 (1.09)
1.26 (3.09)
)0.86 ()1.23)
0.11 (0.76)
0.34 (0.55)
)11,571.7

2.43 (4.12)
)0.20 ()3.55)
0.03 (0.26)
0.16 (0.15)
)0.40 ()1.17)
)0.84 ()1.92)
)0.59 ()1.91)
0.24 (1.64)
)15,491.6

2.25 (4.39)
)0.33 ()2.38)
0.19 (0.51)
0.25 (0.72)
)0.29 ()0.83)
)1.11 ()2.56)
)0.41 ()1.26)
0.37 (1.10)
)15,814.2

price and promotional activities after we characterize random and regular buyers in terms of some fundamental
statistics of their buying behavior.
The results also suggest that random buyers are less
inventory sensitive than regular buyers with the exception
of sugar where both segments are equally insensitive to
inventory. This low sensitivity to inventory exhibited by the
random buyers suggests that they should be more flexible in
terms of their purchasing schedule. Such flexibility may
have been also inferred by the less regular pattern of purchases for the random buyers as we discussed in the introduction of the paper. However, as evidenced from the empirical results, flexibility does not always seem to translate
into a higher propensity to accelerate and can thus not fully
account for the response of that segment to promotional
events.
In the case of sugar, the hazard rate of both segments
appears to be positively related to the amount purchased in
the previous occasion. While this result is counterintuitive it
may be interpreted in the context of the particular category.
Recall from the statistics reported in Table 1 that sugar
purchases exhibit the highest coefficient of variation among
the four categories studied (0.82). This means that interpurchase times for this category exhibit memory-less (exponential)- type patterns where sequences of short interpurchase times are followed by sequences of long
interpurchase times and vice versa. The presence of a sequence of short interpurchase times implies that households

keep repurchasing fast although volume is accumulated due

to recent purchases occurring in short intervals. Conversely
the presence of a sequence of long interpurchase times
implies that households delay their purchases although they
may run low on quantity due to few purchases occurring in
long intervals. Both cases suggest that the larger (smaller)
the amount on hand, the higher (lower) the propensity to
buy the product, explaining the positive effect of inventory
on the hazard rate.
Of the demographic variables potentially affecting membership in either segment, household size has consistently a
negative effect on the probability of belonging to the random segment implying that random purchasing households
are smaller than regular buying households. This is consistent with the finding that regular buyers have higher hazard
rates (i.e., are more frequent buyers), since larger households are more frequent buyers. Income does not appear to
have a significant effect on random segment membership
for any of the categories and employment of either head of
the household, whenever significant, is negatively related to
membership in the random segment with the exception of
sugar.
This propensity of households where both heads are
employed to belong to the regular segment is consistent
with an opportunity cost of time explanation, according to
which such households are constrained in to a more regular
purchasing schedule due to their high costs of time. The
positive effect of female head employment status on the

126

D. Vakratsas, F. M. Bass / Journal of Retailing 78 (2002) 119 129

Fig. 2. (a) hazard rates for regular and random segments: ketchup; (b) hazard rates for regular and random segments: sugar; (c) hazard rates of regular and
random segments: bathroom tissue; (d) hazard rates for regular and random segments: margarine

random segment membership for sugar may be once again

explained on the basis of category usage. Since random
buyers are less frequent (light) buyers of the category and
sugar can be used in time consuming baking activities to
which working heads of the household cannot commit, such
households tend to belong to the less frequent buying random segment. College education is generally not significantly related to segment membership.

Table 3
Statistical significance tests (t-ratios) for differences of price and
promotional coefficients between regular and random segments
Coefficient

Ketchup

Sugar

Bathroom Tissue

Margarine

Price
FoD

)2.28*
)0.28

0.46
)0.1

2.08
)1.82

2.62
)3.04

* The entry should read: t-ratio for the difference between the estimated
price coefficients for the random and regular segments in the ketchup
category.
1
Since the coefficients for both the regular and random segments are
based on the same sample of households, we used a paired t-test based on
$ 1 ' $ 2
the following formula: t !
where $ 1
'var#$ 1$ # var#$ 2$ ' 2 cov#$ 1, $ 2$
and $ 2 are the estimated parameters corresponding to the random and
regular segments. The variances and covariance of the parameters are
based on the estimated variance-covariance matrix.

