International Marketing

Kotabe, of Kotabe and Helsen (2001), Global Marketing Management, John Wiley & Sons, New York, discusses timing of product entry decisions related to global rollout and simultaneous entry. He discusses two models of strategy related to entry timing. Discuss these strategies and identify a company, product, and situation for each strategy where it would be better to use one as opposed to the other.

Why might one strategy be better than the other? Having a first mover or pioneer advantage when entering a market may seem to give a new product an automatic advantage when embarking upon a new enterprise. In other words, to be first in a new or developing market, when determining one's entry timing would seem to give one an advantage over later entrants.

However, there is also an advantage to be had competitively in what is known as a 'later mover' advantage, where, as the old adage states, the last shall become first. Although it may be tempting to rush into a market to avoid simultaneous entries will competitors, occasionally it is better to engage in 'global rollover' to target one's global marketing strategy different, using different entry timing and introduction into different markets.

Some of the advantages of being a pioneer or first mover in a market, born out by theoretical and empirical evidence, are that first movers or pioneers are more able to exhibit technological leadership, preemption of assets, and reduce buyer-switching costs. In other words, particularly in the technological sphere, it may better to be first, as individuals will often build up the construction of personal or business technological systems around the first or pioneer advancer in any new technological field.

A company that has adopted Microsoft PCs as its computer system of choice, for instance, is unlikely to switch to Macs simply because Apples become cheaper one year, because of the overall cost involved from switching from one system to another.

The assets allocated to this sort of product are so great that it would not be economically feasible to do so, and thus by preempting these assets on the first mover's part in terms of product entry, a pioneer company may assure its place in regards to its later competitors. Thus, as Microsoft was the pioneer in personal computer operating system, it has maintained that leadership position ever since its first product was introduced more than twenty years ago. However, there are also late entry advantages for a company.

Late movers can learn from pioneering firm's mistakes. When a new product or technology is introduced, they can observe the uncertainty whether a new technology will fulfill a potential need, for instance, and streamline the technology in response to the first mover's strategy. They can also take advantage of a 'free-rider' effect, building upon the earlier company's advertising and generation of demand. Regardless, a potential entry into any market must make not of that market's size, growth, risk, government regulations, and local infrastructure.

Both strategy analysis of late and early market entry make note of the fact that simultaneous entry of similar products or technologies is disastrous, because the two tend to cancel each other out. In other words, it is better to be either first or last. In an emerging or growth market, where demand is being generated and customers may be unfamiliar with a product, first entry is usually a superior strategy.

For instance, were a new computer company to target either Vietnam or India, with a more efficient system, or even with a new type of fast food, the lack of familiarity with the product would cause the country to associate the 'brand name' with the product itself. Thus McDonald's has become synonymous with hamburgers all over the world, when it was an early entrant into developing markets, flooding markets rather than simultaneously entering or entering later than competitors.

In more established or even in platform markets where there is already a great deal of competition, however, being a late entrant may help a company understand how the product is observed within the existing market, and to learn from the mistakes or experiences of competitors. Thus a coffee manufacturer might learn.