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The effects of imbalanced competition on demonstration strategies

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  • Heiman, Amir
  • Ofir, Chezy

Abstract

This paper analyzes the effect of competition on product demonstration decisions. Pre-purchase product demonstration enables marketers to differentiate products that are ex-post differentiated but are judged according to perceived fit, rather than actual fit, due to pre-purchase consumer uncertainty. Imbalanced competition accompanied by fit uncertainty motivates the follower to offer demonstrations to avoid a price war. This paper explores the conditions that lead the leader to retaliate. In addition to effects on quantity, competition may increase the quality of demonstrations offered by the leader.

Suggested Citation

  • Heiman, Amir & Ofir, Chezy, 2010. "The effects of imbalanced competition on demonstration strategies," International Journal of Research in Marketing, Elsevier, vol. 27(2), pages 175-187.
    • Handle: RePEc:eee:ijrema:v:27:y:2010:i:2:p:175-187
    DOI: 10.1016/j.ijresmar.2010.02.001
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    1. Heiman, Amir & Just, David R. & McWilliams, Bruce P. & Zilberman, David, 2015. "A prospect theory approach to assessing changes in parameters of insurance contracts with an application to money-back guarantees," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 54(C), pages 105-117.
    2. Ert, Eyal & Raz, Ornit & Heiman, Amir, 2016. "(Poor) seeing is believing: When direct experience impairs product promotion," International Journal of Research in Marketing, Elsevier, vol. 33(4), pages 881-895.

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