The basics of marketing strategy 69
understanding market structures by marrying
two different data types – switching probabili-
ties and attribute ratings. Despite the fact that
the models developed appear to perform well
against the appropriate statistical test, there
remain basic issues which link to the issue of
the time dynamic evolution of the market or
demand space. When the model is applied to
the well-established dataset on car purchase
switching behaviour (Harshman et al., 1982), it
is clear that it provides an interesting and
informative analysis of the ways in which
various customer ‘segments’ have evolved over
time both in terms of their size and attribute
preferences. However, given the nature of the
data and the form of analysis, the dynamic
process whereby customer desires change in
response to both new competitive offerings and
other endogenous and exogenous factors can
only be seen in terms of changes in attributes
and specific switching decisions. We must now
consider, however, particularly in the context of
understanding the time-based nature of market
strategies, how we might incorporate in more
detail a longer-term time dimension with a
stronger customer focus.
Differentiation in time: beyond the
product life cycle – characterizing
the nature of competitive market
evolution
Few management concepts have been so widely
accepted or thoroughly criticized as the product
life cycle.
(Lambkin and Day, 1989, p. 4)The product life cycle has the advantage that it
represents the most simple form of path devel-
opment for any product (introduction, growth,
maturity, decline) but, as has been widely
recognized, this remains a highly stylized rep-
resentation of the product sales pattern for
most products during their lifetime. Whilst it is
reasonably clear that it is difficult if not
impossible to propose a better single generic
time pattern, any such pattern is subject to
considerable distortion as a result of inter-
actions with changes in technology, as well as
both customer and competitor behaviour.
Lambkin and Day (1989) suggested that an
understanding of the process of product-mar-
ket evolution required a more explicit distinc-
tion between issues of the demand system, the
supply system and the resource environment.
However, they chose to emphasize the nature
of the demand evolution primarily in terms of
diffusion processes. This approach tends to
underestimate the extent to which demand side
evolution is as much about the way(s) in which
the structure of the demand space is changing
as the more aggregate issue of the total demand
itself. Lambkin and Day (1989) themselves treat
these two issues at different levels of analysis,
with ‘segmentation’ as an issue in market
evolution which is defined as the resource
environment within which the process of the
product life cycle takes place.
Beyond this, more recent research, on the
process of market evolution, partly building on
some of the ideas developed by Lambkin and
Day (1989), has attempted to incorporate some
insights from, amongst other areas, evolu-
tionary ecology. In particular, work on the
extensive disk-drive database, which gives
quarterly data on all disk-drive manufacturers,
has allowed Christensen (1997) and Freeman
(1997) to look at the ways in which, at the early
stages in the market development, the existence
of competitive offerings seems to encourage
market growth, whereas at later stages the
likelihood of firm exit increases with firm
density. Other computer-related industries
have also provided the opportunity for empiri-
cal work on some of the issues relating to both
the impact of standardization, modularization
and the nature of generation effects (Sanchez,
1995), although in the latter case it must be
admitted that the effects themselves can some-
times be seen as a result of marketing actions in
their own right.
Much of the market shift towards standard-
ization as it evolves can be seen as analogous