Modeling and Measuring of Competitive Reactions to Changes of Marketing Mix at the Retail Level

Since the methods of measuring consumer response to changes in marketing mix have been improved successively in the last years, the problem of analyzing and forecasting competitive reactions has become one of the most challenging topics for model-based scanner data analysis. In this paper a stochastic model for the evaluation of competitive reactions is proposed. The adequacy of this approach with respect to the analysis of data reflecting market competition is exemplarily demonstrated by using point-of-sale scanner data.