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Competitive Product Positioning and Pricing under Brand Loyalty

Author

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  • ENSTRÖM , RICKARD
  • GHOSH, SUBHADIP

Abstract

We analyze the pure strategy equilibrium in prices and the corresponding equilibrium product differentiation in a two-stage linear spatial competition duopoly model with quadratic transportation costs. Both firms have segments of brand loyal and non-brand loyal consumer segments, with the two firms primarily competing on the brand switching segment. A comparative statics analysis is undertaken, looking at the impact of a change in size, presence, and asymmetry of the brand loyal segments.

Suggested Citation

  • Enström , Rickard & Ghosh, Subhadip, 2016. "Competitive Product Positioning and Pricing under Brand Loyalty," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 51(1), pages 69-81.
    • Handle: RePEc:dse:indecr:0111
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    More about this item

    Keywords

    Product Differentiation; Spatial Competition; Brand Loyalty; Pricing;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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