Brand vulnerability to product assortments and prices

Abstract

The assortment of brands that a specific brand competes against varies from one point of sale to another. The competitive landscape changes further because of within-assortment price variations at each location. The joint variation in assortment composition and pricing creates a complex set of scenarios under which a brand needs to compete. In this paper, we develop an approach to assess changes in a brand's vulnerability under alternative assortment and price configurations. We specifically propose that, in market environments with high variability in the competitive set and prices, it is more appropriate to assess a brand's strength relative to alternative assortment configurations rather than against individual competing brands. We build a model that depicts a brand's vulnerability in latent assortment space rather than the traditional brand space. The results from an illustrative model application are used to draw inferences about changes in brand vulnerabilities under shallow and deep promotions.

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