Competitive Brand Strategies Traditional View- Strategies respond to what buyers want. But when buyers learn how to chose, the strategies create experiences and observation on which buyer learning is based.
Pioneer Brands Challenges- -Successfully educate the customer -Must make the right (lucky) technology choice - Sufficient funding
Classic Competitive Process Attractive Price Availability Advertisements Attractive Price Availability Advertisements According to Classic Competitive Process when there is no differentiation on these parameters the Market share should be equal (assumption:Rational Consumer). But the concept is flawed.
If two products are equally attractive. Pioneer - 100 percent relative to itself 6th entrant - Less than half of the pioneer Source- “market share rewards to pioneering brands” Urban, Glen, Theresa Carter, Gaskin
First Movers Advantage Preference Formation Category Association – architectural standards Awareness and Recall Preemptive Positioning Perceived Risk of other Brands Buyer Entry
Conditions for late Entrants Well-educated buyers- own set of perceptions Risk in technology – comparatively low Competitor set – well defined
Late Entry Strategy Fast-following Strategy- Playing the game of the Pioneer in a better way with more resources. Differentiation Strategy- Recognizes power of the Pioneer and define themselves as fundamentally different. Innovation Strategy- Redefine what buyers know or perceive about the established brand and the market.
Pioneer and Late-Entry Brand Preference Pioneer Pioneer Advantage Market Share Late Entrant Late Entrant Advantage Dissimilarity of Brand Extension
Power of Later According to Golderand Tellisresearch- 50 Product categories were categorized on the timing of entry as the market Pioneer, early followers, later entrants. In the 50 markets examined- Pioneer retained its leadership for only 5 yrs. Early followers flopped only 8%. Fast followers led in 53% of market.