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First Mover Marketing Strategies

07/13/2014

Existing and new products are built on brands, advertising campaigns, and carefully constructed marketing strategies. One such strategy concentrates on securing and growing market share by being first to market. This is called a “first mover strategy”.

An interesting article, “Defend Your Research: Being Early Beats Being Better” in the Harvard Business Review (June 2014), reports a study by Henrich Greve and Marc-David Seidel demonstrating lifetime earnings of a first mover product exceed those of a superior product even if the first-to-market product was of inferior quality.

Greve and Seidel studied the sales of the McDonnell Douglas DC-10 airplane from 1971 to 1990 as compared it to the Lockheed L-1011 aircraft. The DC-10 suffered from design flaws, including the deadly separation of the cargo door in midflight.  Undeniably, crashes of the DC-10 in 1974 and 1979 did not appear to impact sales of the airplane. A year delay in the launch of the superior L-1011 airplane resulted in lost sales - only 242 units were sold from 1972 to 1990 compared to the DC-10’s 441 planes sold.

Other examples of inferior products that have been adopted by consumers through a first mover strategy include the QWERTY keyboard and the gasoline engine. An alphabetical keyboard makes sense logically, but the arms on typewriter keys would get stuck. The QWERTY keyboard forced an inefficiency upon the user. Likewise, steam engines were more effective but prone to breakdown so the automobile industry adopted the lower-power gasoline engine as a standard and proving inferior products can stay in the marketplace for many decades.

For businesses today, product effectiveness must be considered against the first mover advantage. A first-to-market strategy may well lend itself to a larger market share over the life cycle of the product.

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