Patterns in consumption-based learning about brand quality for consumer packaged goods

In this paper, we explore the patterns of consumption-based learning about brand quality in mature consumer packaged goods (CPG) categories as well as category and household characteristics that drive such learning. We estimate brand-choice models with Bayesian learning on household purchases in over thirty CPG categories. This approach yields category- and household-specific estimates of the extent to which consumers update their knowledge on the quality of specific brands, with new consumption-based information from these brands. We then link this degree of learning to the underlying household and category drivers. We find that learning is present and significant in almost all categories yet varies in strength across categories and households. Learning about brand quality is negatively associated with variety seeking. Conversely, learning is stronger in categories where consumers have higher monetary (expensive items) and especially non-monetary stakes (categories with higher performance risk and involvement). In line with the 'enrichment' hypothesis, familiarity with the category resulting from frequent category purchases increases the information extracted from new consumption experiences - but only up to a certain point. Interestingly, however, market mavens learn less, potentially reflecting their overconfidence. Whereas some households learn more than others across the board, category factors are the strongest drivers of learning. Managerial implications are discussed.

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