Lees, Gavin and Buchanan, Rich (2005) The Share Order Effect of a New Radio Station Entering the Marketplace. Marketing Bulletin, 16 (Research Note 6). pp. 1-8. ISSN 1176-645X

Abstract

This study adds to the growing body of work concerning empirical generalisations and the behaviour of brands by extending research previously concerned mostly with products into a new area, radio broadcasting. The results are important not only to broadcasters planning to launch new stations, but also by confirming previous studies in the area of cannibalization and share order effect, are useful to any manager considering the introduction of a new brand into their marketplace. In this research the impact of a new radio station on an existing marketplace was examined to see if radio market share behaviour imitates product behaviour in terms of share order effect. A simple share order effect model based on Luce’s (1959) Axiom of the Independence of Irrelevant Alternatives (IIA) was tested on five different new station launches. As predicted, new stations took their listeners from existing competitor stations in proportion to the existing station’s market share, although there were some deviations from the model’s predictions.

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