Ratchford, Brian T.
June 1990
Marketing Science;Summer90, Vol. 9 Issue 3, p207
Academic Journal
At first glance it may seem disappointing that results about optimal location in a two-dimensional product space are very sensitive to assumptions about the nature of price competition, timing of entry, whether the entry decision precedes the pricing decision, number of firms in the market, and whether consumers can economize by specializing their information search to one segment of the product space. It may seem even more disappointing that the results for two dimensions break down for a product space of more than two dimensions. But there is a sense in which these seemingly-negative results are very useful. They suggest that it is essential to look at the conditions of the specific industry being studied before drawing any broad conclusions about optimal competitive product strategies. Conversely, these results must lead one to question the advisability of attempting to draw generalizations about product strategy from large cross-sectional data bases which may not adequately account for important differences between markets.


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