segmentation: loyalty and consumption level (cf
Figure 1 ).
The process of consumer choice can be
analysed in line with the proposals of Guadagni
and Little 24 and Kamakura and Russell 25 as
follows: when a consumer faces a decision to
purchase, he assigns a utility to each of the
available alternatives, opting fi nally for the one
that provides her with greater utility. There are
two components to this utility function (one
deterministic, represented by V iht , and one
random, represented by e iht ) This is refl ected in
the expression: