Asymmetric quality‐tier competition: an alternative explanation

Abstract

Purpose This paper aims to offer an alternative explanation for asymmetric quality‐tier competition. Design/methodology/approach A conceptual framework based on quality‐price tradeoff is used in the study to derive research hypotheses and scanner panel data are used for empirical validation. Findings The paper finds that the concept of tradeoffs offers a simple explanation for asymmetric competition in favor of high quality brands; as the quality differential increases, asymmetry increases; as the price differential increases, the asymmetry decreases. Practical implications The framework and findings can inform pricing strategies for brands in different quality tiers. Originality/value The paper offers an alternative explanation for asymmetric competition.

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