Competitive reaction- and feedback effects based on VARX models of pooled store data

C Horvath, PSH Leeflang, JE Wieringa*, DR Wittink

*Bijbehorende auteur voor dit werk

OnderzoeksoutputAcademicpeer review

29 Citaten (Scopus)

Samenvatting

We apply a model that accommodates dynamic phenomena in demand- and reaction functions. The latter functions capture reactions to actions as well as to consequences of actions. We estimate a fixed effects VARX model with dynamic and interactive effects for multiple brands based on pooled time series and cross-sectional data for two product categories. The Impulse Response Analysis (IRA) results for one category (tuna) under different scenarios show that the inclusion/exclusion of competitive reaction-and feedback effects matters a lot, consistent with a high degree of competitive interaction in this market. We find that the role of cross-brand feedback effects is greater than the role of traditional competitive reaction effects. Intrafirm effects (internal decisions) also play an important role. In a decomposition study we show that the exclusion of these effects may either increase (up to 12%) or decrease (by as much as 50%) the net unit sales effect of a 20% price reduction. By contrast, in the second category (shampoo), where brands have distinct positions, the exclusion of these effects matters very little. (c) 2005 Elsevier B.V. All rights reserved.

Originele taal-2English
Pagina's (van-tot)415-426
Aantal pagina's12
TijdschriftInternational Journal of Research in Marketing
Volume22
Nummer van het tijdschrift4
DOI's
StatusPublished - dec-2005

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