A Market Basket Analysis Conducted with a Multivariate Logit Model

The following research is guided by the hypothesis that products chosen on a shopping trip in a supermarket can indicate the preference interdependenciesbetween different products or brands. The bundle chosen on the trip can be regarded as the result of a global utility function. More specifically: the existence ofsuch a function implies a cross-category dependence of brand choice behavior. Itis hypothesized that the global utility function related to a product bundle resultsfrom the marketing-mix of the underlying brands. Several approaches exist to describe the choice of specific categories from a set of many alternatives. The models are discussed in brief; the multivariate logit approach is used to estimate a model with a German data set.