The Space-Sales Ratio as a Measure of Product Differentiation

This paper presents an analytical model which has been used to discover systematic relationships in the complex area of consumer acceptance and product differentiation. A method is developed for quantifying the concept of product differentiation and empirically observing the degree of differentiation of competing brands. The model also provides a basis for assessing the relative importance of “brand effect” and display exposure as determinants of fluid milk sales in retail food stores. Analysis of the data presented indicates that product differentiation is an important determinant of sales and that scale economies in promotion may be important.