Tuesday, November 26, 2013

Associations Note: Being 1st to Market Still Relevant


Quick:

  • Who was the second man on the moon? 
  • Who was runnerup to last year’s World Series? 
  • Who was the second person to fly non-stop, solo across the Atlantic?

We’ve been told for decades that it is important to be first to market with a product or service.

At the 2012 Content Marketing World Conference, Sam Sebastin, Google’ Director of B2B Markets, talked about the Zero Moment of Truth.

Rule #5: Be Fast!


Sam shared the case of two companies providing an app with free recipes.

Better Crocker launched its app first and quickly reached 81,800 users. Five months later, Kraft launched its recipe app (which Sam described as “better”) but reached only 9,900 users. 

Sam’s conclusion: by being first, Betty Crocker got 8 times more users that Kraft.

The Advantages of Being First  

In three experiments, when making quick choices, participants consistently preferred people (salespersons, teams, criminals on parole) or consumer goods presented first as opposed to similar offerings in second and sequential positions. The authors say their findings may have practical applications in a variety of settings including consumer marketing.

Dana R. Carney, assistant professor of management, University of California, Berkeley's Haas School of Business, says the "first is best" effect suggests that firsts are preferred even when completely unwarranted and irrational.

Think Twice About Being First to Market 

John Tozzi wrote this piece in BusinessWeek (5/19/09). (Note: The article is behind a pay firewall.)  Here's one of his key points:

  • New academic research suggests one way entrepreneurs can evaluate whether they should enter a market first or wait on the sidelines. The decision depends on how hostile the learning environment is; that is, how much entrepreneurs can learn by observing other players before they launch compared to what they learn from participating after they enter, according to Moren Levesque, an entrepreneurship researcher at the University of Waterloo. Levesque, along with professors Maria Minniti of Southern Methodist University and Dean Shepherd of Indiana University, used a mathematical model to weigh the risks and benefits of entering the market early. Their research, published in March in the journal Entrepreneurship Theory and Practice is among the first to explore "how different learning environments may influence the entry behavior of entrepreneurs." 
Here are links to two related posts for association executives:

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