Brand Shifting in Hierarchical Markets: A New Model and Information Equivalency

The brand shifting problem is reviewed. A new allocation of brand shifting volume is shown to be compatible with a posited hierarchical (nested) market structure, unlike previous allocations. Like the Sanddabs model on which it is based, the new allocation, called Sanddabs/Nest, uses purchase tracking information but does not require brand similarity data. The paper shows Sanddabs/Nest is equivalent to a principle of Kullback information. Implications for brand management are detailed.