A Probabilistic Choice Model for Market Segmentation and Elasticity Structure
Journal of Marketing Research, Vol XXVI (November 1989), 379-390
12 Pages Posted: 24 Apr 2014 Last revised: 3 Apr 2023
Date Written: 1989
Abstract
Marketing scholars commonly characterize market structure by studying the patterns of substitution implied by brand switching. Though the approach is useful, it typically ignores the destabilizing role of marketing variables (e.g., price) in switching behavior. The authors propose a flexible choice model that partitions the market into consumer segments differing in both brand preference and price sensitivity. The result is a unified description of market structure that links the pattern of brand switching to the magnitudes of own- and cross-price elasticities. The approach is applied in a study of competition between national brands and private labels in one product category.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Airline Hubs: Costs, Markups and the Implications of Customer Heterogeneity
By Steven Berry, Pablo T. Spiller, ...
-
The Recoverability of Segmentation Structure from Store-Level Aggregate Data
By Anand V. Bodapati and Sachin Gupta
-
The Dynamic Effect of Innovation on Market Structure
By Harald J. Van Heerde, Carl F. Mela, ...
-
Estimating an Sku-Level Brand Choice Model Combining Household Panel Data and Store Data
-
European Airline Mergers, Alliance Consolidation and Consumer Welfare
-
By Jack K. H. Lee, K. Sudhir, ...
-
Active Versus Passive Loyalty: A Structural Model of Consideration Set Formation
By Nitin Mehta, Surendra Rajiv, ...