68 The Marketing Book
situations for ease of presentation the results
are presented in a constrained 2D format.
Equally, benefit segmentation studies can be
used along with techniques such as factor
analysis to try and arrive at an estimate of the
dimensionality of the demand side.
We can be reasonably certain that the
attitude space for customers in any particular
market is generally, say, N> 3: factor analytical
studies might suggest at least four or five in
general and that of competitive offerings is of at
least a similar order. Indeed, in the latter case, if
we considered the resource-based view of the
firm very seriously we might go for a dimen-
sionality as high as the number of competitors.
Of more interest from a strategy point-of-
view is how we represent what happens in
terms of actual purchase behaviour in a com-
petitive market through time. Although there is
relatively little high quality empirical and
indeed theoretical work in this area, so far there
are intriguing results to suggest that the dimen-
sionality of the market space for this purpose
can be much reduced, although we may still
then have problems with some second order
effects in terms of market evolution. There have
been a number of attempts to apply segmenta-
tion analysis to behavioural data with much
less information as to attitudes or intention. In
one of the more detailed of such studies,
Chintagunta (1994) suggested that the dimen-
sionality of the revealed competitive space was
two-dimensional but even this might be really
an over-estimate. In his own interpretation of
the results he focuses on the degree to which
the data analysis reveals interesting differences
in terms of brand position revealed by individ-
ual purchase patterns through time. In fact, on
closer inspection it is clear that we can achieve
a high level of discrimination with the one-
dimensional map where there are two distinct
groupings, and one intermediate brand and
one ‘outlier’ brand. It is significant that these
groupings are not either brand or pack-sized
based, but a mixture. In fact, the only result in
moving from the one-dimensional to the two-
dimensional analysis is that one brand has
become less discriminated (see Wensley, 1996b).
Hence it would appear that we can rather
surprisingly reduce the effective competitive
space to a single dimension, with the possibility
of only some second order anomalies.
In terms of second order anomalies, we can
also consider some of the issues raised by the
so-called ‘compromise effect’ in choice situa-
tions where the choice between two alter-
natives depends on other, less attractive,
alternatives. In an intriguing paper, Wernerfeld
(1995b) argues that this effect can be system-
atically explained by the notion that consumers
draw inferences about their own personal
valuations from the portfolio of offerings. How-
ever, it may be that a compromise effect could
also be seen as the result of mapping an N> 1
attribute and preference space on to an N= 1 set
of purchase decisions. The classical Victorian
monograph ‘Flatland’ (Abbott, 1884; 1992) pro-
vided an early illustration of many perceptual
problems of moving between space of different
dimensions.
A simple model of spatial competition
might therefore be one in which a considerable
amount of competition can be seen as along a
single dimension, in circumstances in which
multiple offerings are possible, and where there
is no reason to believe a priorithat individual
offerings will be grouped either by common
brand or specification, with a fixed entry cost
for each item and a distribution of demand
which is multi-modal. To this extent it may
actually be true that the very simplifications
that many criticize in the Porter ‘three generic
strategies’ approach may be reasonably appro-
priate in building a first order model of
competitive market evolution (see Campbell-
Hunt, 2000). In the short term, following the
notion of ‘clout’ and ‘vulnerability’ (Cooper
and Nakanishi, 1988), we might also expect
changes in position in this competitive dimen-
sion could be a function of a whole range of
what might often be seen as tactical as well as
strategic marketing actions.
Cooper has more recently (see Cooper and
Inoue, 1996) extended his own approach to