There are, however, three important limitations to building marketing plans on either of these competitive scenarios. First, such static, single-period strategies do not provide insight into the actions undertaken over time by major manufacturers and retailers. As we called in the CCHM study, it is time to investigate dynamic, multiperiod strategies. Second, major sources of asymmetries are missing from the CCHM equilibrium analysis. There are two main sources of asymmetries.
Asymmetries can arise from stable, cross-competitive effects.
When regional brands go on sale they exert pressure on the economy and private-label brands that these brands can not return. These are asymmetric cross-competitive effects. One brand on sale by itself might gain much more than if it was promoted along with four other brands in the category. While the CCHM study incorporated measures of distinctiveness into their development of methods for reflecting asymmetric competition, the equilibrium analysis used a simpler model that did not account for this source of asymmetries. Third, the CCHM effort studied market share, while the great swings in sales levels we observe in retail scanner data encourage us to study the strategic implications of asymmetric sales response.