First Movers
| Wed Apr. 22, 2009 9:46 AM PDT
Some recent research apparently shows that the first brand of some particular good to hit the shelves in some particular area (Miller beer in Chicago, Heinz ketchup in Pittsburgh, etc.) manages to retain outsize market share for a very long time. 
This prompts Matt Yglesias to look at maps showing the density of Starbucks stores and Walmarts:
You see some of the stereotype “latte liberal” stuff going on here, but it’s also clear that pure proximity to Seattle or to Bentonville is a big factor. And in the CPG market, these kind of impacts seem to last a long time. And somehow Tim Horton’s can be very popular in Canada but not make it big in the states. Why doesn’t In-and-Out Burger spread to the east coast?
I don't know about Starbucks, but a big part of the reason the Walmart map looks this way is simply that Walmart management chose to expand first and most densely close to its home territory. In the case of In-N-Out, my understanding is that the family that owns them has declined to sell franchises, which limits their geographical reach based on how fast they can finance growth through internal cash flow.
So there's more going on than just first mover advantage. Though there's certainly plenty of that too, especially for food items, I think, where people get accustomed to a particular taste and stick with it for a long time. Taste in candy, for example, is famously set in childhood, which is why Americans scarf down megatons of Hershey's chocolate every year, while the rest of the world considers it barely fit for pig swill. Lots of interesting stuff going on here.
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Comments
Nothing new here...
Submitted by Anonymous (not verified) on Wed Apr. 22, 2009 11:14 AM PDT.
There's nothing new about this research. Jack Trout and his business partners, most notably Al Ries, have written several books over the last 20+ years -- actually pretty much the same book over and over -- with the sub-theme of "first brand in" being able to attain and then maintain a dominant position. (Surely there were others as well touting this.) Trout even often postulates that if you need to make a guess who was the first big player into a market, pick the most dominant current player. http://www.troutandpartners.com/
btw, I posted this anonymously because MotherJones kept hanging up when I tried to create an account.... and it didn't recognize my email address, though I'm pretty sure I had already created an account.
I love Tim Horton's. And not
Submitted by karog on Wed Apr. 22, 2009 12:35 PM PDT.
I love Tim Horton's. And not even for the doughnuts. Terrific value. I have eaten there many times traveling around all over eastern Canada. Wish they would come to the states.
In and Out specifically uses 'local' and 'fresh' ingredients, so anyone wishing to build one has to prove to the owners that the suppliers can follow the requirements. Made me think up if I could get them a local supply contract or fresh recipe for a veggie patty using their ingredients, which would help them in a couple of their disputes down in LA. It's actually quite fascinating.
WalMart also specifically chose to target rural areas first before hitting urban centers because the competition isn't as stiff; which is where their reputation for killing towns comes from. But that means that they will have more trouble entering into states further from their original.
In N Out should be everywhere!
Submitted by madprofessah on Wed Apr. 22, 2009 5:05 PM PDT.
I have often wondered why SoCal institutions like in-n-out and Trader Joe's have not expanded throughout the USA and dominated their respective market spaces tin other states.
I blog at MadProfessah.com
Trader Joe's has stores all
Submitted by Anonymous (not verified) on Wed Apr. 22, 2009 5:41 PM PDT.
Trader Joe's has stores all over the U.S. now, and has for years. They don't go for saturation in a market as in SoCal, but they're pretty well represented in lots of geographic areas. www.traderjoes.com
In N Out Urge
Submitted by parentalcation (not verified) on Wed Apr. 22, 2009 5:19 PM PDT.
In-N-Out is the reason I visit my mom in California at least once a year... otherwise screw the traffic.
My South Carolinian wife was skeptical about the awesomeness of In-N-Out. She is now a die hard convert.
Best burgers evahhhh.
Going back to well.
Submitted by Idi Amin's Last Meal (not verified) on Wed Apr. 22, 2009 5:44 PM PDT.
One of my favourite Kevin Drum posts, from the Washington Monthly/Political Animal days, regarded a map that at first blush one would assume to be a red state/blue state division. Instead, it demonstrated the majority opinion on how to describe carbonated beverages. (God's will be done, I am from a place that favours soda.) Loved that post, & love this.
In-n-Out
Submitted by BerkeleyMom (not verified) on Wed Apr. 22, 2009 5:51 PM PDT.
We love In-N-Out even thought the closest one is 35 minutes away. My kids also noticed a help wanted sign that offers workers $10/hour to start and we hear that managers make $100,000 per year. It seems that this is a nice, well-run company.
You can order stuff off the menu too (this is part of the fun)--my kids recommend the fries animal style and the triple triple burger, I like the double fried fries.
In 'n' Out
Submitted by craigie on Wed Apr. 22, 2009 8:36 PM PDT.
In 'n' Out is good - I ate there today - but Carney's is better.
determining what tastes right.
