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A Probabilistic Choice Model for Market Segmentation and Elasticity Structure

A Probabilistic Choice Model for Market Segmentation and Elasticity Structure 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Marketing Research SAGE

A Probabilistic Choice Model for Market Segmentation and Elasticity Structure

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References (33)

Publisher
SAGE
Copyright
© 1989 American Marketing Association
ISSN
0022-2437
eISSN
1547-7193
DOI
10.1177/002224378902600401
Publisher site
See Article on Publisher Site

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.

Journal

Journal of Marketing Research – SAGE

Published: Nov 1, 1989

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