Characteristics of random and regular buyers

In order to relate segment membership to purchase behavior characteristics we first calculated the posterior probability of segment membership for each household according to Eq. (10). While a standard practice for assigning
households to either segment is to use the highest probability rule, where each household is assigned to the segment
for which it produces the highest posterior probability
(Gupta and Chintagunta, 1994), such rule can be fuzzy.
Consider for example the case where a large number of
households have posterior probability of belonging to the
random segment of 60%. The highest probability rule will
assign all such households to the random segment although
there is a considerable likelihood that they belong to the
regular segment (40%). Such practice can potentially lead to
biases when calculating important purchase behavior statistics such as purchase frequency and time elasticities.
To overcome the fuzziness of the highest probability
rule, we include all households when calculating the statistics for a particular segment (regular or random) and use the
posterior probabilities of belonging to that segment as
weights.2 Thus, in order to calculate the average interpurchase time of the random (regular) segment we calculate the
average of the interpurchase times of all households
weighted by their corresponding posterior probability of

D. Vakratsas, F. M. Bass / Journal of Retailing 78 (2002) 119 129

127

Table 4
Purchase behavior statistics for random and regular buyers

Ketchup
Sugar
Bathroom Tissue
Margarine

Segment Size

Coefficient of Variation

Average Interpurchase
Time

Price Cut Time

elasticity

Feature or Display
Time elasticity

Random

Regular

Random

Regular

Random

Regular

Random

Regular

Random

Regular

0.57
0.63
0.67
0.54

0.43
0.37
0.33
0.46

78.7 (18.1)
88.9 (18.2)
82.3 (17.5)
91.4 (18.0)

57.1 (10.4)
70.3 (8.7)
53.0 (5.4)
62.4 (7.1)

83.2 (25.1)
56.0 (23.0)
24.3 (10.2)
29.8 (16.0)

54.3 (19.0)
29.1 (9.5)
17.1 (5.5)
15.7 (4.2)

)2.4*
)1.1*
0.1
0.6

)0.3
)0.9*
)0.7*
)0.7*

)3.1*
)10.7*
)0.7
2.5

)3.8
)9.0*
)3.7*
)3.4*

* Denotes that the corresponding coefficients are significant at least at the 10% level.

belonging to that segment (Table 4). Similarly, the size of

each segment was calculated as the average of the corresponding posterior probabilities across all households. Finally price cut elasticities for each segment were calculated
as the weighted average of each households elasticity for a
10% price cutoff the average price paid by that household.
There are some clear patterns emerging from the examination of Table 4, some of them having already been
pointed out in the description of the empirical results above.
First, across all four categories buyers appear to be more
random than regular since the size of the random segment is
higher than that of the regular buyers. This finding tends to
be more in agreement with Dunn, Reader and Wrigley
(1983) and less with Wheat and Morrison (1990) and Gupta
(1988). Second, random buyers appear to buy consistently
less frequently than regular buyers, a finding we expected
by comparing the size of the scale parameters of the random
and regular segments in Table 2.
Also as expected by their characterization based on the
shape of their corresponding hazard rates, random buyers
exhibit a much higher coefficient of variation than their
regular counterparts with the margarine random segment
exhibiting the highest variation (0.91) implying an almostexponential behavior. The time elasticities allow us to interpret the propensity of random and regular segments in
terms of the acceleration (percentage reduction of interpurchase times) caused by prices and promotions. Promotional
signal (FoD) elasticities appear to be higher (whenever
significant) than price cuts confirming previous conclusions
on the importance of advertised price reductions (Totten and
Block, 1987).
Another important issue worth pursuing is whether the
purchase regularity exhibited by a household depends on the
product category. In other words, can a random buyer of
sugar be a regular buyer of ketchup? By looking at the
differences in random segment sizes across the four categories one would tentatively answer yes to such question,
since we studied the same households in all four categories.
We further pursued the issue by calculating the correlations
among the probabilities of belonging to the random segment
for all four categories, since the assignment of households to
either segment has been done probabilistically rather than in
a dichotomous manner. The corresponding correlations appear in Table 5 and they are all statistically significant at the

