Analysis of the competitive structure in branded consumer goods markets

Abstract

In this paper we examine the Italian coffee market competitive structure during the period 1989-1992. Some market share response functions related to the most important brands are analyzed. By means of the estimates of an attraction model (Multinornial Logit or MNL) with differential cross-competitive effects we get useful information about the influence of some marketing-mix elements on brands market share. We can also evaluate the so-called baseline market share. The results point out that in the short run price is really the most effective marketing instrument for firms which compete in the coffee market. On the other hand advertising expenditure mainly contributes to brand image reinforcement.