Measuring changes in preferences and perception due to the entry of a new brand with choice data

Context effects can have a major influence on brand choice behavior after the introduction ofa new product. Based on behavioral literature, several hypotheses about the effects of a newbrand on perception, preferences and choice behavior can be derived, but studies with realchoice data are still lacking. We employ an internal market structure analysis to measurecontext effects caused by a new product in scanner panel data, and to discriminate betweenalternative theoretical explanations. An empirical investigation reveals strong support forcategorization effects and changes in perception, which affect customers in two out of fivesegments.