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.
Keywords
Market segmentationEconometricsEconomicsPrice elasticity of demandPreferenceMarket structureProduct differentiationMicroeconomicsMarket definitionProbabilistic logicConsumer behaviourCompetition (biology)Consumer choiceBrand preferenceProduct (mathematics)MarketingBusinessMathematicsStatisticsBrand awarenessCournot competition
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Publication Info
- Year
- 1989
- Type
- article
- Volume
- 26
- Issue
- 4
- Pages
- 379-390
- Citations
- 1230
- Access
- Closed
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Cite This
Wagner A. Kamakura,
Gary J. Russell
(1989).
A Probabilistic Choice Model for Market Segmentation and Elasticity Structure.
Journal of Marketing Research
, 26
(4)
, 379-390.
https://doi.org/10.1177/002224378902600401
Identifiers
- DOI
- 10.1177/002224378902600401