Batsell and Polking's market share model explicitly estimates the effects competing products have on each other's market share. The results obtained from their model contain rich information on competition among products, however they are very difficult to understand. This paper proposes a method of calculating the degree of substitutability and relative dominance between two products from the results of Batsell and Polking's model. Furthermore, based on these two types of information, a new concept of 'positioning advantage' and its mathematical model are proposed.
The proposed model of 'positioning advantage' can be used to evaluate the effects of positioning strategy which focuses on modification of customers' perception of inter-brand substitutability as well as modification of products' attributes. According to this model, a product's being preferred to a close substitute and being perceived to have low substitutability with a dominant competitor are both effective marketing strategies and are defined to be having 'positioning advantage' over the competitor.
How the proposed model can be related to the well-known Fishbein-Rosenberg class of preference model and how it can be strategically implemented are thoroughly discussed. The proposed methodology are applied to both the data used in Batsell and Polking's work(1985) and survey data.
