Modeling Asymmetric Competition

The effects of the marketing actions of one brand can be distributed among its competitors' market shares in a complex manner. This paper presents and illustrates methods for modeling brand competition and brand strategies in markets where competitive effects can be differentially and asymmetrically distributed. We discuss the empirical specification, parameter estimation and competitive-strategy implications of the models proposed. Price and advertising competition among eleven brands of an Australian household product is used to illustrate the application of these procedures.