An ecological niche theory approach to the measurement of brand competition

Marketers have long advocated the use of ecological theory to study markets, but the abstract definitions of key constructs have hampered empirical applications. We take a first step in applying ecological theory to product markets by quantifying concepts such as niches, niche breadth, and niche overlap. We propose a new approach for measuring competitive intensity and identifying competitive submarkets. This measure defines competition between brands as the extent to which brands compete for the same customers. The approach is suitable for both durable and nondurable goods, for markets with many brands, and it can be used to assess competition between existing and hypothetical brands. We illustrate our approach using data on the magazine market and offer suggestions for future research.