Abstract
In this paper we propose a model which combines the spatial interaction models with the latest developments in internal market structure analysis and allows us to infer supermarket competition from revealed preference data. Using a nested logit formulation we model consumers' store choice decisions to be a two stage process in which consumers choose first the suburb and then the store from which to buy groceries. Hence, our method allows retail managers not only to understand the advantage (or disadvantage) of having their store chain in a particular area but also assess the competition within that area. Comparisons to Factor Analytic Choice Map is made.
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Sinha, A. Understanding Supermarket Competition Using Choice Maps. Marketing Letters 11, 21–35 (2000). https://doi.org/10.1023/A:1008190508803
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DOI: https://doi.org/10.1023/A:1008190508803