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Copyright © 2012 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 1
LSM525: Introducing New Products: Successes and Failures
Copyright © 2012 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 2
This course includes
Two discussions
One tool to download and use on the
job
One scored project in multiple parts
One video transcript file
Completing all of the coursework should take
about five to seven hours.
What you'll learn
Recognize the importance of new
product development to marketing
strategy
Use the concept of the innovation
continuum to develop an effective
marketing program for new product
success
Leverage an understanding of social
systems to improve new product
diffusion
Recommend strategies for crossing
the diffusion chasm to increase
market success
Course Description
You begin this course by considering the importance of new products and services to the overall health of a firm, and you
look at some of the risks these products entail. Why do so many otherwise good products fail to achieve broad market
Copyright © 2012 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 3
diffusion? You analyze the significance of product characteristics such as complexity and communicability on customers'
decisions to adopt new products. Then you consider innovations in terms of a continuum.
In the second part of the course, you look at new products through the lens of the product diffusion process. This process
shows how different customer segments enter the market at different times and why. Finally, you learn how the diffusion
process is related to the overall product life cycle.
Douglas Stayman Associate Professor of Marketing, Samuel Curtis Johnson Graduate School ofManagement, Cornell University
teaching and research interests are in the areas of advertising andProfessor Stayman's
consumer decision making. He came to Johnson from the University of Texas at Austin.
His research has focused on the study of emotional responses to advertising and the role
of affect in decision making. His work has involved methodological and measurement
issues in studying emotions. He is also interested in theoretical accounts of the effects of
emotions on people's preferences. His research has been supported by grants from the
Ogilvy Center for Research and Development, the Marketing Science Institute, and the
American Academy of Advertising.
Start Your Course
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Module Introduction: New Product Adoption
New products are essential to a firm's health and growth. It is also true that a great many new products fail. Knowing some
of the factors in the customer's decision to adopt a new product can help marketers make intelligent decisions and reduce
the risk of failure.
In this course module, you look at the importance of ; that is, why some good products succeed andrelative advantage
other equally good products fail. Then you examine specific characteristics of new products that are important to the
adoption process. Finally, you find out how the describes the challenges posed to marketers byinnovation continuum
innovative products.
After completing this module, you will be able to:
Describe the customer-focused approach to new product adoption
Provide reasons why new product development is relevant to the success of a firm
Explain why relative advantage does not guarantee the success of a new product
State some reasons why many new products fail
Define relative advantage, complexity, and compatibility and explain how each affects a product's adoption
Define trialability, communicability, and risk and explain the role each has in the product adoption process
Provide strategies for overcoming those marketing obstacles related to product characteristics
Define continuous, dynamically continuous, and discontinuous innovations and explain why these distintions are
useful to marketers
Provide an example of a marketing strategy that meets the challenge posed by a discontinuous innovation
Apply the concept of the innovation continuum to a marketing strategy
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Watch: A Customer-focused Approach to New Product Adoption
Introducing new products into the marketplace presents challenges on several fronts. One of the biggest challenges is
overcoming consumer wariness around adopting innovative ideas.
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Read: The Value of New Products
The development of new products is critical to the growth of a firm, but new products pose risks for the firm, too. Marketers
can anticipate these risks by looking at new product adoption through the lens of the customer's decision. Why do
In this section, customers adopt some products and not others? you consider the reasons why relative advantage does
not always mean success.
Almost all firms spend significant resources on developing and marketing new products. They continually risk time and
money on new products that have uncertain futures when instead they could on their tried and true products. Why?
Because, typically, 25% of all firm revenues come from products that are less than three years old. Furthermore, new
products account for more than 33% of all growth. It is apparent that any firm that does not invest in new products will
suffer, in terms of both profit and growth.
However, new product development entails uncertainty, and even experienced marketers cannot completely and
accurately predict the fate of these products. Failure rates of new products and brands are generally quite high.
Average failure rates of new products:
33% in consumer goods
25% in industrial products
27% line extensions (e.g., Kodak Funtime, Reese's Pieces)
31% of new brands for old markets
46% of new brands for new markets
To succeed in marketing new products, you must understand the reasons why customers do or do not adopt new
products. You can design a market strategy that takes these reasons into account and possibly lower the failure rate of
your firm's products. As you go through this course, think about your own firm and the customer decisions that affect the
success and failure of your products.
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Watch: Was Emerson Right?
A product's relative advantage does not guarantee its success. Success in the market depends on your understanding of
the needs of the market, the way you position the brand in the market and all of the ancillary marketing and sales activities
that support the brand.
