A Stochastic Model Compelling Value Equity to Control the Brand Switching Behaviour

Abstract

The present competitive markets encourage long lasting superior value goods and services which is a big challenge for the companies. The present markets emerged out of VUCA (Volatile, Uncertain, Complex and Ambiguous) conditions in which the competitive advantage is a short lived phenomenon. Product proliferation due to the competition is both advantageous in some situations and disadvantageous in other situations.In the process of selecting the right product to his satisfaction, the customer may get baffled that force him to switch the brand within no time. The major challenge under these circumstances is to retain the customers and increase the number of loyal customers. Ehrenberg Stochastic Models are still modern to identify the reasons for brand switching and to plan the future marketing mix strategy based on the customer expectations. Brand preference of the customers has been taken in two occasions with a gap of 6 months. Joint probability and conditional probability were calculated to understand the probability of repeating the same brand and the probability of switching the brand in the next purchase. The 5 brands selected were using different USPs to capture the maximum market share. The Ehrenberg model helped us to identify the brand that retained more number of customers from switching to the other brand.