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Fashionably late : Strategies for competing

against a pioneer advantage

August 2015

Ali Besharat
Ryan J. Langan
Carlin G. Nguyen

Journal of Business
Mohanish.C Research
PGP/23/094

Prashansa Khandelwal
PGP/23/101
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Which strategies non pioneers use to compete against early

entrants and what are the rules for the game? If any?
 What are the strategies? 3

ENHANCING STRATEGY DISTINCTIVE STRATEGY

• Providing superior features that are easily • Adding unique features to differentiate
comparable, identifiable, and justifiable themselves from the brand

• Alignable attributes • Non-alignable attributes

Samsung Galaxy S5, for Early entrants in the MP3 market

example, differentiates itself promoted the memory capacity of
from the iPhone 5S with a their players, iPod chose to compete
larger screen size and longer on the basis of click-wheel function,
battery life. firewire cable, design elements
How to use these strategies successfully against a pioneer? 4

If the customer
Enhancing strategy Distinctive strategy
do not perceive
the new
attribute as
valuable
Enhancing strategy Enhancing strategy
H1, H3 With Higher Price With Lower Price
How to use these strategies successfully against a pioneer? 5

If the customer
perceives the Enhancing strategy Distinctive strategy
new attribute as
valuable

Distinctive strategy always wins

H2, H4
irrespective of the price
How to use these strategies successfully against a pioneer? 6

The role of attribute value relevance

The role of relative price

 Experiment 1: Effect of value relevance on success of the 77
product of the late entrant.
• Participants were told they were considering a purchase of
• Pretest and stimuli
olive oil bottle.
Step 1 development.
• Participants were shown eight attributes of the product and
were asked to asked assign a value from 1 to 7 for each
• Data collection and sample.
Step 2 attribute.
• Based on the values assigned by the participants attributes
• Design and stimuli. were classified into high and low relevance.
Step 3
• Data was collected by conducting the experiment on
Amazon Mechanical Turk.
• Customer preference survey.
Step 4 • Participants were required to evaluate the attributes of
different brand of olive oil using a 3-section questionnaire.
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Results

• Preference difference = Preference points to late entrant – preference

points to pioneer.
• Late entrant product with distinctive strategy were preferred when the
values were of high relevance.
• Late entrant product was preferred when they followed enhancing
strategy, when the attributes were of low relevance.
• Thus, the experiment proved H1a and H1b hypotheses correct.
 Experiment 2: Effect price and value relevance on success of9 9

the product by late entrant.

• Pretest and stimuli • Participants were told they were considering a purchase of
Step 1 development.
olive oil bottle.
• Participants were shown new products with low and high
• Data collection and sample. relevance attributes alongside pioneer product.
Step 2
• Participants were asked to assign a price to the product from

• Design and stimuli. $ 1 - $ 15.

Step 3 • Participants were required to assign a price to new products
based on the relevance of the attributes of different brand
• Customer preference survey. of olive oil using a 3-section questionnaire.
Step 4
 Results 1
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• Preference difference = Preference points to late entrant – preference

points to pioneer.
• Late entrant product with lower price were preferred when the
attribute values were of high relevance.
• Late entrant product with higher price were preferred when the
attributes were of low relevance.
• Thus, the experiment proved H2a and H2b hypotheses correct.
 Real life examples. 111
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• Flipkart v/s Amazon • Coca-Cola v/s Red Bull • Country delight v/s Amul
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Thank You