Re-Shaping Demand Landscapes: How Firms Change Customer Preferences to Better Fit Their Products
Strategic Management Journal (Forthcoming)
45 Pages Posted: 22 Aug 2019
Date Written: June 21, 2019
Abstract
What strategies do firms use to change their customers’ preferences? This paper addresses this question by developing a conceptual model that combines the representation of customer preferences as a demand landscape with research on marketing and psychology. I suggest that in addition to repositioning their products to accommodate customer preferences, firms also change the distribution of customer preferences to accommodate the firms’ products. Specifically, I argue that firms alter customer preferences by adding, removing, and transforming the dimensions of the demand landscape. I illustrate the model with an historical case study of the U.S. market for mortgage-backed securities (MBS) between 1968 and 1987, a period during which MBS issuers succeeded in reshaping the bond demand landscape to promote the acceptance of MBS as bonds.
Keywords: customer preferences, demand landscapes, demand-based view, historical case study, mortgage-backed securities
JEL Classification: D02, D22, G21, G23, N2
Suggested Citation: Suggested Citation