Brand‐specific heterogeneity and market‐level brand switching

Abstract

Provides a new way to look at competitive brand strategy through analysis of switching, where the only data required are market‐level brand‐switching matrices. The parameters indicate, for each brand, the degree to which it insulates itself from competition. Shows empirically that this insulation is characteristic of both market leaders and market nichers. Compares results across eight data sets which range from consumer packaged goods to services to durables. Suggests that, by applying this method to panel or survey data, managers can better map out long‐term marketing strategies such as product design, segment targeting and advertising campaigns, and gives some examples of how this can be carried out.