Brand-related and situational influences on demand elasticity

The marketing literature generally supports the view that price elasticity varies from product/brand to product/brand, influential work by Ehrenberg and England (1990) suggests that elasticities show little variation even when prices themselves are changing. The paper reports an investigation of variations in demand elasticity for foods that indicates that brand attributes (conceived as the functional and symbolic benefits provided to consumers) contribute differentially to demand elasticities. Using panel data for 1500+ consumers purchasing 4 food products over 52 weeks, the study examines how factors other than price affect demand elasticity for brands. Contrary to and in addition to Ehrenberg and England (1990) findings, price elasticities for products and brands emerge as extensively dynamic. In addition, the functional and symbolic characteristics of brands relate to these exhibited patterns of elasticity. The paper also discusses reasons for the discrepancy between these results and those reported by Ehrenberg and England (1990).