1% level. Despite their statistical significance, no correlation is greater than 0.45 revealing a relative loose relationship of random purchasing across the four product categories. One possible interpretation of the numbers of Table
5 is that a households purchase regularity varies across
categories.
The relationship between purchase regularity and
propensity to accelerate
Random buyers appear to accelerate their purchases only
in the two occasionally purchased product categories of
ketchup and sugar. Regular buyers on the other hand, exhibit propensity to accelerate in the frequently purchased
categories of bathroom tissue and margarine and only on
sugar from the occasionally purchased categories. In other
words, for categories purchased on a regular basis (frequently), regular buyers are more sensitive to marketing mix
activities, whereas for categories purchased on a less regular
basis (necessity) random buyers exhibit equal or higher
sensitivity to marketing mix than regular buyers. Although
their low inventory sensitivity and the lack of regularity in
their purchasing pattern may suggest that random buyers
exhibit a higher flexibility in their purchasing schedule,
such flexibility does not always translate into higher propensity to accelerate. Purchase flexibility therefore cannot
fully account for the response of random buyers to promotional events.
Our interpretation of the results regarding the response of
random and regular buyers to prices and promotions relies
heavily on another significant empirical finding, consistent
across all four categories, that random buyers are less frequent (lighter) buyers than regular buyers. Regular buyers
being high-demanders (Diamond, 1987), frequent users of
Table 5
Correlation Matrix for Probabilities of Belonging to Random Segment

Ketchup
Sugar
Bathroom Tissue
Margarine

Ketchup

Sugar

Bathroom
Tissue

Margarine

0.32
1

0.44
0.24
1

0.36
0.28
0.31
1

128

D. Vakratsas, F. M. Bass / Journal of Retailing 78 (2002) 119 129

all four categories, are more likely to be informed about the

distribution of prices than random buyers and should thus be
able to respond more efficiently to prices and promotions
(Kim and Rossi, 1994). Because they buy more frequently,
they also have more at stake in each of the four categories
than random buyers do, but more so for the frequently
purchased categories. Regular buyers therefore choose to
focus their response to marketing mix activities on the
categories of bathroom tissue and margarine where there is
more at stake than in the occasionally purchased categories
of ketchup and sugar. For the frequently purchased categories therefore, regular buyers exhibit higher sensitivity than
random buyers do.
Random buyers on the other hand, being less frequent
users of all four categories, are less informed about prices
and have less at stake than regular buyers. Thus for purchases of frequently bought categories, where demand has
to be satisfied fairly regularly and consumers cannot skip
purchases random buyers, with more limited information
than regular buyers, cannot respond efficiently to prices and
promotions. In the occasionally purchased categories on the
other hand, where demand is more flexible, random buyers
use price cuts and promotions as opportunities to buy into
such categories. Our interpretation therefore of the results
regarding the relationship between random buying and propensity to accelerate is based on information-theoretic arguments suggesting that such propensity depends on the
frequency at which a category is purchased. Extensive replication can potentially strengthen the support for our argument.

Conclusions
Although much important research has been conducted
on purchase regularity, a study directly relating purchase
regularity to marketing mix sensitivities had been missing
from the marketing literature. In this paper we empirically
investigated the relationship between purchase regularity
and propensity to accelerate, by formulating a Weibull mixture model of purchase timing and applying it to scanner
data on four product categories. We found that random
buyers exhibit propensity to accelerate in the occasionally
purchased categories of sugar and ketchup but do not respond to prices and promotions in the frequently purchased
categories of bathroom tissue and margarine. Having also
found that in all product categories random buyers are less
frequent (lighter) buyers than regular buyers, we based
our explanation of these results on the frequency at which a
product category is purchased.
More specifically we believe that in the occasionally
purchased categories, random buyers, who are less frequent
users, take advantage of promotions and price cuts in order
to buy into those categories exhibiting opportunistic buying behavior. Regular buyers on the other hand, prefer to
concentrate their response to marketing mix activities on the

