Effects of Brand Portfolio and Product Line Strategy on Brand Market Share: Evidence from Chinese Cellphone Market

Abstract

This paper investigates the effects of brand portfolio and product line strategy of cellphone brands’ market share in China. Based on the 15-month data of Chinese cellphone markets, the authors conducted the empirical analysis using a two-way fixed effect model. The results show that foreign cellphone brands and Chinese local cellphone brands market share response differently to price level, product line level, and geographic level variables. Increasing segment coverage and widening product line enhances both foreign and local brands’ market share. However, price-level factors have opposite influence on foreign and local brands in that price negatively relates to foreign brands’ market share but positively relates to local brands’ market share. Similarly, price concentration shows a negative impact on foreign brands but positive impact on local brands’ market share. Finally, longer brand history positively relates to foreign brands’ market share but negatively relates to local brands’ market share. This research provides useful guidelines and telecommunication implications in the context of Chinese market.