Bayesian Statistics and Marketing, 2nd Edition

12Case Study 3: Scale Usage Heterogeneity

Abstract

Questions that use a discrete ratings scale are commonplace in survey research. Examples in marketing include customer satisfaction measurement (CSM) and purchase intention. Survey research practitioners have long commented that respondents vary in their usage of the scale; common patterns include using only the middle of the scale or using the upper or lower end. These differences in scale usage can impart biases to correlation and regression analyses. In order to capture scale usage differences. We develop a model with individual scale and location effects and a discrete outcome variable. The joint distribution of all ratings scale responses is modeled rather than specific univariate conditional distributions as in the ordinal probit model. The model is applied to a customer satisfaction survey where it is shown that the correlation inferences are much different once proper adjustments are made for the discreteness of the data and scale usage. The adjusted or latent ratings scales is also more closely related to actual purchase behavior.

12.1 BACKGROUND

Customer satisfaction surveys, and survey research in general, often collect data on discrete rating scales. Figure 12.1 shows a sample questionnaire of this type from Maritz Marketing Research Inc, a leading CSM firm. In this sample questionnaire, a five point scale (excellent to poor) is used while in other cases 7 and 10 point scales are popular. Survey research practitioners ...