1. ¹Universidad de Salamanca, Salamanca, Spain
2. ²Universidad de Castilla-La Mancha, Cuenca, Spain
3. ³Universidad de Valencia, Valencia, Spain

Correspondence: Ó González-Benito, Departamento de Administración y Economía de la Empresa, Campus Miguel de Unamuno, Universidad de Salamanca, 37007 Salamanca, Spain. E-mail: oscargb@usal.es

Received June 2006; Accepted September 2007; Published online 12 December 2007.

Abstract

This paper proposes a methodology to obtain reliable spatial maps of price competition using store-level scanner data. Specifically, a procedure to obtain a symmetric matrix of similarities between brands considering their substitutability depending on price variations is proposed. The matrix is derived from a market response model where price cross-effects are split into two components. The first component accounts for the fact that price variation in one brand can have different effects to price variation in other brands (ie j j'j' j). The second component accounts for the fact that the price of each brand can have different effects across competing brands (ie j j'j j^"). The matrix is obtained by imposing symmetry on this second component of price cross-effects. The parameterization of this symmetric matrix of similarities as the distances between the spatial representations of brands allows us to obtain the positioning maps. The proposed approach is illustrated through an empirical application.