A Large And Rewarding Market PDF Download

Excerpt from Market Share Rewards to Pioneering Brands: An Empirical Analysis and Strategic Implications One strategy for new product development is based on innovation and the creation of new markets. It is expensive and risky (Urban and Hauser, 1980). The costs of development are often large and the first firm in a market must allocate funds to make consumers aware of its product and convince them to buy it. The risk of failure is high because the potential demand is not known with certainty. An alternative strategy is based on being the second (or later) entrant into the market. The costs may be lower since the innovator has created the primary demand and the basic product design exists; the risk also may be less because a proven demand exists. If an equal market share can be gained, this stratregy could be more profitable. If, on the other hand, as a result of being the first entrant in a market, a dominant market share is achieved and maintained, the innovation strategy may be superior. The purpose of this paper is to investigate the market share effects of being a pioneering brand. If the market grants a long-run market share reward to early entrants, this would encourage innovation. From a public policy point of view, this would serve a similar function to that of patents by providing an additional reward to innovators. Although patents sometimes provide protection, in many cases they are ineffective because of difficulties of establishing and protecting the rights and the ability of other firms to invent around the patent as technology advances (von Hippel, 1982). This difficulty of protecting an innovation is compounded by the fact that imitators generally take less time and require fewer funds to copy the innovation (Mansfield, Schwartz, and Wagner, 1981). If pioneering brands earn a long run market share advantage, the effectiveness of patent protection may be less critical in providing incentives for innovation and firms may be more willing to innovate without patent protection. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.