Managing Market Share When Consumers Seek Variety

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Managing Market Share When Consumers Seek Variety
Fred M Feinberg
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We now consider the impact on choice shares of making two brands appear more similar without changing total preference for any brand. We fix two brands, B^ and B2, and calculate 9Xk 3Si2 holding all rr's constant: SXi 3Si2 = IVau (l-VS. I)](xi) - [V( 321" 1 ) / ( 1-VS . 2 ) ] ( X2 ) [119] 3X2. 9Si2= [V(ai2-1) /(1-VS i)](xi) ^ [Va22/ ( 1-VS, 2 ) ] ( X2 ) aXk/9Si2 = [Vaii(l-VS. I)](xi) - [Va2k ■(I-VS. 2) J(X2) for '2 That the approximation for axj^, sSi2 for k>2 is positive demonstrates that the ...competition can expect to benefit when two brands trade their unique features for shared ones. It is for this reason that a product line should aim for diversity to benefit most from variety-seeking. As for B^ and B2 . Examination 19 of the expessions above yields two conclusions; 1) the more numerous the brands, the more likely it is that any two will both lose share by appearing more alike; and 2) if either is to benefit from such a move, it is the larger of them, particularly when variety-seeking is intense.

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