FIRST MOVER VERSUS LATE MOVER THEORY
Today we are going develop a new product that is new to the market this product is highly needed in every household and in the industry. This new product will definitely brought about positive changes in our lives. This product will be called “Neo-electro magnet”. This product is another electricity producing apparatus that uses magnet to produce and store additional electricity from dead batteries. It will definitely make dead batteries come alive even if it is not a rechargeable type.
But before we introduce our product to the market we will have to discuss the different variation we will undertake. We are going to prove two marketing theory and discuss its advantages and disadvantages, later on we will decide what theory we are going to use. We are doing this to ensure competitive advantage in the market.
1. The first mover Theory: May be described as the Pioneer trendsetter in the market as the saying goes “the early bird catches the worm”. It has the following;
· Advantages. 1. You become the market leader since you have a high preference among customers, 2.High Profitability because you can reach a larger market, 3. No or limited competitor so you need to take advantage of this opportunities with less rivalry 4. High patent control. Your competition should be aware of your product rights and privileges being the leader. Examples are Xerox Machine, Quaker oats, Yahoo, ABT Telephone, Kodak all these sample brands are still continuously getting market popularity maintaining their advantages.
· Disadvantages like 1. Free ride, your competitors is most likely to imitate or innovate your product. 2. Technological discontinuity, market leader tend to satisfy with their products before the entry of late movers. 3. Market uncertainty. You will need to exploit the market and distribute in small scale and when you succeed you will then need to expand to be accepted. 4. Adaptability- Beware of the changing phase of competitors since you is likely to be on the list of their innovation concern. Ex. Ford, Cooper and Schendel steam locomotive are replaced by other brands, Brothers typewriter are now replaced by PC, Pocket belle pager are now replaced by Cellphone. VHs are out DVD are in.
2. The Late Mover Theory: They are companies who respond to a competitive action but only after a considerable time after the first mover’s action have taken place and we may also say that this theory has its own advantage and disadvantages. “Wait and learn is its prime concern”.
· Advantages. 1. Leverage of information- you can learn from your competitors, 2. Late mover’s innovation- must be more adaptable and highly advance than the first mover to be accepted. 3. Possible market overtakes- If we can do this then we will be the market leader and eliminate the first mover 4. Easy outsourcing -let us explore the first mover’s resources where they got it. Ex. DVD, Nokia Cellphone, Dell Computer, Coca cola bottled water and Facebook. All these products outsell their competition.
· Disadvantages: 1. Free rides- Your products are most likely to be called an imitation 2. Resolution of uncertainty- The market may or may not be viable or may not be sure if your new products will work for them unlike the first movers. 3. First mover inertia- Because of the effect of first mover’s market leadership a shift in customer preference may not occur. 4. Timing- To introduce a product one must make sure that is it in the proper time or waste all your energy and resources during the market introduction. Examples: Ovaltine cannot get ahead with Milo, Interactive Encyclopedia cannot replace conventional books, Solar panel because of high price, Barnesandnoble.com are still far behind Amazon,com. Yahoo.com is still the best search engines among its competing search engines like ask.com etc.
Given the following proposition can’t help but to choose to become the first mover since we are new to the market and it shows that we have a very low failure rate. But we should be aware that late movers will find their way to compete with our products. Therefore we will need to develop continuous innovations and highly develop technological advancement and breakthrough with our products. Therefore if we have to compete we will be competing with ourselves.
We will undertake all the necessary precaution to stay on top. We will be using all our resources to create high impact in our market introduction. And ensure to strengthen customers support and loyalty.
Credit:ivythesis.typepad.com
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