Interesting Results
Linking Price Discounting with Market Share
High-share brands have generally been regarded as less vulnerable to price cuts by low-share brands than the reverse; however, 2002 empirical research1 has challenged this assumption. Across a wide variety of supermarket product categories, the impact of a price reduction by low-share brands on the market share or sales of high-share brands was found to be greater than the effect that a price reduction by high-share brands had on low-share brands. At least for supermarket products, low-share brands appear to have more to gain from price discounts than high-share brands do.
1 Sethuraman, Raj and V. Srinivasan (2002), “The Asymmetric Share Effect: An Empirical Generalization on Cross-Price Effects”, Journal of Marketing Research, 39, 379-386.