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Read: Why New Products Fail
It is obvious why some new products fail: they aren't good products. Some new products don't actually work, or they don't
provide the customer with an experience that is obviously and measurably better than the products that are already in the
market. But many new products are good products. Many do provide a definite relative advantage over existing products,
and they still fail. It may be difficult to say exactly why they fail, but often one or more marketing issues are involved.
WatermelonCola is an exciting new fictional product that has performed extremely well in focus groups and taste tests
around the country. It has a large marketing budget and the enthusiasm of the company behind it. But it could still fail.
Click on the icons to learn why.
Relative advantage alone will not generate adoption. A marketing strategy cannot rely solely on the inherent superiority of
the product. Coming to a deep understanding of your product, and especially how customers use your product, will help
you develop the right marketing strategy.
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Watch: Six Characteristics of Consumer Adoption
Some firms believe that if they have a great product, that product will more or less sell itself. Unfortunately, this is almost
never true. Even products with obvious merits and advantages sometimes fail to sell. By analyzing product characterstics
such as complexity, compatibility, trialability, communicability, and risk, you can come to a greater understanding of the
individual buying decision.
A video presentation appears below. Use this resource to find out which product characteristics affect a customer's buying
decision.
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Read: Marketing Microwaves
, one product quality that is important to the buying decision, refers to the extent to which a typical consumerComplexity
might find the product difficult to understand or operate. When customers perceive a particular product as complex, they
are less likely to buy it.
The microwave oven is a good example of a complex product that was not widely adopted at first. When the microwave
oven was introduced, many customers did not understand how it worked. They understood standard ovens, which work in
an obvious way: a heating element at the top or bottom heats the air inside the oven, and the hot air cooks the food.
Standard ovens actually become hot when they are operating.
Microwave ovens, on the other hand, use microwave radiation to excite polarized molecules within the food. This process
heats and cooks the food. The microwave oven itself and the air inside it do not become hot. This was difficult for most
consumers to understand.
Microwave ovens have a real and obvious relative advantage: they cook food faster. But this advantage, although it was
clear and easy to understand, was initially not enough to overcome the product's complexity. Many consumers were not
only puzzled by it but also afraid of a cooking process that came to be known as "nuking." They were reluctant to bring
into their homes these machines that they thought were nuclear reactors.
If marketers had been aware of this issue at the time of the the product's launch, they could have marketed it in a way that
took complexity into account right away. They could have prevented a long period of stagnant sales. But instead,
marketers focused on what they thought were the product's advantages. As a result, consumers' confusion about how
these ovens worked and their fears about radiation prevented the product's widespread adoption for several years.
What are some ways to market a technologically complex product? Education is the key, and education means effective
communication about the product. In the case of microwaves, moving away from television ads, which are necessarily
brief and lack depth, and toward text- and graph-heavy print ads helped marketers educate consumers about the safety of
microwaves.
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Read: A New Way to Look at Products
The table below summarizes the product characteristics that have the most impact on customers' buying decisions.
Characteristics Definition Examples
Relative
advantage
The degree to which
potential consumers
perceive a new product
as superior to existing
products/substitutes
Air travel has a over train travel, in that airrelative advantage
travel is faster.
Compatibility
The degree to which the
innovation fits the values
and experiences of
potential consumers
A portable snack that includes its own spoon is highly
with consumers' desire to eat on the go and withcompatible
their experience eating other foods packaged for portability.
Soup mix in a plastic container is not compatible with eating
on the go.
Complexity
The degree to which a
new product is difficult to
understand or use
A GPS system is a much more product than acomplex
fold-out map.
Trialability
The degree to which a
new product can be tried
on a limited basis
Software you can download and use for free for 30 days has
high , unlike a major appliance, such as an Energytrialability
Star-rated refrigerator.
Communicability
The degree to which the
results of using the
innovation can be
observed or described to
others
The value of certain investment products such as credit
default swaps have low compared to gold orcommunicability
real estate.
Risk
The potential
consequences when the
innovation does not meet
expectations
For a large firm, adopting a new data management system
entails more than buying new office chairs.risk
When products don't succeed, one of these characteristics is often responsible. Marketers who are aware of how these
qualities affect a customer's buying decision can develop strategies that work with them.
Source: Everett Rogers, (New York, NY: Free Press, 2003, 5th ed.).Diffusion of Innovations
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Read: Sugar Beets in Maine
Case Study Maine Sugar Company
Sometimes a good product or business idea fails to live up to its promise because of perceived . An example of arisk
business idea that failed because of perceived risk is the Maine Sugar Company.
