Investigating the effects of a line extension or new brand introduction on market structure

Market structure has been characterized by the locations of brands in the perceptual space of households (perceptual map) and the importance weights associated with the attributes of this map. It is hypothesized that a line extension or a new brand introduced into this market could potentially affect the brand locations or the importance weights. We show how a simple extension of a recent approach to market structure analysis enables us to empirically identify which, if any, of these two aspects of market structure is affected by the line extension or new brand. An empirical application to the detergent product market is provided.