Marketing Mix Reactions to Entry

Abstract

Initial product, distribution, marketing expenditure, and price reactions by incumbents are examined for 115 entrants into oligopolistic markets. The most common reaction pattern is either no reaction or only a single reaction. It is very unusual for entrants to face reactions across the entire marketing mix. Reactions in the first two years after entry are explained as a function of the entrant's strategy, incumbent characteristics, and industry characteristics. The explanation provides insights into why marketing mix reactions to entry are often limited.