Competitive Reactions to Personal Selling: The Difference between Strategic and Tactical Actions

A recurring question facing managers is how (if at all) to react to competitive actions. In this research the authors distinguish between reactions to competing strategic and competing tactical actions, different from prior homogeneous definitions of competitive actions. Using a
unique, single-source dataset of personal selling interactions between firms and customers covering fourteen drug categories, the authors shows that substantial differences in reactions exist. In particular, strategic actions elicit competitive responses with stronger short- and long-term consequences compared to tactical actions. Furthermore, while the decision to react
to competing strategic actions is always warranted, this is not the case for a substantial amount of tactical actions, where firms retaliate with an ineffective marketing instrument, or accommodate with an effective marketing instrument. This divide between actions is further exacerbated in the strength of the reactions that we observe: stronger or weaker reactions to
strategic actions occur in line with theoretical expectations, whereas reactions to tactical actions often are not. Based on these findings, the authors suggest directions to improve decision maker’s reactions to competing tactical actions