The Maine Sugar Company was founded on the belief that growing and producing sugar in the United States could be
profitable. The colder climate in the northeastern United States is perfect for growing sugar beets, a source of sugar. In
addition, very high import duties create a favorable economic climate for producing rather than importing sugar. Investors
saw that there was a great potential for profit in growing sugar beets and producing sugar.
The Maine Sugar Company knew that sugar beets grow under conditions similar to those that are ideal for potatoes. The
company approached potato farmers and proposed that the farmers grow sugar beets in between their rows of potatoes.
Then they would buy and process the beets into sugar, and the farmers would share in the profit. Investors liked this plan
and invested heavily.
However, even though the idea was sound, investors ended up losing a lot of money. What the company and its investors
did not anticipate was that the Maine potato farmers saw growing sugar beets as a risky venture. They weren't sure how
well the beets would grow and whether their investment in time, equipment, and other resources would be sufficiently
profitable. They wondered if the beets would have a negative effect on their potatoes. The farmers wanted to start small
and plant just a little of their acreage in beets at first. If that worked well, they'd plant a little more.
This process took time, and soon the Maine Sugar Company was bankrupt and out of business. They couldn't convince
the potato farmers to plant enough beets quickly enough to generate the revenue needed to keep the business alive. They
had built up a sales engine, a production engine, and a cost engine that did not match the way the farmers thought about
the product.
Companies often go out of business because of cash flow, not just because their new product is not good. Firms need to
think about how the market will accept their product, and what the adoption process will be like. They need to consider the
cash-flow implications of various relevant issues, such as the perception of risk.
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Watch: How Marketers Change Behavior
Understanding how consumers respond to change and complexity is an important part of the marketer's job. Most people
have a natural reluctance to embrace change. How can you work with that and help consumers see new or improved
products in a positive way?
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Read: Levels of Innovation
Why do consumers adopt some new products more readily than others? The concept of the innovation continuum offers
some explanations. Using this framework, you can place all products along a continuum that describes how much change
they demand from the consumer. The innovation continuum is a useful tool when making marketing decisions.
While customers generally like innovation and often enjoy trying new products, they are likely to have different responses
to different kinds of innovation. Let's look at how customers respond to the three kinds of innovation proposed by Geoffrey
Moore.
. Products classified as continuous innovations are those that do not require customers to changeContinuous innovations
their behavior in order to use them. Customers readily adopt continuous innovations; they are the products that are the
easiest to market. Consider, for example, innovations in automobile technology: a car with a new streamlined design will
get better mileage without customers having to change their driving behavior. Other examples of continuous innovation
include new beverage-mix flavors and computers with faster processing speeds. These innovations build on products with
which customers are familiar. Continuous innovations are sometimes called incremental innovations.
These innovations are similar to continuous innovations, in that they build on a productDynamically continuous innovations.
with which consumers are already familiar. However, dynamically continuous innovations include new technology that
pushes the innovation beyond what's available in existing products. An example is the jet plane. Consumers travel on jets
the same way they travel on propeller aircraft, even though the jet plane is a definite technological advance. Dynamically
continuous innovations are sometimes called .architectural innovations
These innovations are different from other innovations in that they ask the customer to use theDiscontinuous innovations.
new product in a new way. An example is the electric car. Electric car drivers charge their cars at charging stations rather
than fill them up at gas stations. Like other discontinuous innovations, the electric car puts demands on customers by
asking them to make changes in the way they live their lives. Many new technology products are discontinuous
innovations.
Marketers should think about where on the innovation continuum their products lie. Are they continuous or dynamically
continuous innovations that customers are likely to accept easily? If not, marketers should carefully plan their marketing
strategy to anticipate customers' reactions.
Source: Moore, G. A. NewCrossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers.
York: Harper, 1991.
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Watch: Marketing TiVo
TiVo is a good example of a discontinuous innovation. Its early struggles to find a foothold in the market sent the
marketing back to the drawing board to come up with a new strategy.
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Tool: Innovation Assessment Matrix
Key Points
If you're interested in reading "The Ambidextrous Organization," by Michael Tushman and Charles O'Reilly III, published in
the April, 2004, issue of The Harvard Business Review , refer to the Harvard Business Review site for purchase.
