competitive brand strategies
TRANSCRIPT
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
0.2
0.4
0.6
0.8
1
1.2
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
e
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.