Products generally have a well-defined set of competitors. This knowledge allows firms to utilize advanced analytics to understand and quantify the ramifications of their most important marketing lever, price. In addition to recognizing and quantifying how their own-price effects whether or not consumers purchase their product, firms must also understand how their competitors’ prices affect the probability that consumer purchase their product. Firms may also want to know how their price affects their competitors’ sales, so that they know exactly who they are losing sales to or extracting sales from. This kind of analysis involves advanced analytical methods of multinomial logit/probit models. While these models are powerful and provide the answers to the questions above, the results are often difficult to convey to even the most sophisticated marketing professionals. As a result they provide limited insight and actionability for the firms. We show how these results can be presented so that own-price and cross price affects can be clearly visualized without resorting to regression outputs. Furthermore, we provide an interactive data visualization so that marketing professionals and stakeholders can analyze various marketing scenarios.
Director of Advanced Marketing Analytics
Sonoma Research Associates
Steven Cuellar is Director of Advanced Marketing Analytics as Sonoma Research Associates. Dr. Cuellar is also Professor and Chair of the Department of Economics at Sonoma State University where he teaches courses on consumer behavior, quantitative marketing, econometrics and labor economics. His research interests include issues related to pricing, promotion, branding and measuring the effects of marketing campaigns. Dr. Cuellar’s research has been published in national and international academic journals as well as trade and industry publications and he has been a featured speaker at academic and industry conferences.