4 - Order of market entry: empirical results from the PIMS data and future research topics

Summary

Over the past twenty years, numerous empirical research studies have examined the magnitude of market pioneer advantages and the associated sources of these advantages. Review articles by Kalyanaram, Robinson, and Urban (1995); Vander Werf and Mahon (1997); Kerin, Varadarajan, and Peterson (1992); Lieberman and Montgomery (1988, 1998); and Robinson, Kalyanaram, and Urban (1994) summarize these research studies.

The PIMS data played an important role in helping to start this research stream and advancing it over time. Because most of this empirical research has been done in marketing, Scherer (1994: 173) says, “we are in debt to business scholars for illuminating the relevant relationships.” The following discussion summarizes the important role PIMS data played in examining order of market entry topics. These topics cover market share, return on investment, firm skills, and marketing strategy development. Future research topics are also discussed.

Order of market entry and market share

In the late 1970s, industry studies in the economics literature documented long-lived market share advantages for first entrants in two specific markets: pharmaceutical products (Bond and Lean 1977) and cigarettes (Whitten 1979). Still, because market pioneers in other markets such as ballpoint pens (Reynolds International Pen), hand-held electronic calculators (Bowmar Instruments), and diet colas (Royal Crown Cola) were quickly overtaken by later entrants, it was not clear whether market pioneer advantages typically surfaced in most North American markets.