Imitation brands attempt to free-ride on positive brand-associations build by the leader brand,
a so-called copycat strategy. Copycat practices become close to a natural response, if a firm
faces high uncertainty in the environment it operates in (Lieberman & Asaba, 2006). Funding
innovation is a risky investment for firms who are unable to process the information in this
environment and may result in a costly gamble. As these firms lack the processing ability, they
will instead observe successful firms, who the copycats assume are better able in processing
the information (Bikhchandani, Hirshleifer, & Welch, 1998). Likewise, the more successful a
firm was in the past, the more likely they are to be successful in the future. In addition, a new
product that proved itself to be successful often indicates a newly discovered segment in the market ( (Kapferer, 1995). Imitation brands are able to react quickly with few risks or costs, by
introducing an imitation product into the market.