The Role of Informative Names in Niche Dynamics and Product Survival in a High-Velocity Industry

How do customers discover new products? Recent research has found that a firmcan facilitate the discovery and subsequent purchase of its product by giving it an advantageousname. However, no product exists in isolation, rather it competes for customer attention withother products both within and across product niches. We theorize that a product may benefitfrom the names of competitors" products within its niche because certain product names cantrigger a positive spillover effect. Specifically, product viability should increase with the prolif-eration of products with informative names in a focal niche because informative names attractattention to the niche, and consequently benefit all its products, regardless of whether they haveinformative names or not. This beneficial influence should be especially strong when a nicheis new. Additionally, a product"s market fate may depend not only on the prevalent namingpractices in its niche, but also on naming practices in competing niches. We find support for ourtheorizing in event-history analyses of all CD-drive products shipped in the worldwide opticaldisk drive industry, 1983–1999. Ultimately, our findings suggest that in high-velocity markets, tofacilitate product discovery by customers, firms should enter niches populated by products withinformative names.

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