New Product Entry: the Moderating Role of Compromise Effect on Pioneering Advantage

Consumer research has mainly focused on the static nature of the compromise effect without considering how time varying factors may influence decision rules and the composition of choice set. New products entry and the position occupied by new brands modify the context of choice and consequently can change preferences. This article examines the extend to which order of entry affects the robustness of compromise effect. Our results demonstrate that a pioneer brand could be negatively or positively affected by the arrival of a new alternative when this turns it into an extreme or a compromise alternative.