A Model for Product Line Decisions

Cover A Model for Product Line Decisions
A Model for Product Line Decisions
Glen L Urban
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0 -1. 529 (-2. 56) . 350 ( 1. 78) . 861 ( . 78), 071 ( . 31) - . 548 (- . 59) . 475 ( 2. 04) . 252 4. 9 CPiN>0 => Substitutes CPiN Complements CFiN'O => Complements CFiN Substitutes * t statistic for regression coeficient (elasticity) for 88 degrees of freedom TABLE ONE INDUSTRY ELASTICITIES & CROSS ELASTICITIES -19- This set of cross elasticities was one predominated by complementarity. This conclusion did not agree with a priori feelings that indicated these products could be competing for th...e same buyers in the general product class. Studies by Henderson, Hind, and Brown had indicated, in particular, that display space interactions between the frequently purchased consumer products of apples, oranges, grapefruit and bananas were basically ones of substitution. These two considerations suggested further study should be initiated. To explore the interdependencies more com- pletely, the industry price and facing data for each product were subdivided into "us" and "them" classes. "Us" was our brand price or facings and "them" was the average price and facing for all other competitors.

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