In their article, "The Ambidextrous Organization" (April, 2004), Charles A. O'Reilly III andHarvard Business Review
Michael L. Tushman introduce the concept of the innovation continuum. They claim that firms can increase their chances
for success by applying this framework to their managerial structure. "The Ambidextrous Organization" also gives
marketers a thorough and thoughtful analysis of the challenges of innovative products. A synopsis appears below.
Download the Tool
Innovation Assessment Matrix
While many companies succeed when it comes to refining their existing products, they often fail to achieve truly new,
breakthrough products. Some say this may be because established companies are simply too entrenched; others say a
venture capital model would do the job better. O'Reilly and Tushman observed that companies that separate their
organizations into two units, one focusing on improving and refining their current products, and one exploring new
opportunities, seem to thrive. In order to come up with some definitive answers, the authors first established some
definitions of the different types of innovation identified by Geoffrey Moore.
(also called ) are small improvements in current products.Continuous innovations incremental innovations
Companies should make these innovations as a matter of course in order to constantly improve and become
more efficient. Examples include automakers, who make incremental innovations in the form of engine design
and fuel efficiency.
(also called ) use new technology or processes toDynamically continuous innovations architectural innovations
change an element or component of their business. Using the new communication capabilities of the internet to
streamline banking services is one example of such an innovation.
are radical advances that often render old processes or products obsolete. DigitalDiscontinuous innovations
photography, which fundamentally changed the way most photographers take and develop photos, is one
example.
Continuous
innovations
Dynamically continuous
innovations
Discontinuous
innovations
New
customers
Existing
customers
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Each of these innovations can target different customers or markets. Some may be aimed at current customers. Others
may seek out new customers in a current market, and still others can look for entirely new markets. O'Reilly and Tushman
suggest using a grid or matrix like the one to the left to plot out the firm's efforts to innovate.
This matrix defines a six-part framework your firm can use when developing a marketing plan. It prompts you to consider
both old and new customers and to consider three kinds of innovations. Is your firm targeting both old and new customers
with all three kinds of innovations? By using this matrix, you can see where there might be room for improvement.
Tushman and O'Reilly looked at the ways different organizations used the innovation continuum. They found that
companies that dedicated separate, but coordinated, arms to different kinds of innovation did better. The units that focus
on existing products are shielded from the confusion of developing new businesses. The units that focus on new products
can break away from "business as usual" and be truly innovative. A tightly coordinated upper management ensures that
both types of unit share resources, ideas, customers, and experience.
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Module Introduction: New Product Diffusion
You can analyze the success and failure of new products several different ways. One way is through the lens of the
individual buying decision. Another way is via the framework of examined here. According to the productproduct diffusion,
diffusion model, the first customers to buy a product have certain qualities in common, as do those who buy once their
neighbors have bought, and those who buy only at the point at which everyone else has already adopted the product.
In this module, you look at the sociology of product diffusion, pinpointing the qualities of the different customer groups.
You compare early adopters to the even earlier innovators and to later customer groups, too. You find out why some
products succeed in some customer groups but fail to achieve widespread adoption and what marketers can do about
this. Finally, you revisit the product life cycle framework and examine its connection to the new product diffusion process.
After completing this module, you will be able to:
Describe the market segments that are involved in product diffusion
Explain the roles early adopters, innovators, and early majority play in a successful marketing strategy
Use the product diffusion model to critique a marketing decision
Compare the chasm model to the product diffusion model
Describe how marketers can use thematic niches to overcome gaps in the diffusion curve
Use the concept of the chasm in a discussion of product marketing
Describe the typical life cycle of a new product
Identify specific customer groups relevant to the different stages in the product life cycle
Compare the product diffusion process to the product life cycle
Use your understanding of the product adoption and diffusion processes to develop a product marketing plan
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Watch: The Diffusion Process
Knowing how products diffuse through different customer segments over time can give you further insight into why
products succeed or fail. In this section, you find out what characterizes innovators, early adopters, early majority, late
majority, and laggards, and why these groups enter the market for a particular product when they do.
A video presentation appears below. Use this resource to discover some ways marketers can overcome the challenges of
marketing a discontinuous innovation.
Source: E. Rogers, 5th ed. (New York: Free Press, 2003).Diffusion of Innovations,
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Read: Using the Product Diffusion Graph
The following graph shows the distribution of the five customer segments-innovators, early adopters, early majority, late
majority, and laggards. You can see that the first and last segments to get into the market, the innovators and the
laggards, account for a small proportion of sales. The majority of sales comes from the early majority and late majority
markets.
