y strategies and can involve both price and nonprice tactics (Zeithaml & Zeithaml, 1984). Nonprice predation involves a competitor's attempt to increase a rival's costs through such tactics as the acquisition and "sleeping on" of patents, predatory product announcements, useless product modifications, exclusionary market channel arrangements, disparaging advertising, and sham litigation (Gundlach, 1990).
Predatory innovation may take many forms. For example, a firm may attempt to make product changes to imitate or counter a competitor's products, and thus create a fighting brand (Petty, 1988). Perhaps the most famous fighting brand was Battle Axe plug tobacco used by the American Tobacco Company to force other plug companies to form a trust combination (Burns, 1982). The Battle Axe brand was heavily advertised, sold below cost, and sometimes given away in an attempt to coerce rival producers to form the trust, which later controlled 85 percent of the tobacco plug market.
A more recent example of predatory innovation was Listerine manufacturer Warner Lambert's introduction of a mouthwash product in response to Proctor & Gamble's test market of Extend, an amber-colored mouthwash. The new brand was Depend, an amber-colored mouthwash with advertising copy similar in content to Extend, and introduced in the same test market. Predictably, after Extend was pulled from its test market by Proctor & Gamble, Depend was also withdrawn by Warner Lambert.
Predator firms may also engage in tactics to restrict competitive access to market channel sources. In extreme cases, some dominant firms may attempt to extract exclusionary covenants from suppliers or buyers which restrict the firm from selling or buying from the predator's rivals. This form of predation was present in the classic case United States v. Aluminum Company of America (1941). Alcoa reportedly purchased exclusionary covenants from power companies from which Alcoa di...