more frequently purchased categories where they have a lot

more at stake. In such categories regular buyers being more
frequent users and thus better informed about prices and
promotions than random purchasing households are the
ones who exhibit propensity to accelerate.
At least two other findings that merit discussion were
obtained. First random buyers exhibit lower inventory sensitivity than regular buyers with the exception of the sugar
category where both segments are inventory insensitive.
This, along with the pattern of a random households purchases, suggests that random buyers should be more flexible
in terms of their purchasing schedules. Such flexibility however, as evidenced from the empirical results, does not
always translate into a higher propensity to accelerate. Second we consistently found that in all categories households
are more random than regular. This finding, while in agreement with Dunn Reader and Wrigley (1983) contradicts the
results obtained by Wheat and Morrison (1990) and Gupta
(1988) on coffee purchases.
We believe that our results concerning the purchasing
behavior, and in particular the propensity to accelerate, of
random and regular buyers call for extensive replication in
order to further confirm or challenge them. We also think
that the relationship between purchase frequency and purchase regularity should be further investigated. Our study,
and past on the subject (Dunn, Reader and Wrigley, 1983;
Bawa and Ghosh, 1990), suggested that random buyers
purchase less frequently than regular buyers do. Are therefore random purchasing behavior and purchase frequency
two sides of the same coin? In other words do they represent
the same aspect of purchasing behavior or are there statistical reasons that infrequent buyers appear random in their
purchasing behavior? For example, a household that purchases infrequently may be more likely characterized as
random since there are fewer observations available for
such household and thus its purchasing pattern will be more
sensitive to an abnormally long or short interpurchase
interval (i.e., an outlier). A careful examination, including
simulations, of the effects of purchase frequency on the
parameter estimates characterizing households as random or
regular (i.e., shape of hazard rate) will provide an excellent
opportunity for research.
Another potentially insightful future study could combine household and store-level data to investigate the effect
of the size of random and regular segments on the spikes
and dips of store sales data during and after promotional
events (Neslin and Schneider-Stone, 1996; Van Heerde,
Leeflang, and Wittink, 2000). Such research would further
solidify the practical dimension of a segmentation scheme
based on purchase regularity.
Finally a considerable amount of purchase occasions in
our sample (39%) involve simultaneous purchases of at
least two of the four items studied. This suggests that there
may be dependencies in the interpurchase times of these
four items (Chintagunta and Haldar, 1998). The issue of
cross-category dependencies is however broader as inter-

D. Vakratsas, F. M. Bass / Journal of Retailing 78 (2002) 119 129

purchase times of multiple items should be conditional on

the shopping interval in which case a larger number of
categories, those that constitute a typical shopping basket,
need to be studied.3
Thus a thorough investigation of the issue of dependence
of interpurchase times of multiple items should require data
on a sufficiently large basket of goods (more than the four
items studied here) and a computationally demanding model
that captures such interdependencies. Hopefully, the substantive implications from such complex investigation will
be worth the effort.
Notes
1. The range of days used for plotting the hazard rates
does not extend beyond two standard deviations from
the mean interpurchase time for that category.
2. We thank an anonymous reviewer for suggesting this
method of calculating segment-level statistics.
3. We would like to thank the editor, L. P. Bucklin, and
an anonymous reviewer for their suggestions on this
issue.

Acknowledgments
This paper has benefited from comments of participants
in the Marketing Science Conference at the University of
California at Berkeley, and marketing seminars at the University of Southern California and Santa Clara University.
The authors would like to thank in particular Don Morrison
and Ram Rao for their helpful insights and suggestions.
References
Bawa, K., & Ghosh, A. (1990). The covariates of regularity in purchase
timing. Marketing Letters, 2(2), 147157.
Bell, D. R., Chiang, J., & Padmanabhan, V. (1999). The decomposition of
promotional response: An empirical generalization. Marketing Science,
18(4), 504 526.
Bell, D. R., & Lattin, J. M. (1998). Shopping behavior and consumer
preference for store and price format: why large basket shoppers
prefer EDLP? Marketing Science, 17(1), 66 88.
Blattberg, R. C., Buesing, T., Peacock, P., & Sen, S. K. (1978). Identifying
the deal prone segment. Journal of Marketing Research, 15(3), 369
377.
Blattberg, R. C., & Neslin, S. (1990). Sales promotion: concepts, methods
and strategies. Englewood Cliffs, NJ: Prentice-Hall.
Bucklin, R. E., & Lattin, J. M. (1991). A two-state model of purchase
incidence and brand choice. Marketing Science, 10(1), 24 39.
Bucklin, R. E., & Gupta, S. (1992). Brand choice, purchase incidence and
segmentation: An integrated modeling approach. Journal of Marketing
Research, 29 (2), 201215.

