The impact of low-price brands on the order of entry advantage

Dean C.H. Wilkie, Lester, W. Johnson, Lesley White

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    4 Citations (Scopus)
    5 Downloads (Pure)

    Abstract

    The objectives of this research are to investigate (1) if a later entrant can reduce an order of entry effect by positioning itself as a low-price brand; and (2) if the type of low-price brand impacts the effectiveness of this strategy. The impact of a low-price strategy on the order of entry effect has been modelled using three categories of over-the-counter medicines. The results indicate that, in a majority of categories and dependent on the type of low-price brand, a low-price strategy can reduce the market share penalty for being a later entrant. In addition, the results provide evidence that leveraging an existing store brand name does not provide a strategic advantage over establishing a new brand name. The implications for managers is that a low-price brand provides a motivating point of difference for consumers, which shifts brand preferences and market share away from the pioneer brand.
    Original languageEnglish
    Pages (from-to)957-973
    Number of pages17
    JournalJournal of Marketing Management
    Volume28
    Issue number7-8
    DOIs
    Publication statusPublished - Jul 2012

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