Investigating the Relationship Between Time in Market and Pioneering Advantage

Abstract

In field studies based on pre-test market and scanner data, researchers have found evidence of pioneering advantage in the form of an order-of-entry effect: a permanent share advantage that is greatest for the first brand to enter a market and smaller for each subsequently entering brand. Conceptually, an order-of-entry effect implies that the share advantage of a market pioneer over the second entrant is constant, regardless of the length the of time the pioneer is alone in the market or the length of time since the entry of the second brand. We argue that pioneering advantage is also related to a brand's length of time in the market: the longer the brand's time in market (during which time it can impact consumer learning and influence consumer perceptions and preferences), the greater its relative share advantage. We present a parsimonious model of this time-in-market effect and test of model using two data sources: cross-category data collected and analyzed by Urban et al. (1986) and regional roll-out data for a single product category.pioneering advantage, order-of-entry

Market Structure and the Geographic Distribution of Brand Shares in Consumer Package Goods Industries

“…By establishing that spatial dependence accounts for most of the geographic variance in shares, we can test entry against alternative sources of firm asymmetries simply by looking at their spatial densities. We find that strategic asymmetries such as the relative proximity 2 A similar approach is used in Brown and Lattin (1994) in their case study of an industry that launched in the late 1980s. Although they observe the same first entrant in 37 out of 40 markets analyzed.…”

“…11 Hence, we treat each brand in our database as a single product firm. To control for brand advertising, we obtain media advertising data from Nielsen Media Research.…”

First-Mover Advantage Through Distribution: A Decomposition Approach

“…First, this work builds on extensive research on the relationship between order of entry and performance, with a focus on geographic markets. The two closest papers in this regard are Brown and Lattin (1994) and Bronnenberg, Dhar, and Dubé (2009). The former provides empirical evidence of the e¤ect of order of entry on market shares, employing cross-sectional data of two major brands in the pet food market.…”

“…i;m;t is unobserved disturbance, such as a demand shock that a¤ects the sales of the chain. s captures the time-in-market e¤ect, namely, how the absolute duration of …rm i in market m a¤ects its market share, regardless of the timing of entry relative to other competitors (e.g., Urban et al 7 1986;Brown and Lattin 1994;Hu¤ and Robinson 1994). 4 Lastly, X i;m;t is a combination of other controls, such as chain-brand …xed e¤ects, market …xed e¤ects, and an intercept.…”

Investigating Time-in-Market Effects in Kuwait Health Clubs

“…The positive time-in-market effect on market share is suggested to be one of the most dependable empirical relationships in business (Robinson and Fornell, 1985). In addition, the positive relationship between time-in-market and market share is a primary result of the first-mover advantages, derived mainly from a pioneering brand's longer time to influence consumer perceptions and thus influence consumer learning when compared to later entrant brands (Brown and Lattin, 1994).…”