Why buy second‐best? The behavioral dynamics of market leadership

Purpose – In most markets it is possible to identify a brand leader and a number of brand followers. The purpose of this paper is to address the following question: “Why should any consumer purchase a ‘second‐best’ option?” Design/methodology/approach – Consideration of the way in which these two groups of consumers (brand leaders and followers) trade off product attributes (utilitarian benefits, hedonistic benefits and price fairness) during the choice process is made in the study by path analysis of the appropriate structural equation models and then a consideration of the level and the differences between the means of the three variables. Findings – The paper finds that utilitarian attributes are of paramount importance to satisfaction with the brand. This is not in accordance with conventional wisdom, which leads us to believe that price is most important to buyers of second‐tier brands and hedonic considerations most important to buyers of leading brands. Research limitations/implications – The model fit attained is only good enough for exploratory work (GFI =0.88/0.90) so replication with a larger sample would be appropriate. In addition, the research is carried out in South Korea – although we know of no reason why this should affect the results it would be of interest to generalize the results to a western economy. Nevertheless, the method of first fitting the model then trading off the attribute levels is unusual and quite interesting. Practical implications – Marketers of leading brands should not concern themselves about price but merely stress the benefits, whereas marketers of follower brands should make much of the price differential. Originality/value – The importance of utilitarian benefits have hitherto not often been stressed when marketing premium brands – this research suggests that this is wrong.