Brand competition in consumer packaged goods: Sustaining large market advantages with little product differentiation

In direct competition between national brands of consumer packaged goods (CPG), one brand often has a large local share advantage over the other despite the similarity of the branded products. I present an explanation for these large and persistent advantages in the context of local competition on perceived quality or brand image. The main result of the analysis is a relation between varying degrees of product similarity and equilibrium outcomes of local share advantages. Namely, I find that asymmetric quality positioning and associated local share advantages emerge especially when competing brands are objectively similar. Conversely, local share asymmetries based on brand positioning occur less when brands are dissimilar. This paper provides two reinforcing intuitions for this result. First, if brands are objectively similar, different levels of investment in local quality perceptions co-exist in equilibrium in the same market, because this investment is often borne as fixed cost. Also, early movers will invest in high perceived quality, whereas late movers have less incentive to invest because of demand sharing and increased price competition. Second, if the local advantages are shared by competitors across markets, the persistence of these advantages is reinforced by multimarket contact. Even when local brand building is free, firms may not want to improve perceived quality in their “weak” markets if it initiates retaliation by the competition in their “strong” markets. The increase in multimarket profits from collusion is large when the products are similar, because price competition looms large

Brand competition in consumer packaged goods:Sustaining large market advantages with little product differentiation

In direct competition between national brands of consumer packaged goods (CPG), one brand often has a large local share advantage over the other despite the similarity of the branded products. I present an explanation for these large and persistent advantages in the context of local competition on perceived quality or brand image. The main result of the analysis is a relation between varying degrees of product similarity and equilibrium outcomes of local share advantages. Namely, I find that asymmetric quality positioning and associated local share advantages emerge especially when competing brands are objectively similar. Conversely, local share asymmetries based on brand positioning occur less when brands are dissimilar. This paper provides two reinforcing intuitions for this result. First, if brands are objectively similar, different levels of investment in local quality perceptions co-exist in equilibrium in the same market, because this investment is often borne as fixed cost. Also, early movers will invest in high perceived quality, whereas late movers have less incentive to invest because of demand sharing and increased price competition. Second, if the local advantages are shared by competitors across markets, the persistence of these advantages is reinforced by multimarket contact. Even when local brand building is free, firms may not want to improve perceived quality in their “weak” markets if it initiates retaliation by the competition in their “strong” markets. The increase in multimarket profits from collusion is large when the products are similar, because price competition looms large

Malandros e malandragem: Noel Rosa

Made available in DSpace on 2016-08-29T14:11:25Z (GMT). No. of bitstreams: 1 tese_5227_.pdf: 2239273 bytes, checksum: 0a75d081813d1794b335d398263752bb (MD5) Previous issue date: 2011-11-30Analisa a figura do malandro, enquanto personagem e enquanto linguagem, na produção do compositor Noel Rosa, evidenciando as características e as peculiaridades do discurso noelino, bem como as inovações introduzidas por ele no âmbito da canção popular brasileira, que resultam da conjugação de vários fatores:musical, temático, linguístico e poético. Contextualiza a figura do malandro, que vivencia significantes modificações entre o final do século XIX e as primeiras três décadas do século XX, trazendo a discussão até o período de Noel e de Getúlio Vargas. Sob a luz da temática do malandro e da malandragem, atenta para um breve panorama histórico, social, político e cultural do período estudado, observando a relação multifacetada de Noel Rosa com o malandro e a malandragem. Diz respeito a uma mudança de perspectiva que Noel, cronista da Vila Isabel, propôs sobre a visão do malandro: ele percebeu que em uma sociedade em fase de grandes transformações assim como era o Rio de Janeiro daquela época a imagem do malandro de navalha no bolso, ligada ao mundo do samba, podia representar um perigo para o progresso da carreira artística dos novos compositores

Measuring the impact of negative demand shocks on car dealer networks

The goal of this paper is to study the behavior of consumers, dealers, and manufacturers in the car sector and present an approach that can be used by managers and policy makers to investigate the impact of significant demand shocks on profits, prices, and dealer networks. More specifically, we investigate consumer demand, substitution patterns, and price decisions across different cars and dealer locations to identify dealerships with low margins or high fixed costs and measure the value of closing down dealerships for manufacturers. We apply our model empirically to the San Diego area using a transactional data set with information about the locations of dealers and consumers, as well as manufacturer and retail prices. We find strong consumer disutility for travel and find that dealers have local demand areas that are shared with a small set of competitors. We show that a reduction of market demand by 30% over two years, similar to the economic crisis of 2008–2009, results in an annual drop in prices of approximately 11%. We discuss this price drop in the context of the 2009 federal policy measure known as the Car Allowance Rebate System program. We compare predictions and actual dealership closings in the General Motors and Chrysler dealer networks as an application of our approach

