Abstract:

This paper describes a methodology aimed at inferring competitive market structure based on real-world choice panel data. The model offers two main results : -1 a competitive map providing a bird's eye view of the competitive structure of the market, -2 a brand's eye view of the market allowing to diagnose competitive strengths and weaknesses of a particular brand with respect to it's main competitors. If the competitive map based on the computation of an interbrand distance assumes symetrical competitive relations between brands, a number of indexes used in -2 introduce asymetric relations in competitive measurements. The model is applied to a frequently purchased consumer product category over a three year period in order to test for dynamic effects. Two sets of data are used : consumer panel data and retail panel data collected on the french market. Validity is assessed by comparing the results of the model to measurements of brand switching behavior.