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Explaining Competitive Reactions to New Products: An Empirical Signaling Study
Author(s) -
Heil Oliver P.,
Walters Rockney G.
Publication year - 1993
Publication title -
journal of product innovation management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.646
H-Index - 144
eISSN - 1540-5885
pISSN - 0737-6782
DOI - 10.1111/1540-5885.1010053
Subject(s) - empirical research , competition (biology) , competitive advantage , variance (accounting) , product (mathematics) , new product development , product market , economics , marketing , conceptual model , industrial organization , business , microeconomics , computer science , accounting , ecology , philosophy , geometry , mathematics , epistemology , database , biology , incentive
This article develops a conceptual model to help explain the strength of competitive reactions to new product introductions and presents the findings from a preliminary empirical investigation of this model. Being able to explain the strength of competitive reactions to new product introductions is important, as such reactions often determine a product's success or failure in the marketplace. To explain these reactions Oliver Heil and Rockney Walters investigate competitive market signals associated with new product introductions and the reactions of competing firms to the signals. The authors empirically test the hypothesized linkages among three market signals—hostility, consequences and commitment—and competitive reactions using primary data collected from a large number of US corporations. The empirical results show that the market signaling variables explain a significant portion of the variance in the perceived strength of competitive reactions to new product introductions. The study has implications for managers introducing new products and for researchers studying new product introductions and competition.