Submitted by Anonymous (not verified) on Wed Apr. 22, 2009 9:26 PM PDT.
(I also posted this over at .marginalrevolution)
I think first brands can be involved in setting a region's notion of what tastes right.
For non-brands, look at regional pizza styles.
Someone who moves from one region to another is often dismayed that the locals don't know how to make pizza.
I (from New Haven) was flabbergasted when I ordered a pizza in Los Angeles. The first quest they asked was whether I wanted a whole wheat or white crust. WTF? Whole wheat "pizza" is not pizza.
Agreed on the New Haven vs.
Submitted by Benjamin Bartlett (not verified) on Wed Apr. 22, 2009 10:26 PM PDT.
Agreed on the New Haven vs. Los Angeles pizza thing. L.A. does many things well, but pizza is not one of them.
As for Tim Horton's in America, it's owned by Wendy's, which means that at least in Ohio you can find them. Frankly, I think Tim Horton's is overrated (it's no worse than Dunkin' Donuts, but it's not exactly better, either), but Canadians have a strange patriotic feeling toward Tim Horton's that I have never truly understood.
As a current Kentucky resident, but born in New Haven, I couldn't help but smile at the endorsement of New Haven pizza. We would stand in line for an hour just to get a table at Pepe's.
Also, this first brand thing has something going for it. I love chocolate and have tried many brands, from cheap to expensive. I love a Hershey every now and then, even Palmer's, usually found in the form of an Eaaster Bunny. I wait for the day when someone will do a real blind taste test with the really good stuff v. the cheap stuff. I know I can tell the difference, but that doesn't mean I'll like the expensive stuff better.
Blind Taste Test
Submitted by Roger Keeling (not verified) on Thu Apr. 23, 2009 11:38 AM PDT.
Frank F., there HAVE been some blind taste tests done on chocolates. Consumer Reports had such a couple of years ago, and their tasters rather liked Hersey's. They rated it fairly high, above some of the so-called premium brands. I have always liked it, particularly Hersey's Special Dark. (And when I was in England about 20 years ago, I found plenty of Hersey's to feed my addiction. Seemed like it sold plenty well there). But maybe Hersey's wouldn't fare as well in such a test today: the competition might be better, or Hersey's might have cheapened the product. I know that Hersey's was at one point advocating an FDA rule change that would permit them to use corn syrup instead of sugar in chocolate, a bad idea on many levels.
Best commercial chocolate I ever had was a mint chocolate sold by Marshall Fields under its own name back in the early 1980s. We had about 6 clients in the Chicago area, and every one of them sent us a pound or two for Christmas in around 1982. The stuff was amazing. Never saw it again.
Thanks for the information,
Submitted by Frank F on Thu Apr. 23, 2009 12:09 PM PDT.
Thanks for the information, Roger. Every test Ive seen has pitted the fancy brands against other fancy brands, like Hersheys didn't even belong in the fold.
I remember a story about some companies, and Hersheys may be one, that wanted to change the formula so that they would have to say "chocolate taste" on the wrappers, instead of chocolate. This was going to apply to things like a Snickers, but not regular chocolate bars. Read those labels carefully.
Tim Hortons is no longer
Submitted by southern Canada (not verified) on Thu Apr. 23, 2009 10:46 AM PDT.
Tim Hortons is no longer owned by Wendy's. Timbits and tea biscuits are still tasty but the regular donuts and coffee have gone down hill a bit.
http://upload.wikimedia.org/wikipedia/en/1/16/Tim_stores_wiki.png
A Maryland-D.C. favorite, Ledo Pizza...
Submitted by Vincent (not verified) on Thu Apr. 23, 2009 4:10 PM PDT.
...which makes an excellent, flavorful pizza, has expanded beyond its mid-Atlantic core to Pennsylvania, Virginia, West Virginia, the Carolinas and Florida. I'd love to give Los Angeles a few locations in return for In-N-Out in metro Washington.
Then again, I can recall when I lived in Philadelphia, and Cincinnati's Gold Star Chili opened a parlor on South Street. It lasted a year at most -- which would probably be the same shelf life if Pat's, Geno's or Jim's opened a cheesesteak place in Cincy.
IN N OUT
Submitted by Tom (not verified) on Fri Apr. 24, 2009 8:47 AM PDT.
God I'm craving a double double right now. Too bad the nearest one is about 2000 miles away.
"Americans scarf down
Submitted by A Pig (not verified) on Sun Apr. 26, 2009 5:56 AM PDT.
"Americans scarf down megatons of Hershey's chocolate every year, while the rest of the world considers it barely fit for pig swill."
I'm not touching that Hershey's stuff. I'll eat my own feces first.
To a guy with a hammer,
Submitted by tiffany jewelry (not verified) on Sat Aug. 15, 2009 11:42 PM PDT.
To a guy with a hammer, every problem looks like a nail. To a military obsessed with counterinsurgency, every third-world disorder looks like . . . .
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