Product Relocation and Resistance to Change

Tarek Selim ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper considers a duopoly market characterization where demand is horizontally differentiated by taste while firms vertically differentiate their products based on quality location. However, firms are able to relocate their product offerings based on changing consumer taste. In general, it is found that a “resistance to change” exists such that firms dislike quality relocation and prefer stable preferences in quality. Yet, a relative change in horizontal preferences may result in wider quality spreads in the market through vertical quality relocations, even though the resistance to change argument may still hold good.

Keywords: brand relocation; quality choice; brand space positioning; product differentiation; market asymmetry; quality characteristics; consumer demand; supply repositioning (search for similar items in EconPapers)
JEL-codes: C72 D21 D47 D49 L15 M21 (search for similar items in EconPapers)
Date: 2006-09
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:119507

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