An exploratory analysis of cigarette price premium, market share and consumer loyalty in relation to continued consumption versus cessation in a national US panel.

• Type of Material: Article
• Authors: Michael Lewis, Emory University; Yanwen Wang, University of Colorado Boulder; Zachary Cahn, Emory University; Carla Berg, Emory University
• Language: English
• Date: 2015-11-03
• Publisher: BMJ Publishing Group: Open Access
• Publication Version: Final Published Version
• Copyright Statement: © 2015, British Medical Journal Publishing Group
• License: Creative Commons Attribution-NonCommercial 4.0 International
• Final Published Version (URL): http://dx.doi.org/10.1136/bmjopen-2015-008796
• Title of Journal or Parent Work: BMJ Open
• ISSN: 2044-6055
• Volume: 5
• Issue: 11
• Start Page: e008796
• End Page: e008796
• Grant/Funding Information: This work was supported by the National Cancer Institute (U01CA154282-01; PI: Kegler; K07 CA139114; PI: Berg).
• Keywords: PREVENTIVE MEDICINE; PUBLIC HEALTH
• Research Categories: Business Administration, Marketing; Health Sciences, Public Health

Abstract

INTRODUCTION: Brand equity and consumer loyalty play a role in continued purchasing behaviour; however, this research has largely focused on non-addictive products without counter-marketing tactics. We examined the impact of brand equity (price premium, market share) and consumer loyalty (switching rates) on smoking cessation (discontinued cigarette purchases for 1 year) among smokers in a consumer panel. METHODS: In Spring 2015, we analysed 1077 cigarette-purchasing households in the Nielsen Homescan Panel. We analysed cessation in relation to brand equity, consumer loyalty, other purchasing behaviours (nicotine intake, frequency), sociodemographics and tobacco control activities (per state-specific data) over a 6-year period (2004-2009) using Cox proportional hazard modelling. RESULTS: The sample was 13.28% African-American; the average income was $52 334 (SD=31 445). The average price premium and market share of smokers' dominant brands were $1.31 (SD=0.49) and 15.41% (SD=19.15), respectively. The mean brand loyalty level was 0.90 (SD=0.17), indicating high loyalty. In our final model, a higher price premium and market share were associated with lower quit rates (p=0.039); however, an interaction effect suggested that greater market share was not associated with lower cessation rates for African-American smokers (p=0.006). Consumer loyalty was not associated with cessation. Other predictors of lower quit rates included a higher nicotine intake (p=0.006) and baseline purchase frequency (p<0.001). Tobacco control factors were not significantly associated. CONCLUSIONS: Smokers of high-equity cigarette brands are less likely to quit, perhaps due to strong brand-consumer relationships. Thus, continued efforts should aim to regulate tobacco marketing efforts in order to disrupt these relationships to promote cessation.