Substitute product
DESCRIPTION
A product perceived by the consumer as an alternative to another product.
A product perceived by the consumer as an alternative to another product.
KEY INSIGHTS
A substitute product, as an alternative to a product that it is able to replace, may vary from the original product in price or availability, but it usually meets the required utility. An understanding of brand-switching behavior relies on studies related to motivations behind seeking substitutes, which can relate to variety-seeking behaviour, complementarity among brands, brand unavailability, changing prices, or shifting consumer needs.
A substitute product, as an alternative to a product that it is able to replace, may vary from the original product in price or availability, but it usually meets the required utility. An understanding of brand-switching behavior relies on studies related to motivations behind seeking substitutes, which can relate to variety-seeking behaviour, complementarity among brands, brand unavailability, changing prices, or shifting consumer needs.
KEYWORD Alternative products
IMPLICATIONS
Identifying competitive substitutes and studying them is essential for marketers. Substitute products pose threats such as competitive pricing that can impose a ceiling on prices companies charge for their products. The presence of close substitutes also gives consumers a chance to make quality, performance, and price comparisons, having the luxury of another alternative to shift to. Lower switching costs also entice consumers to move to substitutes.
Identifying competitive substitutes and studying them is essential for marketers. Substitute products pose threats such as competitive pricing that can impose a ceiling on prices companies charge for their products. The presence of close substitutes also gives consumers a chance to make quality, performance, and price comparisons, having the luxury of another alternative to shift to. Lower switching costs also entice consumers to move to substitutes.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Moorthy, K. Sridhar (1984). ‘Market Segmentation, Self-Selection, and Product Line Design,’ Marketing Science, 3(4), Autumn, 288–307.
Moorthy, K. Sridhar (1984). ‘Market Segmentation, Self-Selection, and Product Line Design,’ Marketing Science, 3(4), Autumn, 288–307.
Marketing Management
Dobson, Gregory, and Kalish, Shlomo (1993). ‘Heuristics for Pricing and Positioning a Product-Line Using Conjoint and Cost Data,’ Management Science, 39(2), February, 160–175.
Dobson, Gregory, and Kalish, Shlomo (1993). ‘Heuristics for Pricing and Positioning a Product-Line Using Conjoint and Cost Data,’ Management Science, 39(2), February, 160–175.
Miller, Danny (1988). ‘Relating Porter’s Business Strategies to Environment and Structure: Analysis and Performance Implications,’ Academy of Management Journal, 31(2), June, 280–308.
Retail Marketing
Walters, Rockney G. (1991). ‘Assessing the Impact of Retail Price Promotions on Product Substitution, Complementary Purchase, and Interstore Sales Displacement,’ Journal of Marketing, 55(2), April, 17–28.
Walters, Rockney G. (1991). ‘Assessing the Impact of Retail Price Promotions on Product Substitution, Complementary Purchase, and Interstore Sales Displacement,’ Journal of Marketing, 55(2), April, 17–28.
Marketing Research
Hoffman, Elizabeth, Menkhaus, Dale J., Chakravarti, Dipankar, Field, Ray A., and Whipple, Glen D. (1993). ‘Using Laboratory Experimental Auctions in Marketing Research: A Case Study of New Packaging for Fresh Beef,’ Marketing Science, 12(3), Summer, 318–338.
Hoffman, Elizabeth, Menkhaus, Dale J., Chakravarti, Dipankar, Field, Ray A., and Whipple, Glen D. (1993). ‘Using Laboratory Experimental Auctions in Marketing Research: A Case Study of New Packaging for Fresh Beef,’ Marketing Science, 12(3), Summer, 318–338.
Sullivan, Mary (1990). ‘Measuring Image Spillovers in Umbrella-Branded Products,’ Journal of Business, 63(3), July, 309–329.
BIBLIOGRAPHY
Lattin, James M., and McAlister, Leigh (1985). ‘Using a Variety-Seeking Model to Identify Substitute and Complementary Relationships among Competing Products,’ Journal of Marketing Research, 22(3), August, 330–339.
Lattin, James M., and McAlister, Leigh (1985). ‘Using a Variety-Seeking Model to Identify Substitute and Complementary Relationships among Competing Products,’ Journal of Marketing Research, 22(3), August, 330–339.