Measuring the impact of negative demand shocks on car dealer networks

The goal of this paper is to study the behavior of consumers, dealers, and manufacturers in the car sector and present an approach that can be used by managers and policy makers to investigate the impact of significant demand shocks on profits, prices, and dealer networks. More specifically, we investigate consumer demand, substitution patterns, and price decisions across different cars and dealer locations to identify dealerships with low margins or high fixed costs and measure the value of closing down dealerships for manufacturers. We apply our model empirically to the San Diego area using a transactional data set with information about the locations of dealers and consumers, as well as manufacturer and retail prices. We find strong consumer disutility for travel and find that dealers have local demand areas that are shared with a small set of competitors. We show that a reduction of market demand by 30% over two years, similar to the economic crisis of 2008–2009, results in an annual drop in prices of approximately 11%. We discuss this price drop in the context of the 2009 federal policy measure known as the Car Allowance Rebate System program. We compare predictions and actual dealership closings in the General Motors and Chrysler dealer networks as an application of our approach

An empirical analysis of assortment similarities across U.S. supermarkets

This paper examines pairwise assortment similarities at U.S. supermarkets to understand how assortment composition and size are related to underlying factors that describe local store clientele, local competitive structure, and the retail outlets' characteristics. The top-selling items, which cumulatively make up 50% of sales, are sold at nearly every store, but other items are viewed as optional. We find that, within states, supermarkets owned by the same chain carry similar assortments and that the composition of their clientele and the presence of competing stores have effects on assortment similarity that are an order of magnitude smaller than ownership structure. In contrast, we find that, across states, supermarkets owned by the same chain do version their assortment. We explain this difference using extant work on the minimal efficient scale of supermarkets and on local demand effects. Furthermore, we investigate the distribution and role of regional brands. We find that regional brands are primarily distributed by small regional chains or independent stores. “Value” regional brands are primarily distributed by supermarket firms without store brands, whereas the distribution of “premium” regional brands is unrelated to the presence of store brands. We discuss our findings in the context of modeling assortment decisions and manufacturers designing distribution policies

Do Digital Video Recorders influence sales?

The authors analyze a multimillion dollar, three-year field study sponsored by five firms to assess whether enabling skipping of advertisements using digital video recorders (DVRs) affects consumers’ shopping behavior for advertised and private label goods. A large sample of households received an offer for a free DVR and service, and close to 20% accepted. Each household’s shopping history is observed for 48 consumer packaged goods categories during the 13 months before and the 26 months after the DVR offer. The authors fail to reject the null hypothesis of no DVR treatment effect on household spending on advertised branded or private label goods, either one or two years after the DVRs are shipped. The predicted DVR effect is tightly centered around 0, suggesting that the data have sufficient power to identify a true null effect. Using advertising exposure information for seven of the brands in the study, the authors offer suggestive evidence that ad skipping occurs for a relatively small fraction of the total television content viewed. The authors also discuss other potential explanations for the lack of a DVR effect

The IRI marketing data set

This paper describes a new data set available to academic researchers (at the following website: http://mktsci.pubs.informs.org). These data are comprised of store sales and consumer panel data for 30 product categories. The store sales data contain 5 years of product sales, pricing, and promotion data for all items sold in 47 U.S. markets. In two U.S. markets, the store level data are supplemented with panel-level purchase data and cover the entire population of stores. Further information is available regarding store characteristics in these markets. We address several potential applications of these data, as well as the access protocol

Endogenous sunk costs and the geographic differences in the market structures of CPG Categories

We describe the industrial market structure of CPG categories. The analysis uses a unique database spanning 31 consumer package goods (CPG) categories, 39 months, and the 50 largest US metropolitan markets. We organize our description of market structure around the notion that firms can improve brand perceptions through advertising investments, as in Sutton’s endogenous sunk cost theory. The richness of our data allow us to go beyond Sutton’s bounds test and to study the underlying forces bounding concentration away from zero. Observed advertising levels escalate in larger US markets. At the same time, the number of advertised brands in an industry appears to be invariant to market size. Therefore, the size-distribution of brands across markets is characterized by bigger (i.e. more heavily advertised) as opposed to more brands in larger markets. Correspondingly, observed concentration levels in advertising-intensive industries are bounded away from zero irrespective of market size

The evolution of brand preferences: Evidence from consumer migration

We study the long-run evolution of brand preferences, using new data on consumers' life histories and purchases of consumer packaged goods. Variation in where consumers have lived in the past allows us to isolate the causal effect of past experiences on current purchases, holding constant contemporaneous supply-side factors. We show that brand preferences form endogenously, are highly persistent, and explain 40 percent of geographic variation in market shares. Counterfactuals suggest that brand preferences create large entry barriers and durable advantages for incumbent firms and can explain the persistence of early-mover advantage over long periods