This allows the consumer to respond differently to different SKUs' marketing mix activities during her purchase history. The empirical results are summarized as follows. We find satiation and stronger shopping experience for more familiar attribute levels in most product categories. These occur in all three salient attributes. The phenomena help to explain the significant variety-seeking behavior in these product categories.
Consumers are more responsive to price and feature advertisement for less familiar products.
Conversely, they are less responsive to display for less familiar products. This suggests an interesting differentiated promotion strategy based on product familiarity. Finally, our model predicts demand for new products better than the FH model. Also, it can be used for predicting sales of new products that introduce new attribute levels to a category. To the best of our knowledge, no existing model can forecast sales of such new products.