BRAND LOYALTY AND BARRIERS TO ENTRY.
This essay has considered a general distributed lag model of the dynamic demand functions facing established firms and potential entrants in a situation in which advertising is the only competitive weapon. This structure is compatible with empirical studies of consumer response to advertising, and i...
| Publicado en: | Southern Economic Journal Vol. 40; no. 4; pp. 579 - 589 |
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| Formato: | Artículo |
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Wiley-Blackwell
Apr74
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=hlh&AN=5198293&site=ehost-live header: @attributes: shortDbName: hlh uiTerm: 5198293 longDbName: Humanities International Complete uiTag: AN controlInfo: bkinfo: jinfo: jid: 00384038 SEJ jtl: Southern Economic Journal issn: 00384038 maglogo: N pubinfo: dt: Apr74 vid: 40 iid: 4 pid: 480 pub: Wiley-Blackwell artinfo: ui: 5198293 10.2307/1056376 ppf: 579 ppct: 10 formats: tig: atl: BRAND LOYALTY AND BARRIERS TO ENTRY. aug: au: Schmalensee, Richard su: Brand choice Distributed lags (Economics) Demand function sug: subj: Brand choice Distributed lags (Economics) Demand function ab: This essay has considered a general distributed lag model of the dynamic demand functions facing established firms and potential entrants in a situation in which advertising is the only competitive weapon. This structure is compatible with empirical studies of consumer response to advertising, and it also seems compatible with the notion that advertising creates brand loyalty and buyer inertia. <BR> In the context of this model, we showed that even though established firms have built up loyalty to their brands or sell to inert customers, this does not generally give them any advantage which can be used to deter entry. Only if capital markets are seriously imperfect and potential entrants lack valuable assets to use as collateral might the market position of the established firms hinder entry. <BR> We then argued that if potential entrants can produce and promote as efficiently as established firms, there is no presumption that demand functions differ to enable the latter to deter entry. Further, we showed that even if potential entrants behave in a naive fashion, it may not be optimal or even plausible for the established firms to spend enough on advertising to deter their entry--even if there is an asymmetry in demand conditions which favors the established firms. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: Y dt: @attributes: year: 1974 holdings: @attributes: islocal: N |
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