Defending Mail Markets against New Entrants: An Application of the Defender Model

Christian Jaag, Helmut Dietl, Urs Trinkner and Oliver F?rst

No 27, Working Papers from Swiss Economics

Abstract: In this paper we analyzed the strategic competition between incumbent postal operators and market entrants in liberalized letter markets based on the ?defender consumer model? pioneered by Hauser and Shugan (1983) and derived qualitative normative implications on how an established firm should defend its profits when facing an attack by a new competitive product. Our results extend the literature on competition in liberalized mail markets by combining pricing and positioning strategies from a marketing perspective. Our analysis highlights that incumbent postal operators can defend their market shares by differentiating their services along one or more quality dimensions. Postal services are not necessarily homogenous. If postal operators focus solely on pricing strategies they will run into the more serious problems than if they compete on quality too.

Keywords: Defender model; mail market; competition; postal sector (search for similar items in EconPapers)
JEL-codes: L50 L87 (search for similar items in EconPapers)
Date: 2011-07
New Economics Papers: this item is included in nep-com and nep-hme
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Chapter: Defending Mail Markets Against New Entrants: An Application of the Defender Model (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:chc:wpaper:0027

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