Zsolt Sándor, Attila Szőcs, Matthijs R. Wildenbeest
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The impact of brand equity on profit premium in an equilibrium framework
Recent research extends the estimation and analysis of structural demand and supply models to consider the concepts of brand equity and brand value and their role in product investment decisions. In this paper, we analyze data from the Dutch market for new cars to show that differences in brand equity may also entail significant differences in marginal costs. Next, we illustrate that ignoring the role of brand equity in marginal costs, as the existing literature has, ignores the possibility that investments in brand equity may actually reduce the marginal profits for the offering. This can change investment incentives and produce different market structures.
期刊介绍:
Marketing Letters: A Journal of Research in Marketing publishes high-quality, shorter paper (under 5,000 words including abstract, main text and references, which is equivalent to 20 total pages, double-spaced with 12 point Times New Roman font) on marketing, the emphasis being on immediacy and current interest. The journal offers a medium for the truly rapid publication of research results.
The focus of Marketing Letters is on empirical findings, methodological papers, and theoretical and conceptual insights across areas of research in marketing.
Marketing Letters is required reading for anyone working in marketing science, consumer research, methodology, and marketing strategy and management.
The key subject areas and topics covered in Marketing Letters are: choice models, consumer behavior, consumer research, management science, market research, sales and advertising, marketing management, marketing research, marketing science, psychology, and statistics.
Officially cited as: Mark Lett