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 ProcessAttractive PriceAvailability Advertisements

Attractive PriceAvailability Advertisements

Market Share

Brand 1Brand 2

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

1 2 3 4 5 60

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Order of Entry and Relative Market Share

Series 1

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

Late-Entrants

Lirsch Diet Cola

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

Late Entrant

Pioneer

Late Entrant Advantage

Pioneer Advantage

Mar

ket

Shar

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Dissimilarity of Brand Extension

Power of Later

• According to Golder and Tellis research- 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.