Research Article
Analysis of Market Competition Structure Using Two-Stage Conjoint Analysis and Logit Models
Published: January 1997 · Vol. 26, No. 3 · pp. 567-595
Full Text
Abstract
The purpose of this study is to introduce a series of processes that measure purchase intention data and consideration set formation information for products (or brands) where it is difficult to obtain individual purchase records for each respondent, conduct post-hoc market segmentation based on consumers' marketing response characteristics to reflect consumer heterogeneity, and analyze market competitive structure and competitive intensity for each market segment. This study developed and used a method called two-staged conjoint analysis to obtain purchase intention data and consideration set formation information as surrogates for individual respondents' observed purchase behavior. The two-staged conjoint analysis consists of a first stage that measures respondents' consideration set formation and a second stage that is a traditional conjoint analysis method measuring respondents' preferences for product attributes. Additionally, market segmentation based on post-hoc criteria reflecting consumer heterogeneity was conducted using a logit form and latent class model. To obtain brand choice probabilities within each market segment, a multinomial logit model was used, and the competitive intensity among eight brands in the Korean jeans market under the segmented market was measured using the "Competitive Clout" and "Vulnerability" measures developed by Kamakura and Russell (1989). The first distinctive feature of this study is that it proposed two-staged conjoint analysis as a systematic data collection method for obtaining individual purchase behavior observations and consideration set formation information. The second is that it expanded the research scope to durable goods and non-durable goods for which purchase observations are difficult to obtain.
