TITLE

Late Mover Advantage: How Innovative Late Entrants Outsell Pioneers

AUTHOR(S)
Shankar, Venkatesh; Carpenter, Gregory S.; Krishnamurthi, Lakshman
PUB. DATE
February 1998
SOURCE
Journal of Marketing Research (JMR);Feb1998, Vol. 35 Issue 1, p54
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Although pioneers outsell late movers in many markets, in some cases innovative late entry has produced some remarkably successful brands that outsell pioneers. The mechanisms through which innovative late movers outsell pioneers are unclear. To identify these mechanisms, the authors develop a brand-level model in which brand sales are decomposed into trials and repeat purchases. The model captures diffusion and marketing mix effects on brand trials and includes the differential impacts of innovative and noninnovative competitors' diffusion on these effects. The authors develop hypotheses on how the diffusion and marketing mix parameters of the brands differ by market entry strategy (pioneering, innovative late entry, and noninnovative late entry). The authors test these hypotheses using data from 13 brands in two pharmaceutical product categories. The results show that an innovative late mover can create a sustainable advantage by enjoying a higher market potential and a higher repeat purchase rate than either the pioneer or noninnovative late movers, growing faster than the pioneer, slowing the pioneer's diffusion, and reducing the pioneer's marketing spending effectiveness. Innovative late movers are advantaged asymmetrically in that their diffusion can hurt the sales of other brands, but their sales are not affected by competitors' diffusion. In contrast, noninnovative late movers face smaller potential markets, lower repeat rates, and less marketing effectiveness compared with the pioneer.
ACCESSION #
228141

 

Related Articles

  • Sources of Market Pioneer Advantages: The Case of Industrial Goods Industries. Robinson, William T. // Journal of Marketing Research (JMR);Feb1988, Vol. 25 Issue 1, p87 

    In a broad cross-section of industrial goods businesses, market pioneers tend to have substantially higher market shares than late entrants. A stronger product in relation to competitors' products and certain industry characteristics help explain these pioneer share advantages. Though pioneering...

  • An Empirical Study of Declining Lead Times: Potential Ramifications on the Performance of Early Market Entrants. Poletti, Michael J.; Engelland, Brian T.; Ling, Howard G. // Journal of Marketing Theory & Practice;Winter2011, Vol. 19 Issue 1, p27 

    This study examines innovation lead time, the construct believed to be the key determinant of launch order strategic value. Anecdotal evidence has suggested that innovation lead times are continuing to decrease as the result of new product development acceleration strategies. However, broadscale...

  • WHY DO FIRMS BEHAVE SIMILARLY? A STUDY ON NEW PRODUCT INTRODUCTIONS IN THE JAPANESE SOFT-DRINK INDUSTRY. ASABA, SHIGERU; LIEBERMAN, MARVIN B. // Academy of Management Proceedings & Membership Directory;1999, pM1 

    We analyze new product introduction in the Japanese soft-drink industry to distinguish among theories of why firms exhibit similar behavior. Some theories suggest that firms mimic others with comparable resource endowments in order to mitigate rivalry or to minimize risk. Other theories suggest...

  • the debate. Dodds, Steven; Buckle, Sarah; Smith, Craig; Reeves, Richard; Felstead, Oliver; Clifton, Tim; Thompson, Peter // Marketing Week (01419285);3/22/2012', Vol. 35 Issue 12, p8 

    Several editorial articles are provided for the week of March 22, 2012. Steven Dodds argues how brand values can provide a competitive advantage. Craig Smith discusses how brands can foster loyalty through innovation. Tim Clifton announces an event sponsored by the National Advertising...

  • CREATIVE STRATEGY: A MANAGEMENT PERSPECTIVE. Frazer, Charles // Journal of Advertising;1983, Vol. 12 Issue 4, p36 

    This paper suggests that the literature of advertising management and decision making has given little attention to the selection of creative strategy, and that the identification of specific strategic alternatives would make both the choices available and their implications clearer for planning...

  • The Second Meaning of the Word "Creative" Should Be First in the Hearts of Advertising People. Daniels, Droper // Journal of Advertising;1974, Vol. 3 Issue 1, p31 

    Those who complain that pressure to sell is squeezing the creativity out of advertising forget, if they ever knew, that the second meaning of the word "creative" is "PRODUCTIVE". As the author points out, Webster's Collegiate Dictionary even spells it in capital letters. Advertising should be...

  • Experiencing Creativity in the Organization: From Individual Creativity to Collective Creativity. Parjanen, Satu // Interdisciplinary Journal of Information, Knowledge & Management;2012, Vol. 7, p109 

    Creativity is a component that enhances the ability of organizations to retain their competitive advantage as well as to stay ahead of their competitors. For creative organizations, the ideas and insights of their employees are of crucial importance. Most of the creativity research concentrates...

  • Extended Services Marketing Mix and Emergence of Additional Marketing Ps. Afridi, Fahd Khan // Journal of Managerial Sciences;Jan-Jun2009, Vol. 3 Issue 1, p137 

    The article explores the extended services marketing implemented by businesses to be competitive in the market. It discusses the emergence of additional marketing P's including people, physical evidence and process. It describes several major differences between marketing a service-based...

  • Is the First to Market the First to Fail? Empirical Evidence for Industrial Goods Businesses. Robinson, William T.; Min, Sungwook // Journal of Marketing Research (JMR);Feb2002, Vol. 39 Issue 1, p120 

    When entering a new market, the first entrant typically faces the greatest market and technological uncertainties. Memorable phrases reflect the associated survival risk, such as “the first to market is the first to fail” and “the pioneer is the one with the arrows in its...

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sign out of this library

Other Topics