When a new brand is launched, consumers are initially both uncertain of and not inertial to the new brand. Though these barriers may disappear on their own over time, a savvy brand manager who knows the relative importance of both can use relevant marketing levers to increase profits in the long...

We analyze the strategic behavior of firms when demand is determined by a rule of thumb behavior of consumers. We assume consumer dynamics where individual consumers follow simple behavioral decision rules governed by imitation and habit as suggested in consumer research. On this basis, we...