The impact of a market spoiler on consumer preference structures (or, what happens when Wal-Mart comes to town)

• Published in: Journal of retailing and consumer services Vol. 5; no. 1; pp. 1 - 13
• Main Authors: Arnold, Stephen J., Handelman, Jay, Tigert, Douglas J.
• Format: Journal Article
• Language: English
• Published: Oxford Elsevier Ltd 1998; Oxford, UK :Butterworth-Heinemann, 1994
• ISSN: 0969-6989; 1873-1384
• DOI: 10.1016/S0969-6989(97)00011-8

Traditional market structure theories assume that consumer preferences are fixed and exogenous to the influence of market competitors. An alternative theory from the pioneering advantage literature suggests that a competitor can actually alter preference structures by shifting attribute saliencies in its own favour. The ‘market spoiler’ achieves this result by capitalizing on consumer preference ambiguity. Support for this alternative theory is found in a series of surveys tracking Wal-Mart's entry into three North American markets. The results show that the importance attached to different retail store choice attributes change to become more consistent with Wal-Mart's particular strengths.