Positioning Brands Against Large Competitors to Increase Sales

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Citation: Neeru Paharia, Jill Avery, Anat Keinan (2014) Positioning Brands Against Large Competitors to Increase Sales. Journal of Marketing Research (Volume 51) (RSS)
DOI (original publisher): 10.1509/jmr.13.0438
Semantic Scholar (metadata): 10.1509/jmr.13.0438
Sci-Hub (fulltext): 10.1509/jmr.13.0438
Internet Archive Scholar (search for fulltext): Positioning Brands Against Large Competitors to Increase Sales
Download: http://journals.ama.org/doi/abs/10.1509/jmr.13.0438
Tagged: consumer behavior (RSS), branding (RSS), underdog (RSS)

Summary

Small brands across categories will always be threatened by large nationally-owned brands. It had been common belief that customers would prefer larger brands to smaller brands. In this paper, the authors set out to disprove this point suggesting that if a small brand takes its large competitor head-on it is more likely to attract more customers. The authors conducted a series of studies focusing on nature of competitor, distance from competitor, product attributes, and purchase activism.

The first study was conducted in a book store where customers were divided into three groups where they read about a small local bookstore, either competing against a similar sized small bookstore, a large bookstore, or no competitor mentioned. It found that customers who thought the book store faced competition from larger brands had the highest purchases. In the second study, customers were asked about their store choice when stores were close to each other or far apart. It found that geographic proximity of small and large stores led to an increase in sales for small stores. The findings were also substantiated by researching over 10,000 Yelp reviews. The third study asked customers to choose between a large and small brand in a non-hedonic product category (airlines), which provided services at parity. They were given different contexts which provided information about the competition at different levels. The study found that consumers were most likely to choose the smaller brand if they knew it was battling for market share with the larger brand. Finally, in the fourth study, consumers were asked to hypothetically evaluate their purchase intentions in three different scenarios: small vs small, large v large, and small v large. It found that consumers’ purchase intentions were skewed when a small brand faced a large competitor, and this effect was driven through a feeling of purchase activism. Customers support small brands because they want to express their views and make a difference in the marketplace.

In effect, the paper posits that small brands would gain more benefits if their brand is positioned as a competitor to the larger brands.

Theoretical and Practical Relevance

Small brands may want to highlight their larger competitors where larger brands may want to avoid moving in across the street from smaller brands.