Download this Paper Open PDF in Browser

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  

Wagner A. Kamakura

Rice University

Gary Russell

University of Iowa - Henry B. Tippie College of Business

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

Kamakura, Wagner A. and Russell, Gary, A Probabilistic Choice Model for Market Segmentation and Elasticity Structure (1989). Journal of Marketing Research, Vol XXVI (November 1989), 379-390. Available at SSRN: https://ssrn.com/abstract=2428442

Wagner A. Kamakura (Contact Author)

Rice University ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States
(713) 348-6307 (Phone)

Gary Russell

University of Iowa - Henry B. Tippie College of Business ( email )

Acquisitions
5020 Main Library
Iowa City, IA 52242-1000
United States

Paper statistics

Downloads
1,811
Rank
6,687
Abstract Views
5,535