Market pioneers outsell later entrants in both consumer and industrial markets. Entry barriers arising from preemptive positioning and switching costs have been advanced to explain this market share difference, termed "pioneering advantage." However, empirical studies show that pioneering advantages are present even in mature markets in which brands reposition and switching costs are minimal. In these cases, the authors argue that pioneering advantage can arise from the process by which consumers learn about brands and form their preferences. This process can produce a preference structure that favors the pioneer, making it difficult for later entrants to "compete away" the pioneer's large market share, even if brands can reposition and switching costs are minimal.

The effects of the marketing actions of one brand can be distributed among its competitors' market shares in a complex manner. This paper presents and illustrates methods for modeling brand competition and brand strategies in markets where competitive effects can be differentially and asymmetrically distributed. We discuss the empirical specification, parameter estimation and competitive--strategy implications of the models proposed. Price and advertising competition among eleven brands of an Australian household product is used to illustrate the application of these procedures.

This paper empirically analyzes the formulation of competitive marketing strategies consisting of product quality levels, promotional expenditures and prices. Using a simultaneous equation model. We examine the use of prices and promotional spending as signals or indications of product quality, the impact of promotional spending on prices, and the impact of industry structure on the formulation of the complete marketing mix. The structural equations are developed using a theoretical model of optimal competitive marketing mix, and are estimated using business-level PIMS data, which consists largely of industrial, durable goods producers. For a cross-section of 1,100 of these businesses, three results of the estimation are especially interesting. Price-cost margins are high for high quality products suggesting that high prices indicate or signal high quality. Promotional intensity is unrelated to product quality, suggesting that promotional effort provides no reliable signals of quality. Intensely promoted products earn low price-cost margins. however, indicating that promotional spending is associated with high price sensitivity. Quality levels, promotional intensity, and price-cost margins vary significantly with competitive and market conditions such as the concentration of competitors and the stability rd' market shares, although these relationships are generally weaker than relationships between quality, promotion, and price-cost margins. Quality levels are high and margins low in markets with unstable shares or unconcentrated competitors.

The authors develop a model of brand switching which incorporates marketing mix variables, product features, and their interactions to examine patterns of brand competition. Two forms of the model are presented and least squares estimation procedures suggested. Implications of the models' parameters for analyzing the structure of markets and patterns of brand competition are discussed. The models are illustrated with an application using scanner panel data.

Business-to-business markets are increasingly operating as commodity markets. That is, customers perceive few differences among suppliers' offerings and hence make purchase decisions solely on the basis of price. This puts severe pressure on suppliers to cut prices, which harms profits. According to James Anderson and Gregory Carpenter, a supplier's smartest response is to differentiate its offerings in a way that customers will value. Possible strategies are to build knowledge or expertise that can be used to provide solutions for customers (perhaps via partnering arrangements), to persuade customers to focus less on the core product's price than on overall value, and to ensure that products and services are flexible. The authors also explain how suppliers can obtain an equitable return for providing such superior value. In many business markets, customers are perceiving fewer and fewer differences among competitors' offerings. The main reasons for this are the quality management movement in production and the greater availability of comparable alternatives from international sources. As a result, customers are making an increasing number of purchase decisions on the basis of price alone - the definition of a commodity market. They are pressuring suppliers to reduce their prices and provide additional price discounts. In industry after industry, suppliers are finding that although their sales revenues are growing, it is often at the expense of profitability. The present article will explain how suppliers can forestall or reverse this trend. Suppliers often conclude that they are in a commodity business simply because they think narrowly about the core product or service. The personal computer, hospital supplies or letter of credit that the customer purchases may be nearly or exactly the same across suppliers. But the market offerings that companies purchase are typically more than just the core product or service. They contain supplementary services, programmes and systems that enhance the value of the core product or service and that provide additional value to customers.