Optimal product line strategies for entry in new markets

Helping firms determine optimal product line strategies for serving multiple consumer market segments is the prime focus of this dissertation research. We focus our attention to the analysis of two important demand side factors that impact the decision of whether and when to enter a new market segment. The first factor we investigate is the impact of the forces of social influence acting between consumer segments in a monopolistic market. We study how positive leverage and negative backlash acting between consumer segments impacts the firm's decision of whether and when should it enter the new market segment. We show that the timing of a firm's entry into the new market is a careful trade-off between the gains from earlier payoffs against the losses from lost leverage and earlier backlash. The second factor that we investigate is the role of consumers' brand versus attribute preference in determining market entry and firm profitability in a duopoly market. We show that whether a firm should stick to its own market or enter the competitor's market critically depends on the relative market sizes and the levels of brand and attribute preferences of consumers within the two markets.