Attraction Market-Share Model
The attraction market-share model expresses each brand's market share as its own 'attraction' divided by the total attraction of all brands competing in the market, guaranteeing shares that are non-negative and sum to one by construction. Its theoretical foundation is the 1975 'market share theorem' of Bell, Keeney, and Little, who proved that the familiar share-equals-effort-over-total-effort relationship follows from three mild axioms about attraction. Cooper and Nakanishi turned this into a practical empirical technology, the Multiplicative Competitive Interaction (MCI) model and its exponential MNL variant, in which attraction is built from the marketing mix — price, distribution, advertising, promotion. A log-centering transformation converts the inherently nonlinear share equation into a linear regression that can be estimated by ordinary or generalized least squares. The fitted parameters yield managerially crucial own- and cross-elasticities of share that respect the logically-consistent zero-sum nature of competition. The approach is a cornerstone of competitive market-share analysis and a close cousin of brand-choice logit models.
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- Bell, D. E., Keeney, R. L., & Little, J. D. C. (1975). A Market Share Theorem. Journal of Marketing Research, 12(2), 136-141. · DOI 10.1177/002224377501200202
- Cooper, L. G., & Nakanishi, M. (1988). Market-Share Analysis: Evaluating Competitive Marketing Effectiveness. Kluwer Academic Publishers. · ISBN 9780898382785
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