What are the critical differences in the timing and position

What are the critical differences in the timing and positioning of successful versus unsuccessful innovations?

Solution

The firm should secure support from the critical member of the adoption market immediately after the launch of the product. Failure to do so may result in a lot of resistance by the later buyers and result in subsequent drop in sales of the product.

It is important for firms not to rush to market an incomplete product in order to establish their technological superiority. This propagates a very negative image of the product among the early adopters which affect subsequent purchases of the product.

Timing:

Besides the form of the inter-firms relationships with the critical members of the adoption network, it seems that the timing with which they are established is important in determining the degree of support they ensure to the innovation. The analysis indicates that sometimes firms deliberately postpone the establishment of strategic partnerships with the adoption network on the assumption that, once the innovation has taken off in the market, its critical players will support it of their own accord. However, it often happens that, after an initial, unexpected growth of the new product’s sales, the innovation never diffuses in the largest part of the target market. This is what happened in the commercialisation of the MiniDisc: Sony refused to partner with consumer electronics outlets (which played a critical role in ensuring a wide availability of recorded music albums) in the belief that the new format would diffuse into the mass market and, as a result, force outlets to provide the required shelf space. This phenomenon is due to the fact that the bulk of a high-tech consumer innovation’s target market is made of people who resist new products and experience a high level of uncertainty when evaluating the opportunity to buy them. Although early adopters might be willing to purchase the new product whilst it is not backed up by the critical members of the adoption network (because they are mainly attracted by the technical content and degree of sophistication of the innovation and are able to more objectively assess its advantages), this represents an important signal to later adopters of the value of the innovation, which helps reduce their resistance and customer uncertainty.

Positioning:

Especially for content-based innovations, it seems that a firm more easily succeeds in orchestrating the behaviour of the adoption network’s players and in securing their support if the positioning of the new product is unambiguous. The experience of 3DO in the commercialisation of the Interactive Multiplayer is paradigmatic in this respect. The new, revolutionary console always lacked a library of software titles that were able to fully exploit its graphic capabilities. This was partly due to its unclear positioning: the Multiplayer was sold as a gaming platform with advanced interactive, learning and educational capabilities, enabled by its CD-Rom support, that caused confusion in the developers community about the exact applications that were required for its commercial success. On the other hand, the NES by Nintendo was unambiguously positioned as a gaming system, and the Palm Pilot as a substitute for personal paper-based organisers.