Would regular users of established brands be susceptible to the influence of advertisements that are repeated more than the competition, even if they have heard the advertisements before? The authors conducted an experiment to find out. They paid careful attention to ecological validity and accurate preference measurement, designing an experiment to measure the incremental effect of advertising repetition on awareness, preference shifts, and brand choice. They discuss the results of the experiment in terms of implications for managers, further research on advertising repetition, and theory development.
The authors’ study provides the first survey-based approach for examining consumer cognitions, affect, and reported behavior toward pioneer brands. Prior consumer research on pioneers has largely focused on automatic learning effects that are based on order of exposure. An entirely different issue is whether it matters to consumers to know, years after the product's introduction when follower brands are also available, that a particular brand was the product pioneer. The authors test six hypotheses, focusing on this issue as well as on new consumer behavior explanations for pioneer brand advantage. They find consumers to have a positive attitude toward pioneer brands in general, which is partially explained by their favorable perceptions of pioneer brands. In addition, a similarity is found between pioneer brand image and individual ideal self-image, which suggests that an association or desire for consistency between the two may be another explanation for favorable attitude and positive purchase intentions toward pioneer brands. The authors’ findings support the idea that a potentially enduring, relatively inimitable competitive advantage may be created by the act of “pioneership.”
The author reviews and tests the effect of cartoon trade characters on product recognition and attitude on a sample of children three to six years of age. High levels of product and trade character recognition were found, including that of Joe Camel and the Marlboro Man with cigarettes. The recognition of select trade characters tended to increase with the age of the child. The level of recognition and favorable attitude toward the product were positively associated with age except for cigarettes. The attitude for cigarettes and matches were negatively associated with age. Because the possibility of demand artifacts cannot be ruled out, these findings must be interpreted with caution.
Pioneers-- those innovative movers who enter markets before competitors are often defined as engines of economic growth while imitators are generally scorned as copycats and shameful followers. But who most often wins? Drawing on seven years of research, Steven Schnaars documents that, in sharp contrast to conventional beliefs, imitators commonly surpass pioneers as market leaders and attain the greatest financial rewards. How do they do it? In this ground-breaking book-- the first to formulate imitation strategies for managers-- Schnaars systematically examines 28 detailed case histories, from light beer to commercial jet liners, in which imitators such as Anheuser-Busch and Boeing prevailed over pioneers. He describes the marketing wars, court battles, and even personal vendettas that often resulted, and shows that imitators have several clear advantages. Pioneers are forced to spend heavily on both product and market development. They also risk making costly mistakes. Pioneers often aid in their own destruction, thrown into confusion by rapid growth, internal bickering, and the neverending search for expansion capital. Moreover, imitators do not have to risk expensive start-up costs or pursuing a market that does not exist, enabling them to quickly outmaneuver pioneers once the market is finally shaped. By patiently waiting on the sidelines while the innovator makes the mistakes, imitators can also usurp benefits from the test of time-- major defects in the product having been removed by the pioneer at an earlier stage in the game. Schnaars discusses the three basic strategies that successful imitators such as Microsoft, American Express, and Pepsi have used to dominate markets pioneered by others. First, some imitators sell lower-priced, generic versions of the pioneer's product once it becomes popular, as Bic did with ballpoint pens. Second, some firms imitate and improve upon the pioneer's product; for example, WordPerfect in the case of word processing software. Third, building on their capital, distribution, and marketing advantages that smaller pioneers cannot hope to match, imitators use the most prevalent strategy of all-- bullying their way into a pioneer's market on sheer power. In several cases a one-two-punch, or combination of strategies, is often utilized by the imitator to remove any doubt regarding their dominance in the market and in the eyes of the public. Schnaars concludes that the benefits of pioneering have been oversold, and that imitation compels recognition as a legitimate marketing strategy. It should be as much a part of a company's strategic arsenal as strategies for innovation.
Software piracy by users has been identified as the worst problem facing the software industry today. Software piracy permits the shadow diffusion of a software parallel to its legal diffusion in the marketplace, increasing its user base over time. Because of this software shadow diffusion, a software firm loses potential profits, access to a significant proportion of the software user base, opportunities for cross-selling, and marketing its other products and new generations of the software. However, shadow diffusion may influence the legal diffusion of the software. Software pirates may influence potential software users to adopt the software, and some of these adopters may become buyers. A diffusion modeling approach is suggested to track shadow diffusion and the legal diffusion of a software over time. The approach enables management to estimate (1) the pirated adoptions over time and (2) the percentage of legal adoptions due to the influence of pirates. The modeling approach is applied to study the diffusion of two types of software (spreadsheets and word processors) in the United Kingdom. The results suggest that although six of every seven software users utilized pirated copies, these pirates were responsible for generating more than 80% of new software buyers, thereby significantly influencing the legal diffusion of the software. The implications of these results are discussed.
Retailers offer temporary price promotions to attract shoppers to stores and encourage them to purchase regular price merchandise. Existing research has found little evidence that price promotions affect regular price sales, possibly because published studies have not directly examined individual purchase baskets to determine if shoppers buying promoted items also purchase regular price items. The authors match actual purchases of individual shoppers with an in-store survey to determine the relationship between regular price and promotion purchasing. The results show a significant, positive relationship between regular price and promotion purchases. Among shoppers who identify the promotion as one of their reasons for visiting the store, three-fourths make regular price purchases. On average, these shoppers spend more money on regular price merchandise than on promotion merchandise. Also, the results show that shoppers visiting the store for the promotion are no less profitable to the store than other shoppers.
PART I: CORPORATE SUCCESS PART II: BUSINESS RELATIONSHIPS PART III: DISTINCTIVE CAPABILITIES PART IV: FROM DISTINCTIVE CAPBILITIES TO COMPETITIVE ADVANTAGE PART V: COMPETITIVE STRATEGIES PART VI: THE STRATEGIC AUDIT PART VII: THE FUTURE OF STRATEGY
Brand equity components, brand attitude and brand name familiarity, influence not only the positive benefits but also the adverse consequences that follow brand leveraging. Making use of event study methods, the authors assess whether and how the stock market return—a measure of the change in expected future cash flows—associated with a brand extension announcement depends on these brand equity components. The empirical analysis indicates that stock market participants’ responses to brand extension announcements, consistent with the trade-offs inherent in brand leveraging, depend interactively and nonmonotonically on brand attitude and familiarity.
A product entry strategy—the timing of entry, the magnitude of investment at entry, and the area of competitive emphasis at entry—affects long-term performance in the marketplace. The authors develop the Entry Strategy Performance Model (ESPM) and propose an encompassing framework for product entry strategy research. They empirically test a research model derived from the ESPM through an examination and replication in the microcomputer software market. The authors’ significant findings are that initial competitive positioning and media coverage (an atypical market characteristic) drive long-term performance.
Research on influence strategies has typically been conducted in interorganizational settings. In a departure from this tradition, the authors focus on influence strategies used by managers in buying centers. They develop a three-dimensional framework for classifying six prominent influence strategies—threats, promises, recommendations, requests, legalistic pleas, and information exchange. Drawing on this framework, the authors argue that the use of a particular influence strategy by a manager is likely to be related to two classes of antecedents: source and target characteristics. Additionally, they draw on the framework to argue that the effectiveness of alternative influence strategies is likely to vary in predictable ways. The authors investigate the pervasiveness of each of the six influence strategies in a study of 187 purchasing decisions and compare the findings to those previously obtained in interorganizational settings. Findings pertaining to the study's hypotheses provide insights into the relative effectiveness of the six influence strategies and the conditions under which certain influence strategies are more likely to be used.