Innovators
These customers are the first to adopt a new innovation. They believe that newer technology will improve their lives, and
they have a great interest in tinkering with it and learning all about it. In a workplace or a family, these "techies" are likely
to be the people others go to when there's a problem with the copier or the coffee maker. They are not intimidated by the
complexities of new technology.
Unfortunately, these technology enthusiasts do not always have a lot of money. Instead, they have influence; they are the
"gatekeepers" of the rest of the product life cycle. Their negative opinion can cause a new product to fail. Companies often
give innovators free products in order to gain their support.
Early adopters
While these customers, like innovators, want to be the first to adopt new products, their motivations are different. They are
not interested in technology for its own sake, but for the competitive advantage it provides. They have more money and
resources than innovators and are very influential on other potential customers.
The one drawback to early adopters is that they often demand changes to products to meet their specialized needs, which
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can be problematic for research and development departments. Together, the innovators and early adopters constitute the
early market.
Early majority
These customers make the majority of new technology purchases. They are not interested in being the first consumers
and have no special interest in technology, but they do wish their companies to be productive. Thus they adopt
technologies once the products have been proven effective.
The early majority are pragmatists who tend to buy from the market leaders. They believe the market leader's products are
most reliable and compatible with other products, and are a better value as a result.
Late majority
These customers distrust new technologies and only adopt them when they feel they have little choice. They are
concerned about price and are very demanding.
They are nevertheless an important source of profit for technology companies. If firms can simplify their products so that
they work without problems, the conservatives, who make up the late majority, can be loyal customers.
Laggards
Laggards represent fewer customers and more critics of new technology. The goal of marketing should be to sell around
them rather than to them.
The customer group descriptions presented here were developed from Geoffrey A. Moore, Inside the Tornado: Marketing
New York: Harper, 1995). In his book, Moore refers to these groups asStrategies from Silicon Valley's Cutting Edge (
"technology enthusiasts" (innovators), "visionaries" (early adopters), "pragmatists" (early majority), "conservatives" (late
majority), and "skeptics" (laggards).
Moore, G. A. New York: Harper, 1995.Inside the Tornado: Marketing Strategies from Silicon Valley's Cutting Edge.
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Watch: How Important is the Early Market?
Sales, as we saw, are driven by the customers in the middle part of the diffusion curve. So why do marketers focus on
early adopters when introducing a new product to the market?
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Watch: Cracks in the Diffusion Curve
While early adopters are an important focus of your marketing effort, the diffusion to the next, more lucrative, group of
adopters does not always happen. This is especially true in the technology market.
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Read: Crossing the Chasm
Key Points
The gap between the visionary customers and the mainstream market is so significant as to warrant being called a chasm
The challenge is that different groups have different values that hinder communication
Developing a whole product necessitates focusing on a single segment in order to establish a foothold in the mainstream
market
Focusing on the early market is often a good marketing strategy. However, marketers sometimes find that certain products
that do well with the early adopter segment are not adopted by large numbers in the early majority segment.
In his 1995 book, , Geoffrey Moore describes a marketing phenomenon he calls "the tornado". WhenInside the Tornado
companies experience the tornado, they achieve great success and rapid growth by marketing new discontinuous
innovations. In chapter two, "Crossing the Chasm," Moore warns that firms often fail to bring their innovations to a broad
market and thus do not enter the tornado. Moore also offers a strategy for negotiating this challenging period of a
product's life cycle. A synopsis of this chapter appears below.
Since the 1950s, marketing strategists have used the product diffusion model, also called the Technology Adoption Cycle,
to predict how customers will adopt new discontinuous innovations. This model presents five customer types: innovators,
early adopters, early majority, later majority, and laggards. Each category is based on how likely a customer is to adopt a
new product; that is, how risk-averse he or she is. Since discontinuous innovations require customers to change their
behavior, innovators are the customers most likely to take the risk and laggards the least.
The Strategy
The following marketing strategy based on the product diffusion model was developed in the 1980s:
Give products to the innovators or technology enthusiasts so that they can influence the early adopters
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Work to turn the visionary early adopters into satisfied customers so that their experiences will have a positive effect
on the pragmatic early majority
Become the market leader and get the majority of business from the early majority
Use success with early majority to make products acceptable to the late majority
Ignore the skeptical laggards
The Chasm
Unfortunately, in practice, this marketing strategy did not always work. The difficulty was in moving from the visionary early
adopters to the pragmatic early majority; the different values of the two customer groups hindered communication
between them.
