Capturing Competitive, Cannibalistic, And Variety-Seeking Influences On Market Share: An Asymmetric Modeling Approach

Abstract

This paper attempts to focus on the asymmetric source-of-share issue by building and calibrating a probabilistic choice model which estimates market share at the consumer level while also capturing the asymmetric influence of inter-brand competition, intra-brand cannibalism, and cross-form variety-seeking. The results suggest that the inclusion of asymmetric influences improves the fit to the data. Asymmetric variety-seeking is demonstrated to be a function of the dissimilarity between offerings. Managers who ignore asymmetric variety-seeking may be ignoring some of their closest competitors. The importance of asymmetric competition and symmetric cannibalism must also be taken into account. Both are demonstrated to be functions of the similarity between offerings. Managers who ignore asymmetric cannibalism may introduce offering extensions that leave the firm no better off financially. These extensions conceivably could have a negative impact on the financial viability of the firm given the extra cost of expanding their offering mix. In addition, asymmetric competition provides new insights as to the competitors most likely to be affected by a given firms actions.