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Order of Market Entry: Established Empirical Generalizations, Emerging Empirical Generalizations, and Future Research

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Author Info

  • Gurumurthy Kalyanaram

    (The University of Texas at Dallas)

  • William T. Robinson

    (The University of Michigan)

  • Glen L. Urban

    (Massachusetts Institute of Technology)

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    Abstract

    Three established and four emerging empirical generalizations are identified below. The first established generalization is that there is a negative relationship between order of market entry and market share. Second, for consumer packaged goods and prescription anti-ulcer drugs, the entrant's market share divided by the first entrant's share roughly equals one divided by the square root of order of market entry. Third, in mature markets, market pioneer share advantages slowly decline over time. While the emerging generalizations require additional research support, the initial findings suggest: (1) for consumer packaged goods, order of market entry has a stronger negative relationship with trial penetration than with repeat purchase; (2) market pioneers have broader product lines than late entrants; (3) skill and resource profiles differ across market pioneers, early followers, and late entrants; and (4) order of market entry is not related to long-term survival rates. Future research topics are also discussed.

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    File URL: http://dx.doi.org/10.1287/mksc.14.3.G212
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    Bibliographic Info

    Article provided by INFORMS in its journal Marketing Science.

    Volume (Year): 14 (1995)
    Issue (Month): 3_supplement ()
    Pages: G212-G221

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    Handle: RePEc:inm:ormksc:v:14:y:1995:i:3_supplement:p:g212-g221

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    Keywords: order of market entry; early entry advantage; and market pioneer;

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    Cited by:
    1. Lopez, Luis E. & Roberts, Edward B., 2002. "First-mover advantages in regimes of weak appropriability: the case of financial services innovations," Journal of Business Research, Elsevier, vol. 55(12), pages 997-1005, December.
    2. Sarkar, M. B. & Echambadi, Raj & Agarwal, Rajshree & Sen, Bisakha, 2002. "The "When, Where, and How" of Entrant Survival: The Effects of Knowledge Regime, Technological Intensity and Start-Up Size on New Venture Survival," Working Papers 02-0102, University of Illinois at Urbana-Champaign, College of Business.
    3. Rajeev Kohli & Raaj Sah, 2005. "Some Patterns of Market Shares of Brands Within and Across Product Categories," Working Papers 0604, Harris School of Public Policy Studies, University of Chicago.
    4. Marc Fischer & Peter Leeflang & Peter Verhoef, 2010. "Drivers of peak sales for pharmaceutical brands," Quantitative Marketing and Economics, Springer, vol. 8(4), pages 429-460, December.
    5. J. Miguel Villas-Boas, 2000. "Competing with Experience Goods," Econometric Society World Congress 2000 Contributed Papers 0771, Econometric Society.
    6. Song, Michael & Zhao, Y. Lisa & Di Benedetto, C. Anthony, 2013. "Do perceived pioneering advantages lead to first-mover decisions?," Journal of Business Research, Elsevier, vol. 66(8), pages 1143-1152.
    7. Wang, Chi-Feng & Chen, Li-Yu & Chang, Shao-Chi, 2011. "International diversification and the market value of new product introduction," Journal of International Management, Elsevier, vol. 17(4), pages 333-347.
    8. Agarwal, Rajshree & Echambadi, Raj & Franco, April M. & Sarkar, M. B., 2002. "Knowledge Transfer through Congenital Learning: Spin-Out Generation, Growth and Survival," Working Papers 02-0101, University of Illinois at Urbana-Champaign, College of Business.
    9. Bauer, Hans H. & Fischer, Marc, 2000. "Product life cycle patterns for pharmaceuticals and their impact on R&D profitability of late mover products," International Business Review, Elsevier, vol. 9(6), pages 703-725, December.
    10. Garrett, Robert P. & Covin, Jeffrey G. & Slevin, Dennis P., 2009. "Market responsiveness, top management risk taking, and the role of strategic learning as determinants of market pioneering," Journal of Business Research, Elsevier, vol. 62(8), pages 782-788, August.
    11. Zulima Fernández & Belén Usero, 2007. "The erosion of pioneer advantage in the European mobile telecommunications industry," Service Business, Springer, vol. 1(3), pages 195-210, September.
    12. Buzzell, Robert D., 2004. "The PIMS program of strategy research: A retrospective appraisal," Journal of Business Research, Elsevier, vol. 57(5), pages 478-483, May.
    13. Coeurderoy, Regis & Durand, Rodolphe, 2004. "Leveraging the advantage of early entry: proprietary technologies versus cost leadership," Journal of Business Research, Elsevier, vol. 57(6), pages 583-590, June.
    14. Rhee, Byong-Duk, 2006. "First-mover disadvantages with idiosyncratic consumer tastes along unobservable characteristics," Regional Science and Urban Economics, Elsevier, vol. 36(1), pages 99-117, January.

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