Positioning Brands against Large Competitors to Increase Sales

Abstract

The authors explore the effects of having a large dominant competitor and show conditions under which focusing on a competitive threat, rather than hiding it, can actually help a brand. Through lab and field studies, the authors demonstrate that highlighting a large competitor's size and close proximity can help smaller brands rather than harm them. The results show that support for small brands goes up when faced with a competitive threat from large brands versus when they are in competition with brands that are similar to them or when consumers view them outside a competitive context. This support translates into purchase intentions, real purchases, and more favorable online reviews in a study of more than 10,000 Yelp posts. The authors argue that this “framing-the-game effect” is mediated by consumers' motivation to express their views and have an impact in the marketplace through their purchase choices.