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Measuring changes in preferences and perception due to the entry of a new brand with choice data

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  • Lutz Hildebrandt
  • Lea Kalweit
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    Abstract

    Context effects can have a major influence on brand choice behavior after the introduction of a new product. Based on behavioral literature, several hypotheses about the effects of a new brand on perception, preferences and choice behavior can be derived, but studies with real choice data are still lacking. We employ an internal market structure analysis to measure context effects caused by a new product in scanner panel data, and to discriminate between alternative theoretical explanations. An empirical investigation reveals strong support for categorization effects and changes in perception, which affect customers in two out of five segments.

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    File URL: http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2008-057.pdf
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    Bibliographic Info

    Paper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2008-057.

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    Length: 15 pages
    Date of creation: Aug 2008
    Date of revision:
    Handle: RePEc:hum:wpaper:sfb649dp2008-057

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    Keywords: context effects; categorization; brand choice models; new brand introduction;

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    1. Huber, Joel & Puto, Christopher, 1983. " Market Boundaries and Product Choice: Illustrating Attraction and Substitution Effects," Journal of Consumer Research, University of Chicago Press, vol. 10(1), pages 31-44, June.
    2. Brownstone, David & Train, Kenneth, 1998. "Forecasting new product penetration with flexible substitution patterns," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 109-129, November.
    3. Rinus Haaijer & Michel Wedel & Marco Vriens & Tom Wansbeek, 1998. "Utility Covariances and Context Effects in Conjoint MNP Models," Marketing Science, INFORMS, vol. 17(3), pages 236-252.
    4. Chintagunta, Pradeep K., 1999. "Measuring the effects of new brand introduction on inter-brand strategic interaction," European Journal of Operational Research, Elsevier, vol. 118(2), pages 315-331, October.
    5. Huber, Joel & Payne, John W & Puto, Christopher, 1982. " Adding Asymmetrically Dominated Alternatives: Violations of Regularity and the Similarity Hypothesis," Journal of Consumer Research, University of Chicago Press, vol. 9(1), pages 90-98, June.
    6. Simonson, Itamar, 1989. " Choice Based on Reasons: The Case of Attraction and Compromise Effects," Journal of Consumer Research, University of Chicago Press, vol. 16(2), pages 158-74, September.
    7. Lynch, John G, Jr & Chakravarti, Dipankar & Mitra, Anusree, 1991. " Contrast Effects in Consumer Judgments: Changes in Mental Representations or in the Anchoring of Rating Scales?," Journal of Consumer Research, University of Chicago Press, vol. 18(3), pages 284-97, December.
    8. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
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