Katrina: First to Market

I don't mean for this to sound like an "I told you so," but I suspect my intention isn't going to make the difference.

As I was watching the news (in subtitles) from my eliptical machine at the gym this morning, I was struck by a funny thought: Katrina has the first mover advantage. Rita isn't going to get the same attention or helpful response simply because of the timing. It seems that Rita has caused her fair share of damage yet people are still focused on Katrina. As a current marketing student, I couldn't help but compare this situation to free market competition between two businesses. The first to market with a new product often is the one who gains the largest market share. They simply beat the competition to the punch and therefore are able to seize the bulk of existing demand. When the second mover enters often consumers are already loyal to the intial company/product and do not wish to switch.

Now imagine that consumers (in this case, those who responded to Katrina and tried to help) have invested resources into the first product when the second mover enters. Not only do they hesitate to switch because of loyalty, they also do not have the resources remaining to invest in another product that is minimally different from the one they already possess. As discussed in an earlier entry, those who have donated to Katrina victims now have less with which to help the victims of Rita.

Does mother nature understand economics?