Structure and sophistication of demand

If all firms form the same expectations about the lead markets and the future global dominant design, the lead market can indeed become a self-fulfilling prophecy. 

User competence and former experience are also regarded as the main determinants of innovativeness of users, i.e. the degree to which users adopt an innovation earlier than other potential users, see Hirschman (1980) and Link (1997). 

In pricing theory it is commonly assumed that the willingness to seek information on the quality of a product compared to alternatives increases with the share of income the product cost, see Nagle, Holden (1995, p. 103). 

One example is given by Kotabe, Helsen (1998, pp. 228-9). Procter and Gamble developed a substitute for phosphate to match the German customer demand concerned with the pollution of rivers and they developed a surfactant to remove grease effectively in tepid water that the Japanese use to wash their clothes. Despite the local responsiveness origin of these innovations, Procter and Gamble was able to market these innovations worldwide. 

The price-lowering effect of user competence is an argument that shows that Levitt s (1983) low-price argument, incorporated in the price advantage as a lead market factor, is not basically opposed to the sophistication of demand argument. Levitt s low-price argument, however, seems more applicable to products 

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