The early adopters tend to be intuitive and contradictory. They take risks and are motivated by future possibilities. The
early majority, on the other hand, are analytic and conformist; they tend to stay with the herd. As a result, early adopters
sometimes have trouble influencing the early majority. The pragmatic early majority find the visionary early adopters
dangerous.
Moore calls the point at which firms fail to make the transition between these two markets the "chasm." Once a product
crosses the chasm, it enters the mainstream market. Investors are eager for the products to enter this market. If the
chasm period is too long, investors sometimes withdraw support -- often blaming management. Therefore it is important to
make the crossing as quickly and smoothly as possible.
Crossing the Chasm
An effective strategy for crossing the chasm involves being aware of an important difference between the visionaries and
the pragmatists. Visionaries are willing to take the risk on an unproven product, but pragmatists want a completed, proven
product (whole product). However, no products can be whole for every segment, so developing a whole product
necessitates focusing on a single segment. A firm needs to take the risk on that single segment, or niche, in order to
establish a foothold in the mainstream market.
The Documentum Example
Documentum, a division of EMC, is a document management software business. For many years in the early 1990s, it
was unable to penetrate the mainstream market: it was in the chasm. It managed to cross this chasm by a deliberate
strategy of focusing on a niche market. It targeted its first niche by first asking these questions:
Is the customer well-funded and accessible?
Do they have a reason to buy from us?
Can we provide a whole product?
Is there an obvious competitor that might take our business?
Can we use this segment to enter other segments?
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Documentum decided that the pharmaceutical industry was an ideal niche, and so it entered the market by developing a
product for CANDA (Computer-aided New Drug Approval). Once it became the market leader for this product, it gained
many new pharmaceutical customers, and eventually dominated the industry. The Documentum example shows the
importance of gaining a first, focused foothold in the mainstream market by putting resources into a niche market.
Source: Geoffrey A. Moore, Inside the Tornado: Marketing Strategies from Silicon Valley's Cutting Edge (New York, NY:
HarperCollins Publishers, 1995): 13-18.
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Watch: Strategies for Crossing the Chasm
Now that we have identified a major barrier to market diffusion, let's explore strategies for crossing the chasm.
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Read: The Life of a New Product
is a framework for examining how the sales of a new product evolve over time. It describes whatThe product life cycle
happens as a new product is introduced to the marketplace. It also considers changes that occur in terms of the
competition and consumers, and thus provides information about the changes marketers need to make in their strategies
over the lifetime of the product.
The product life cycle framework comprises four main stages: and Differentintroduction, growth, maturity, decline.
consumers enter the marketplace at each of these stages. Some consumers enter early, and some enter later, when the
product is more mature.
There are also different competitors at each stage of the product life cycle. Early in a product's life there are few
competitors, but as a product enters the growth stage, it attracts more competitors. In the growth stage, marketers may
still focus on gaining new customers, and they may fail to note the change in competition. Once a product is mature and
there is less growth, the marketing focus changes to looking at competitors and gaining market share.
One danger associated with this framework is the risk of it turning into a self-fulfilling prophecy. When a product is at the
end of its life cycle and enters the decline stage, the framework recommends withdrawing marketing support. If sales are
going to decline no matter what, it would be a waste of resources to invest marketing dollars. However, if you withdraw
marketing support, a product will inevitably decline. Thus, there is a risk that the framework will control the life cycle rather
than describe it.
A product can have a long lifetime, and it's not always easy to predict when the decline period will begin. Also, firms can
relaunch products within a brand or a product category. Thus, while the product life cycle framework is a powerful one,
and useful for thinking about the changes a product goes through over its lifetime, marketers should use it with care.
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Watch: How Adoption, Diffusion, and the PLC Work Together
Let's now compare the product diffusion process with the product life cycle framework (PLC).
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Watch: Thank You and Farewell
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Supplemental Reading List
To learn more about the concepts presented in this course, you may want to consult, on your own, the following
supplemental resources:
(1991) - "Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers." Moore, G. A.
New York: Harper.
(1995) - "Inside the Tornado: Marketing Strategies from Silicon Valley's Cutting Edge." Moore, G. A.
New York: Harper.
(April 2004) - "The Ambidextrous Organization." O'Reilly, C. A., and M. L. Tushman.
Harvard Business Review: 1-3.
(2003) - "Diffusion of Innovations, 5th ed." Rogers, E.
New York: Free Press.
(1993) - "The Design and Marketing of New Products, 2nd Ed." Urban, Glen and Hauser, John.
Upper Saddle River, NJ: Prentice Hall.