This study aimed to elucidate customer satisfaction with specific drugstores and reveal successful marketing measures. We used a Bayesian hierarchical logit model that accounts for the heterogeneity of consumers. The proposed model incorporated the variable selection model proposed in the brand selection model of Gilbride, Allenby, and Brazell (2006). The variable selection model expresses structural heterogeneity of individual brand selection models. By incorporating the variable selection model into the logit model, we could express the structural heterogeneity of the satisfaction model for each customer in addition to the difference in reaction parameter values. Therefore, we were able to capture the factors that clearly affect satisfaction. We used questionnaire data about Vdrug and Genky, which are competing in Gifu. The questionnaire included items about convenience, product lineup, product quality, price, store atmosphere, clerk service, and satisfaction ranking. When a Bayesian hierarchical model is used in the marketing field, panel data are often used for estimating the model stably (Yamada and Sato, 2019). In this study, however, we applied cross-sectional data to the proposed model. Therefore, the results derived from the model estimation carry implications for retail practice.
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