Advertising as an Entry Deterrent: Evidence from UK firms
AbstractAdvertising is widely considered to be an important isolating mechanism through which firms may defend an established competitive advantage. However, there is relatively little empirical evidence on the extent of the strategic use of advertising either to deter or in response to entry. In this paper, I report on a study of the advertising practices of 843 medium-sized and large UK-based firms. Nearly one-quarter of all the advertisers surveyed state that they attribute importance to entry deterrence as an aim of their advertising. Further, one in five managers of advertising firms state that they would increase advertising expenditure if a new rival company appeared in their market. It is also apparent that there is a strong correlation between the perceived importance of advertising as an entry-deterring tool and the intensity of advertising spending. Multivariate modelling provides confirmation that the existence of a sheltered market position, and the profitability that typically accompanies this, provides a statistically significant determinant of the decision to use advertising as a strategic entry-deterring weapon.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal International Journal of the Economics of Business.
Volume (Year): 15 (2008)
Issue (Month): 1 ()
Contact details of provider:
Web page: http://www.tandfonline.com/CIJB20
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Kappes, Jan Willem & Merkert, Rico, 2013. "Barriers to entry into European aviation markets revisited: A review and analysis of managerial perceptions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 57(C), pages 58-69.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.