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Visualization of competitive market structure by means of choice data

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  • Kunz, Werner

Abstract

This paper presents a method for visualizing competitive market structures based on scanner panel date where asymmetries are taken into account. For this, I combined consumer choice models based on mixed logit models with three-mode principal component analysis. This approach can be used to unfold a competitive market structure map. The methodology presented is able to quantify the clout and receptivity of various brands. The results can then be visualized over time. Using this approach, guidelines for promotional activities of new brands can be provided, and possible threats from the competition detected.

Suggested Citation

  • Kunz, Werner, 2007. "Visualization of competitive market structure by means of choice data," SFB 649 Discussion Papers 2007-032, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    • Handle: RePEc:zbw:sfb649:sfb649dp2007-032
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    References listed on IDEAS

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    1. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, September.
    2. Pieter Kroonenberg & Jan Leeuw, 1980. "Principal component analysis of three-mode data by means of alternating least squares algorithms," Psychometrika, Springer;The Psychometric Society, vol. 45(1), pages 69-97, March.
    3. Ledyard Tucker, 1966. "Some mathematical notes on three-mode factor analysis," Psychometrika, Springer;The Psychometric Society, vol. 31(3), pages 279-311, September.
    4. Lee G. Cooper, 1988. "Competitive Maps: The Structure Underlying Asymmetric Cross Elasticities," Management Science, INFORMS, vol. 34(6), pages 707-723, June.
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    1. repec:hum:wpaper:sfb649dp2007-060 is not listed on IDEAS
    2. Perederiy, Volodymyr, 2007. "Kombinierte Liquiditäts- und Solvenzkennzahlen und ein darauf basierendes Insolvenzprognosemodell für deutsche GmbHs," SFB 649 Discussion Papers 2007-060, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    3. Ó González-Benito & M P Martínez-Ruiz & A Molla-Descals, 2009. "Spatial mapping of price competition using logit-type market share models and store-level scanner-data," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(1), pages 52-62, January.

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    More about this item

    Keywords

    Three-mode PCA; elasticities; joint plots; market structure analysis;
    All these keywords.

    JEL classification:

    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other

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