Four Products: Predicting Diffusion (2008)
• Predicting Diffusion of new products
• Four new proposed products :
1. wrapped peanut butter slices
2. Collapsible bike Wheel
3. Stave puzzle
4. New Synthetic Surface for Thoroughbreds
• One job of product managers, marketers, strategic planners, and other corporate executives is to predict what the demand will be for a new product.
• This task is easier for certain classes of new products than for others. • for instance, one can look at past product rollouts, one can look at similar products currently in the marketplace, or one can do test markets— selling the product in a small section of the country to assess consumer acceptance.
• This is not to say that managers always get it right, as has been made evidently clear in the case of New Coke, dry beers, and the Edsel. However, more often than not, managers of incremental new products predict demand within the right order of magnitude.
• “new-to-the-world” products—products that represent great improvements over products currently in the marketplace or
those that represent completely new classes of goods and
• For these types of products, consumers have either (1) no benchmark or (2) an inappropriate benchmark for
understanding the product. Consider the telephone.
• For these new-to-the-world products, it is much more difficult to predict consumer acceptance (at least in the short run).
• This is not to say that firms do not try. Many firms develop predictions either in-house or by hiring a top-notch consulting or market research firm to do a demand assessment.
“We’re not talking the difference between a single and a home run, we are talking about whether we
are even in the right ballpark.”
Where do these predictions go astray?
• One answer is that these methods grossly
underestimate how long it will take for that
demand to materialize. We refer to this as
“product diffusion”—the rate and scope of
product adoption among the target market.
• The first step in predicting demand for newto-the-world products is understanding what factors inherent in those products will either
encourage adoption or hinder adoption
among target customers.
• What product characteristics will accelerate
product purchase and usage, and what
product characteristics will act as roadblocks?
The goal of this exercise
• Over the next set of pages, you will see four
innovative products—some more
innovative than others, perhaps.
• The goal of this exercise is to compare and
contrast these four products to determine
why one might diffuse rapidly and another
not at all.
• What are the product characteristics that
make Product X a likely star and Product Y a
• Some of these are finished products, some
of these are proposed products.
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