Pioneering new geographical markets

Abstract

This study examines pioneering as a strategic option when entering new geographic markets. Based on an extensive literature review of pioneering advantages and brand strategies it became clear that the concept of pioneering was not well defined and covered several different phenomena. Existing research did not differentiate between being a pioneer in a new geographic market and product innovations effectively creating new market segments in old territories. The issue this study was most concerned with was whether it is advantageous for a well‐established fast‐moving consumer goods (FMCG) brand from a western country to enter a new geographic market as a pioneer. Much of the existing literature and common wisdom suggests that being first in a market is per se an advantage. Pioneering advantage is seen to arise from the opportunity to erect or strengthen entry barriers which would prevent or delay competitor entry, or from behavioural advantages like the “head start effect” giving the pioneer time and opportunity to establish his brand as the reference brand on the top of the consumers mind before competition arrives. Based upon a case study approach using grounded theory this study found that pioneering FMCG brands in central Europe did not necessarily gain an advantage over their competitors who entered later. In many cases, “following” seems to be a more attractive option, a finding which challenges the conventional view. A number of other factors influencing pioneering advantage were also identified, particularly in the context of new geographic markets. These have not been recognised at all previously or, alternatively, have not been recognised as having a significant impact on the opportunity to gain and exploit pioneering advantages as part of an overall strategy.