Management Science and Financial Engineering

The Korean Operations Research and Management Science Society (한국경영과학회)
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Influencing Factors in High vs. Low Share Brand Choice

  • Kang, Yong-Soon (School of Management, Binghamton University-State University of New York) ;
  • Moon, Sang-Kil (College of Management, North Carolina State University) ;
  • Suh, Jae-Beom (College of Business Administration, Ajou University)
  • Published : 2007.05.31
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Abstract

We investigate factors that influence the choice of high-share brands(HSBs) vs. low-share brands(LSBs) among various product and consumer characteristics related to brand-share perceptions. Specifically, using 8 product categories varying in terms of purchase decision involvement, we show how the influencing factors vary across the categories. At the general level that cover all the 8 categories, our hierarchical Bayesian regressions analysis shows that factors that favor high-share brands are purchase decision involvement, search goods, experience goods, price-quality relationship, positive network externalities, and price-prestige beliefs. Conversely, consumers who value variety seeking and need for uniqueness favor low-share brands. The effects of these factors, however, vary across product categories. The identification of these characteristics can help brand managers establish a more effective brand-share strategy in such areas as setting an optimal market share goal, extending a brand, and developing ad copy. Furthermore, our consumer segmentation analysis demonstrates the general market has two distinct segments - (1) a segment composed of HSB buyers(86%) and (2) a segment composed of LSB buyers(14%). The two segments are also shown to have different significant factors that explain their brand choice. Our segmentation analysis can help marketers establish a marketing strategy that targets a specific segment of interest.

Keywords

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