Amazon Knows How to Play the Late-to-Market Game

When it comes to establishing a company in a new market, some marketers believe it is often better being the first company in rather than a follower. The argument for this includes the potential advantages of establishing relationships with buyers, suppliers, the news media and others before competitors enter. Yet being first to market does not guarantee these advantages will happen, thus opening the door for others. For instance, some of the things that can open up the market for competitors include early entrants launching poorly performing products or early entrants who cannot get their message out due to ineffective promotion.

The advantage of being an early entrant especially does not exist when it comes to technology products. The reason is technology can change so rapidly that a similar, though more innovative product can be introduced and quickly steal away customer interest. A good example is the evolving market for television connected devices. These devices range from set top boxes offered by major cable providers, such as Comcast and Verizon, to much smaller devices, such as Apple TV and Google Chromecast. With these major players, one might think this market is too crowded for any new entrant. Internet giant Amazon does not think so. As discussed in this story, the world’s premier online retailer has entered the market with its own Internet connected device that will stream movies and even some TV programming, such as ESPN.

Amazon has a track record for entering tech markets late and then succeeding. The most notable is the eBook reader market, which Amazon entered in 2007 with the launch of its Kindle book reader. By the time Amazon entered several devices were already on the market, including a highly promoted reader offered by Sony. Amazon was also a late market entrant in the online streaming music business, following Apple’s iTunes by almost four years. In both cases, Amazon quickly became a market leader.

As mentioned, the streaming video market is quite crowded, so things may not go as smoothly as they did with eBooks readers and online music. But given Amazon’s marketing power, including a staggeringly large customer database and its strategy of initially pricing products at highly competitive levels, one expects they will become a key player in relatively short period.