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Unformatted text preview: Anna Balatel, DEA SUMMARY OF THE ARTICLE “COMPETITIVE ANALYSIS” BY ROHIT DESHPANDE’ AND HUBERT GATIGNON (1994) UNDERSTANDING COMPETITIVE STRUCTURE: • The analysis of actual purchases or of the usage behavior exhibited by consumers concerns the pattern of purchases made over time by individuals or exhibited in the market. Marketing mix cross-elasticities indicate the effect of the marketing action of firm I on the sales of firm j. Cross-elasticity matrix is not symmetric, indicating that competition is asymmetric. The asymmetry is a source of competitive advantage. Drawbacks:- changes in marketing mix variables by one firm often lead to a reaction from competitors- marketing mix cross-elasticities might not be static- variability or collinearity in the data make it difficult to estimate cross-elasticities- estimation of cross-elasticities is subject to bias due to missing variables Brand switching has been typically measured by the conditional probability of purchasing brand j at purchase occasion t when brand i was bought at the previous purchase occasion (t-1)....
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- Spring '10