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Competitive Reactions to Product Quality Improvements in Industrial Markets

Jos Lemmink (University of Limburg, Maastricht, The Netherlands.)
Hans Kasper (University of Limburg, Maastricht, The Netherlands.)

European Journal of Marketing

ISSN: 0309-0566

Article publication date: 1 December 1994

2989

Abstract

Generally it is assumed that quality improvements are important tools for companies to gain a sustainable competitive advantage. The result of product quality improvements depends, for example on the reaction of competitors. If competitors react intensively and quickly, the outcome of a product quality improvement might be different from what was expected. From an empirical study in The Netherlands, concludes that, in general, the typical reaction of competitors is quite a fast reaction with only one marketing mix instrument. The intensity of the competitive reaction appears to be lower in mature and declining markets than it is in growing markets, and improvements in reliability and service quality aspects appear to be important weapons in quality competition. Service quality improvements are difficult to imitate swiftly. Moreover, they lead to higher market shares for the initiating company. Quality competition based on other quality aspects, like conformance to standards and performance, does not result in a real competitive advantage. For these quality improvements, following a “traditional” competitive pattern of action and, more‐or‐less the same reaction, are quite easy to imitate. They are also needed just to keep up with the leading competitors in the industry. However, they do not lead to long‐term sustainable advantages.

Keywords

Citation

Lemmink, J. and Kasper, H. (1994), "Competitive Reactions to Product Quality Improvements in Industrial Markets", European Journal of Marketing, Vol. 28 No. 12, pp. 50-68. https://doi.org/10.1108/03090569410074255

Publisher

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MCB UP Ltd

Copyright © 1994, MCB UP Limited

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