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Brand Capital and Incumbent Firms' Positions in Evolving Markets

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  • Thomas, Louis A

Abstract

In many advertising-intensive industries, one observes market share persistence, i.e., firms maintaining lead market shares over long periods of time. The author hypothesizes that firms that have the largest stock of well-established brands, a stock that he terms brand capital, are most likely to introduce new products in response to new market information about consumer preferences. Firms with less brand capital delay their introductions until the uncertainty concerning the market size is reduced. The author presents empirical support in a study of new product introductions in the U.S. beverage industry. Copyright 1995 by MIT Press.

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  • Thomas, Louis A, 1995. "Brand Capital and Incumbent Firms' Positions in Evolving Markets," The Review of Economics and Statistics, MIT Press, vol. 77(3), pages 522-534, August.
    • Handle: RePEc:tpr:restat:v:77:y:1995:i:3:p:522-34
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    Cited by:

    1. Gentier Antoine, 2000. "Liberte Bancaire Ou Regulation Par Une Autorite Monetaire ?," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 10(1), pages 1-38, March.
    2. Dwibedy, Punyashlok, 2022. "Informal competition and product innovation decisions of new ventures and incumbents across developing and transitioning countries," Journal of Business Venturing Insights, Elsevier, vol. 17(C).
    3. Jan-Benedict E. M. Steenkamp & Vincent R. Nijs & Dominique M. Hanssens & Marnik G. Dekimpe, 2005. "Competitive Reactions to Advertising and Promotion Attacks," Marketing Science, INFORMS, vol. 24(1), pages 35-54, September.
    4. Catherine Matraves & Laura Rondi, 2007. "Product Differentiation, Industry Concentration and Market Share Turbulence," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 14(1), pages 37-57.
    5. Goldsmith, Peter D. & Turan, Nesve A. & Gow, Hamish R., 2003. "Food Safety In The Meat Industry: A Regulatory Quagmire," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 6(1), pages 1-13.
    6. Armbruster, Kathrin & Beckmann, Michael & Kuhn, Dieter, 2012. "Task Allocation and Corporate Performance : is There a First-Mover Advantage?," Working papers 2012/07, Faculty of Business and Economics - University of Basel.
    7. Thomas, Louis A., 1999. "Incumbent firms' response to entry: Price, advertising, and new product introduction," International Journal of Industrial Organization, Elsevier, vol. 17(4), pages 527-555, May.
    8. Wipo, 2013. "World Intellectual Property Report 2013 - Brands: Reputation and Image in the Global Marketplace," WIPO Economics & Statistics Series, World Intellectual Property Organization - Economics and Statistics Division, number 2013:944, April.
    9. Hernán Herrera Echeverry, 2007. "Lanzamiento de nuevas marcas en industrias de productos homogéneos básicos con altos niveles de concentración," Documentos de Trabajo de Valor Público 11812, Universidad EAFIT.
    10. Layton, David F., 2000. "Random Coefficient Models for Stated Preference Surveys," Journal of Environmental Economics and Management, Elsevier, vol. 40(1), pages 21-36, July.

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