129

Chintagunta, P. K., & Haldar, S. (1998). Investigating purchase timing

behavior in two related product categories. Journal of Marketing Research, 35(1), 4353.
Diamond, P. (1987). Consumer differences and prices in a search model.
Quarterly Journal of Economics, 102(May), 429 436.
Dunn, R., Reader, S., & Wrigley, N. (1983). An investigation of the NBD
model as applied to purchasing at individual stores. Applied Statistics,
32(3), 249 259.
Gonul, F., & Srinivasan, K. (1993). Consumer purchase behavior in a
frequently bought product category: estimation issues and managerial
insights from a hazard function model with heterogeneity. Journal of
the American Statistical Association, 88(4), 1219 1227.
Gupta, S., & Chintagunta, P. K. (1994). On using demographic variables to
determine segment membership in logit mixture models. Journal of
Marketing Research, 31(1), 128 136.
Gupta, S. (1988). Impact of sales promotions on when, what, and how
much to buy. Journal of Marketing Research, 25(4), 342355.
Gupta, S. (1991). Stochastic models of interpurchase time with timedependent covariates. Journal of Marketing Research, 28 (1), 115.
Helsen, K., & Schmittlein, D. S. (1993). Analyzing duration times in
marketing research. Marketing Science, 12(4), 395 414.
Jain, D. C., & Vilcassim, N. J. (1991). Investigating household purchase
timing decisions: A conditional hazard function approach. Marketing
Science, 10(1), 123.
Jeuland, A. P., Bass, F. M., & Wright, G. P. (1980). A multibrand stochastic model compounding heterogeneous Erlang timing and multinomial choice processes. Operations Research, 28(March-April), 255
77.
Kahn, B. E., & Schmittlein, D. C. (1989). Shopping trip behavior: An
empirical investigation. Marketing Letters, 1(1), 55 69.
Kamakura, W. A., & Russell, G. J. (1989). A probabilistic choice model for
market segmentation and elasticity structure. Journal of Marketing
Research, 26(4), 379 90.
Kim, B.-D., & Rossi, P. E. (1994). Purchase frequency, sample selection,
and price sensitivity. Marketing Letters, 5(1), 57 67.
Kim, B.-D., & Park, K. (1997). Studying patterns of consumers grocery
shopping trip. Journal of Retailing, 73(4), 501517.
Neslin, S. A., Henderson, C., & Quelch, J. (1985). Consumer promotion
and the acceleration of product purchases. Marketing Science, 4(2),
147165.
Neslin, S. A., & Schneider Stone, L. G. (1996). Consumer inventory
sensitivity and the post promotion dip. Marketing Letters, 7(1), 7794.
Schmittlein, D. C., & Morrison, D. G. (1983). Prediction of future random
events with the condensed negative binomial distribution. Journal of
the American Statistical Association, 78(382), 449 456.
Totten, J. C., & Block, M. P. (1987). Analyzing sales promotions. Chicago,
IL: Commerce Communications, Inc.
Van Heerde, H. J., Leeflang, P. S. H., & Wittink, D. R. (2000). The
estimation of pre- and post promotion dips with store-level scanner
data. Journal of Marketing Research, 37(3), 38395.
Vaupel, J. W., & Yashin, A. I. (1985). Heterogeneitys ruses: some surprising effects of selection on population dynamics. American Statistician, 39(3), 176 185.
Wheat, R. D., & Morrison, D. G. (1990). Estimating purchase regularity
with two interpurchase times. Journal of Marketing Research, 27(1),
8793.
Wheat, R. D. (1994). Regularity, recency and rates. European Journal of
Operations Research, 76 (2), 283289.