A Later Mover Advantage? the Impact of Order of Entry and Brand Characteristics on Consumer Preferences

Citation:

Jennifer Aaker and Stephen M. Nowlis (1994) ,"A Later Mover Advantage? the Impact of Order of Entry and Brand Characteristics on Consumer Preferences", in NA - Advances in Consumer Research Volume 21, eds. Chris T. Allen and Deborah Roedder John, Provo, UT : Association for Consumer Research, Pages: 139.

Advances in Consumer Research Volume 21, 1994      Page 139

A LATER MOVER ADVANTAGE? THE IMPACT OF ORDER OF ENTRY AND BRAND CHARACTERISTICS ON CONSUMER PREFERENCES

Jennifer Aaker, Stanford University

Stephen M. Nowlis, University of California, Berkeley

With the increasing number of brands in the marketplace, many researchers have begun to examine how new brands in a product category can most effectively compete against established incumbents. However, while many have speculated about the optimal marketing strategies used by later movers (vs. first movers) in a product category, few have explicitly and empirically addressed the issue of later mover strategies from a consumer decision making perspective. This session examined behavioral reasons that might account for why later movers sometimes have an advantage over a pioneer. The goal of the session was to build a stronger link between research in consumer decision making and work on innovation-based strategies. Each paper addressed this theme from a different perspective.

The first paper, by Gregory S. Carpenter, Donald R. Lehmann, Kent Nakamoto, and Suzanne B. Walchli focused on the conditions under which a first mover may be at a disadvantage relative to later movers in a product category. Because the first mover has the opportunity to shape the consumer's ideal point, it is often highly associated with a particular competitive position. As a result, the first mover may actually be at a disadvantage due to strategic inflexibility and the inability to reposition. Specifically, the authors analyzed consumer response to a market scenario where a pioneer was attacked by a differentiated brand, and responded by introducing a product line extension or a flanker brand (vs. imitating the differentiated later mover).

The second paper, by Stephen M. Nowlis and Itamar Simonson, examined the innovation-based strategy of offering new product features (e.g., an autofocus feature offered by a brand of binoculars), a strategy used by both later entrants and pioneers that reposition. The authors hypothesized that a new feature would increase the market share of a brand more when (1) the brand's price is higher than the competition, (2) the brand's quality reputation is lower than the competition, (3) the brand has limited features, (4) buyers do not expect to receive feedback after purchase about the actual performance of the new feature, and (5) buyers need to provide reasons to support their choices. Based on the first two predictions, they further hypothesized that the addition of a feature would reduce the price elasticity of a low-quality but not of a high-quality brand.

The third paper, by Jennifer Aaker, examined the impact of order-of-entry and perceptual positioning strategies on consumer preferences and choice. Based on theoretical insights from consumer decision making research, Aaker tested a series of experimental hypotheses regarding the conditions under which second and third movers could most effectively compete against an established pioneer. In addition, strategic implications for the first mover reactions and later mover positioning strategies were discussed.

The discussant, Allan Shocker, offered his perspective on each of the papers and suggested areas for future research.

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