Non-spatial tree models for the assessment of competitive market structure: An integrated review of the marketing and psychometric literature

This chapter presents the first attempt in marketing to assemble the vast literature dealing with a variety of non-spatial tree models for the assessment of competitive market structure. The chapter also presents taxonomy of the non-spatial approaches using two major dimensions, namely data and model characteristics. The data characteristics include: type of data (behavioral or judgmental), level of aggregation (individual, segment, or market), and measure of competition relation (perceptions, switching, or preference/choice). The model characteristics include representation (hierarchical/ultrametric, additive, networks, or latent class), type of analysis (confirmatory or exploratory), ability to accommodate marketing-mix effects, various modes of analysis, and error specifications. The chapter analyzes the brand-switching data on eight brands of soft drinks collected by Bass, Pessemier & Lehmann using various methodologies for assessment of non-spatial tree-type competitive market structure and discussed insights provided by various methods and their limitations. The chapter also discusses stochastic tree models.