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For every new product and service entrant, there are usually many incumbents who must defend their positions in the market. Hence, defensive strategy is as least as critical as new-product strategy. Our 1983 article argued that defensive strategy critically depends on the distribution of buyer preferences and the position of the new entrant relative to the position of the incumbent in a multidimensional attribute space. Since the appearance of our 1983 article in Marketing Science, research in defensive strategy has progressed in both prescriptive and descriptive directions. Subsequent research on defensive strategy has also addressed empirical, methodological, theoretical, and substantive issues. Today, defensive strategy is more important than ever, with shorter new-product life cycles, persistent service innovation, remarkable technological change, global competition, and the invention of new channels of distributions.
Key words: marketing theory; strategy; defensive strategy; competitive strategy; heterogeneous buyer preferences; product positioning; multidimensional perceptual spaces; new-product strategy; pricing; advertising; distribution decisions; marketing strategy
The Genesis of Defender
"Defensive Marketing Strategies" (Hauser and Shugan 1983) began as an applications-focused idea. Assessor® (Silk and Urban 1978) revolutionized new product evaluation, replacing costly and timeconsuming test markets with accurate simulated stores. However, most applications of Assessor were by competitors. In fact, Right Guard deodorant (GUlette) funded the very first Assessor application to monitor a test market by a competitor, Sure (P&G). For every entrant, there were many defenders.
Unlike traditional new product models, one issue with defensive strategy was the need to very promptly estimate the new entrant's threat (e.g., Sure® deodorant) and formulate an immediate response. With insufficient time to collect traditional Assessor data, firms needed to adjust marketing-mix decisions quickly with no more than sales data. This task required departure from traditional choice models, which made a priori assumptions about how new products would capture sales from extant competitors (e.g., proportional Luce-type models). Therefore, we sought a model that would estimate who the new entrant might hurt and by how much.
Critical ideas
Several key ideas emerged that shifted the manuscript from an estimation method to a strategic model: incorporating price into a perceptual map, heterogeneous preferences, competitive response, and a focus on qualitative strategy rather than quantitative tactics.
We realized that price was central to defense and defending firms quickly changed (almost...