Mechanisms of Consumer Responses to Underdog Companies: A Global Marketing Perspective

Abstract

The phenomenon in which consumers support less established companies regardless of their lack of resources and opportunities has created the concept of the underdog effect. Relatively small companies, both domestic and international, often employ marketing strategies that rely on the underdog effect to gain market share in competition with dominant firms. To better understand the effectiveness of underdog positioning, a review of this literature is necessary, given that prior research has identified inconclusive and inconsistent effects of underdog positioning on consumer preferences and purchase intentions. This paper presents a systematic review of the literature on the underlying mechanisms of the underdog effect. The analysis of the selected articles published over the past 16 years in prominent journals of business and consumer behaviors such as Journal of Consumer Research, Journal of Brand Management, Journal of Business Research, Journal of Consumer Psychology, Journal of Consumer Behaviour, Journal of Marketing, Psychology & Marketing has provided psychological processes as the relevant mediators of the relationship between the underdog effect and consumer responses. The current paper makes an important contribution to the brand performance literatures by addressing the research gap in the area of underdog positioning strategy. Further, to benefit managers who practice underdog positioning, this study discusses future research directions based on global consumption trends.