TITLE

COMPETITIVE PRICE AND POSITIONING STRATEGIES

AUTHOR(S)
Hauser, John R.
PUB. DATE
January 1988
SOURCE
Marketing Science;Winter88, Vol. 7 Issue 1, p76
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Brand positioning and brand pricing are important strategic decisions for marketing managers. Such decisions are interrelated and depend upon competitive brand positions and prices. However, any unilateral decisions may encourage repositioning and price adjustment by competitors thus leading to either new market equilibria or a price/positioning "war." This paper examines such price and positioning decisions in a competitive environment by extending the 'Defender' consumer model to more complex equilibria. We assume that the brands are already in the market and that positions are "sticky" in the sense that brands cannot leapfrog one another. Among the insights for such incumbent brands are: if prices are symmetric and held constant, firms seek to reposition toward the center of the market, but price advantages by central firms can mediate that central tendency such that an equilibrium exists with positive profits; if brand positions are held constant, the Nash equilibria for prices exist and are unique, and category profits, the sum of brand profits, are maximized for maximum brand differentiation; for two and three brand markets the (subgame perfect Nash) equilibrium, where positioning decisions are made with foresight on the price equilibria, causes firms to unilaterally seek maximum brand differentiation; but for four or more brands greater foresight and/or cooperation appears necessary to reach the point of maximum brand differentiation. These results apply where the Defender consumer model is an exact description of consumer response and where the competitive reaction assumptions hold. In any empirical situation such forces might be softened resulting in differentiated, but not maximally differentiated, brands. (Pricing, Positioning)
ACCESSION #
4472780

 

Related Articles

  • Pint of View The Message Has Two Faces. Lager, Marshall // CRM Magazine;Oct2009, Vol. 13 Issue 10, p50 

    In this article, the author discusses the significance of brand marketing. He notes that brand marketing has two factors which can be positive or negative in nature. Furthermore, he suggests that one must be careful and must assist the label whether it delivers the application and answers an...

  • Brand power in hands of food fashion police. Cooper, Lou // Marketing Week;8/5/2010, Vol. 33 Issue 32, p20 

    The article discusses the efforts of food and drink marketers to attract an influential group of British consumers called taste setters with the belief that they can persuade the attitudes and choices of the rest of the consumer population. Taste setters are commonly described as a small group...

  • Capitalize quickly on'environment increment,' but beware of fads. Leaming, George F. // Marketing News;3/19/1990, Vol. 24 Issue 6, p15 

    The article discusses the increasing impact of growing environmental awareness on product pricing. Environmental awareness presents opportunities for increasing profits through effective pricing, but also presents some threats for unaware pricers. Marketers are advised to separate the...

  • Modeling Consumers' Choices of Multiple Items. Harlam, Bari A.; Lodish, Leonard M. // Journal of Marketing Research (JMR);Nov95, Vol. 32 Issue 4, p404 

    Contemporary choice models focus on choice opportunities in which consumers purchase a quantity of a single item in a product category. However, failing to recognize the possibility of assortments of multiple-item purchases can lead to incorrect conclusions about the impact of past purchase...

  • PRICING. Roegner, Eric V.; Marn, Michael V.; Zawada, Craig C. // Marketing Management;Jan/Feb2005, Vol. 14 Issue 1, p23 

    Price architecture can be more important than absolute price level in driving customer behaviors and perception. Whether selling goods or services, businesses that treat pricing as a source of competitive advantage set specific market and customer objectives for their price architecture. In...

  • Strategic Orientations in Export Pricing: A Clustering Approach to Create Firm Taxonomies. Cavusgil, S. Tamer; Kwong Chan; Chun Zhang // Journal of International Marketing;2003, Vol. 11 Issue 1, p47 

    Changes in the global economy have made pricing strategy increasingly important for exporting manufacturers. However, relatively little empirical work exists on export pricing strategies to guide marketing managers. The authors use a firm's strategic orientations in export pricing to create firm...

  • Classifying Products Strategically. Murphy, Patrick E.; Enis, Ben M. // Journal of Marketing;Jul1986, Vol. 50 Issue 3, p24 

    This article proposes an integrated product classification scheme. It is argued that, in view of the 1985 definition of marketing, one classification for all products-goods, services, and ideas-is sufficient. This classification adds "preference" products to the conventional convenience,...

  • TV3+ reruns with branding by E&P.  // Design Week;2/26/2004, Vol. 19 Issue 9, p7 

    Reports the product repositioning of Danish television channel TV3+, as it moves to attract a young, predominantly male audience.

  • COMPETITIVE DEALING STRATEGY AND DEAL VALUE ESCALATION. Fraser, Cynthia; Ginter, James L. // Management Science;Nov88, Vol. 34 Issue 11, p1315 

    This note is an extension of "A Mathematical Model for Price Promotions" (Kinberg, Rao and Shakun 1974). That paper derived the revenue maximizing deal value for a firm in a monopolistically competitive, price (quality) partitioned market having two premium brands and consumers whose responses...

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics