Journal article

Publication year: 2017

Pages: 1201-1215

Journal: Managerial and Decision Economics

Volume number: 38

Issue number: 8

ISSN: 0143-6570

eISSN: 1099-1468

DOI Link: https://doi.org/10.1002/mde.2858

Publisher: Wiley

Abstract: 
We study the rationale for an incumbent to launch a second brand when facing potential entry into a market with quality-differentiated products and a fringe producer. Depending on market size, the cost of a second brand and a potential entrant's setup cost the incumbent might use a second brand both when deterring and when accommodating entry. For low costs of brand proliferation, the high-quality firm will prevent entry with limit qualities or multiple brands. The high-quality incumbent will accommodate entry only if it cannot be prevented. Accommodation is always accompanied by an additional brand safeguarding the premium brand.

Harvard Citation style: Mueller, S. and Goetz, G. (2017) Quality competition and entry deterrence: When to launch a second brand, Managerial and Decision Economics, 38(8), pp. 1201-1215. https://doi.org/10.1002/mde.2858

APA Citation style: Mueller, S., & Goetz, G. (2017). Quality competition and entry deterrence: When to launch a second brand. Managerial and Decision Economics. 38(8), 1201-1215. https://doi.org/10.1002/mde.2858