Abstract

Although it involves a considerable financial risk, being the first on the market provides companies with a competitive edge (Carpenter and Nakamoto, 1989, 1990). Two studies were conducted to investigate boundary conditions for the pioneering advantage and explore factors that influence consumers’ learning of brand associations about the first and late entrant. The two studies examined the impact of product complexity, product category knowledge, product type (i.e., hedonic and utilitarian) and consumers’ valuation of variety and quality on consumers’ allocation of attention and purchase behavior for pioneers and late entrants.
The results showed that product complexity influenced consumers’ allocation of attention and purchase behavior. Consumers of complex products had a higher purchase intention for the second entrant on the market. Furthermore, for complex products consumers allocated more attention to alignable differences, whereas for simple products consumers allocated more attention to nonalignable differences. Product category knowledge had a main effect on consumers’ allocation of attention, purchase intentions, preference and choice. An interaction between product type (i.e., hedonic and utilitarian) and product category knowledge was observed. Pioneering brands benefited the most when consumers perceived the product category as being high in variety and the least in product categories perceived as high in quality. Conclusions and managerial implications are presented as well as directions for future research.