Advanced Search
MyIDEAS: Login to save this article or follow this journal

Modeling patronage shift to a new entrant for predicting disproportionate losses for incumbent outlets


Author Info

  • Jun, Duk Bin
  • Kim, Jungki
  • Park, Myoung Hwan
  • Cha, Kyoung Cheon
Registered author(s):


    In a retail market where market competition is intensifying due to increases in the numbers of outlets, an understanding of patronage-shifting behavior is critical to improving the prediction accuracy of changes in the market shares of existing outlets. Our objective is to understand consumers’ patronage shift patterns in response to a new outlet. This study develops a patronage shift model by incorporating outlet characteristics which affect the choice set formation of consumers. Factors of interest to us are the accessibility of the new outlet, outlet awareness, and inter-outlet substitutability. An empirical analysis of the motion picture exhibition industry shows that (i) patronage loss is significantly disproportionate across incumbent movie theaters due to the asymmetric substitution effect, (ii) substitutability is more crucial than accessibility in accurately capturing disproportionate substitution patterns at the market level, (iii) the probability of a consumer being aware of a new theater increases gradually, (iv) modeling the growth pattern of outlet awareness plays a significant role in representing actual market responses more accurately, and (v) patronage patterns estimated by the proposed model from aggregate market share data are consistent with actual consumer responses.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal International Journal of Forecasting.

    Volume (Year): 28 (2012)
    Issue (Month): 3 ()
    Pages: 660-674

    as in new window
    Handle: RePEc:eee:intfor:v:28:y:2012:i:3:p:660-674

    Contact details of provider:
    Web page:

    Related research

    Keywords: Patronage shift; Spatial competition; Store choice set; Motion picture exhibition industry;


    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Nevo, Aviv, 1998. "Measuring Market Power in the Ready-To-Eat Cereal Industry," Food Marketing Policy Center Research Reports 037, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    2. Bettman, James R & Luce, Mary Frances & Payne, John W, 1998. " Constructive Consumer Choice Processes," Journal of Consumer Research, University of Chicago Press, vol. 25(3), pages 187-217, December.
    3. Raphael Thomadsen, 2007. "Product Positioning and Competition: The Role of Location in the Fast Food Industry," Marketing Science, INFORMS, vol. 26(6), pages 792-804, 11-12.
    4. Manrai, Ajay K. & Andrews, Rick L., 1998. "Two-stage discrete choice models for scanner panel data: An assessment of process and assumptions," European Journal of Operational Research, Elsevier, vol. 111(2), pages 193-215, December.
    5. Vishal P. Singh & Karsten T. Hansen & Robert C. Blattberg, 2006. "Market Entry and Consumer Behavior: An Investigation of a Wal-Mart Supercenter," Marketing Science, INFORMS, vol. 25(5), pages 457-476, September.
    6. Bronnenberg, B.J.J.A.M. & Vanhonacker, W.R., 1996. "Limited choice sets, local price tesponse and implied measures of price competition," Open Access publications from Tilburg University urn:nbn:nl:ui:12-343437, Tilburg University.
    7. Jianan Wu & Arvind Rangaswamy, 2003. "A Fuzzy Set Model of Search and Consideration with an Application to an Online Market," Marketing Science, INFORMS, vol. 22(3), pages 411-434, March.
    8. Peter Davis, 2006. "Spatial competition in retail markets: movie theaters," RAND Journal of Economics, RAND Corporation, vol. 37(4), pages 964-982, December.
    9. Finn, Adam & Louviere, Jordan, 1990. "Shopping-center patronage models : Fashioning a consideration set segmentation solution," Journal of Business Research, Elsevier, vol. 21(3), pages 259-275, November.
    10. Geisel, Martin S. & Narasimhan, Chakravarthi & Sen, Subrata K., 1993. "Quantifying the competitive impact of a new entrant," Journal of Business Research, Elsevier, vol. 26(3), pages 263-277, March.
    11. A. Stewart Fotheringham, 1988. "Note—Consumer Store Choice and Choice Set Definition," Marketing Science, INFORMS, vol. 7(3), pages 299-310.
    12. Ting Zhu & Vishal Singh, 2009. "Spatial competition with endogenous location choices: An application to discount retailing," Quantitative Marketing and Economics, Springer, vol. 7(1), pages 1-35, March.
    Full references (including those not matched with items on IDEAS)



    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


    Access and download statistics


    When requesting a correction, please mention this item's handle: RePEc:eee:intfor:v:28:y:2012:i:3:p:660-674. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.