Four Products Case Study

Market introduction and diffusion concept

Market introduction and diffusion of new products is complex and multifaceted since it involves
spatially dispersed customers with individual preferences who may be exposed to a wide range
of influences including word-of-mouth communication within a social network. New ideas and
ways of doing things do not necessarily take hold all at once, but often spread gradually through
social networks. In the first stage a few innovators adopt, then people in contact with the
innovators adopt, then people in contact with those people adopt, and so forth until eventually
the innovation spreads throughout the society. Diffusion is the process by which an innovation is
communicated through certain channels over time among the members of a social system.
Diffusion is a special type of communication concerned with the spread of messages that are
perceived as new ideas.1
Since people are on average risk-averse, the uncertainty will often result in a postponement of
the decision until further evidence can be gathered. But the key is that this is not the case for
everyone. Each individuals innovation-decision is largely framed by personal characteristics,
and this diversity is what makes diffusion possible.2 For a successful innovation, the adopter
distributions follow a bell-shaped curve, the derivative of the S-shaped diffusion curve, over time
and approach normality. Diffusion scholars divide this bell-shaped curve to characterize five
categories of system member innovativeness, where innovativeness is defined as the degree to
which an individual is relatively earlier in adopting new ideas than other members of a system.
These groups are: 1) innovators, 2) early adopters, 3) early majority, 4) late majority, and 5)
laggards.

The personal characteristics and interaction of these groups illuminates the

aforementioned domino effect.3

Approach

Zhang, C, Song, P, & Qu, Z 2011, 'Competitive Action in the Diffusion of Internet Technology Products in
Emerging Markets: Implications for Global Marketing Managers', Journal Of International Marketing, 19, 4, pp. 4060, Business Source Complete, EBSCOhost, viewed 14 November 2014.
2
WAKOLBINGER, L, STUMMER, C, & GNTHER, M 2013, 'MARKET INTRODUCTION AND DIFFUSION
OF NEW PRODUCTS: RECENT DEVELOPMENTS IN AGENT-BASED MODELING', International Journal Of
Innovation & Technology Management, 10, 5, p. -1, Business Source Complete, EBSCOhost, viewed 14 November
2014.
3
Diffusion of Innovations, by Everett Rogers (1995). 2014. Diffusion of Innovations, by Everett Rogers (1995).
[ONLINE] Available at: https://web.stanford.edu/class/symbsys205/Diffusion%20of%20Innovations.htm.
[Accessed 14 November 2014].

The concept of Rogers (1963) was chosen by the author of this paper to evaluate each of the
products.
1) Relative advantage
This is the degree to which an innovation is perceived as better than the idea it supersedes by a
particular group of users, measured in terms that matter to those users, like economic advantage,
social prestige, convenience, or satisfaction. The greater the perceived relative advantage of an
innovation, the more rapid its rate of adoption is likely to be.
2) Compatibility with existing values and practices
This is the degree to which an innovation is perceived as being consistent with the values, past
experiences, and needs of potential adopters. An idea that is incompatible with their values,
norms or practices will not be adopted as rapidly as an innovation that is compatible.
3) Complexity
This is the degree to which an innovation is perceived as difficult to understand and use. New
ideas that are simpler to understand are adopted more rapidly than innovations that require the
adopter to develop new skills and understandings.
4) Divisibility (Trialability)
This is the degree to which an innovation can be experimented with on a limited basis. An
innovation that is trialable represents less risk to the individual who is considering it.
5) Observability of the results
The easier it is for individuals to see the results of an innovation, the more likely they are to
adopt it. Visible results lower uncertainty and also stimulate peer discussion of a new idea, as
friends and neighbors of an adopter often request information about it.
According to Everett Rogers, these five qualities determine between 49 and 87 percent of the
variation in the adoption of new products.4

Evaluation
4

Everett M. Rogers, 2003. Diffusion of Innovations, 5th Edition. 5 Edition. Free Press.

Here is the table that is dedicated to facilitate the comprehension of the approach used to
evaluate each of the four products. Maximum is five dots (or points), minimum is zero.
Depending on the factor, having less or more dots may vary in terms of positivity\negativity. In
fact, only one of them has negative proportion: the complexity, in case of which having fewer
points is the better. Further the author is going to focus more on each product to discuss the
evaluation represented in the table and add comments upon the drawback and benefits and the
likelihood to succeed on the market.
Relative
advantage
Sliced Peanut
Butter
Collapsible
Wheel
Jigsaw Puzzle
Polytrack

Compatibility

Complexity

Divisibility
(Trialability)

Observability
of the results

Sliced Peanut Butter

The sliced peanut butter from the first glance seems like an idea that has been there on the
surface for a while, but for some reasons it was not made happened until now. One of the reasons
is the technological side, which lets the substance of peanut butter being fit into this kind of a
package. If you compare the peanut butter with something similar, it will work as the sliced
cheese for sandwiches which was there on the market for quite a while and gained some success
among the consumers. That is the reason for getting this high number of points for the relative
advantage it is truly easier and faster to make a sandwich with a slice that using a knife. The
author also can imagine quite well how it can fit the daily routine anyone who likes peanut butter
sandwiches. There is a limitation, however, concerning the fact of the existence of a specific
ritual of preparing a sandwich for a little one or a special someone. This leads to the average
number of points for complexity there might be a frustration if you see the sliced peanut butter
for the first time. But the cost of a pack is good question to answer, because the author had put
maximum number of point for the trialability only keeping in mind the assumption that the
cost is comparable to the classic package of same\slightly less weight. The loyalty index to a
specific brand of peanut butter is comparable to the average of the FMCG industry, so it is
actually quite high, die to the fact that people buy a specific product either for a taste or for an

association with it. The results are visible from the point the package is opened you can see
that the slice fits the slice of bread perfectly. However, it greatly depends on the quality of the
final product available on the shelf. All in all, in order to avoid any frustrations of the customers
and the producers, it is highly necessary to test the product on different consumer groups to get
the fullest picture of the probable acceptance is a sliced peanut butter. (Note: the assumption and
the logic itself is more applicable in the USA, being known for high amounts of peanut butter
consumption).
Collapsible Wheel
The idea of reinventing the wheel itself sounds at least ridiculous, to start with. Three point for
the relative advantage mean that it is a great product itself, but people have been riding a bike
of almost the same shape and attributes mix for centuries. There is a big uncertainty of the
success in that segment that is chosen at the moment. However, despite all the skepticism, there
is already a similar bike on the market called Strida, which is convertible, light (10kg) and easy
to unfold. It costs around 700$ depending on the model, which is not comparable to desired by
the inventor of this new bike price of more than 2000$. Regarding the rate on which the new
product fits on the ordinary life, it got only two points. The complexity part is fully covered by
dots due to the fact, that luxury convertible bike is very much ahead of time it needs few more
years for it to become really accepted by the audience. The new product is easy to use, but hard
to buy due to the very high price the estimated market is not ready, the existing one is very
small. However, if used, the results are seen very easily.
It would be a great option to find a better concept for this collapsible wheel technology, e.g.
strollers, wheelchair, etc.
Jigsaw Puzzle
The jigsaw puzzle is a luxurious puzzle, handcrafted and very difficult, due to its 3D
technology, level of difficulty and uniqueness. It is a great present for those, who, as it was
called by the author of the article, already have everything. The market of luxurious presents is
estimated by billions of dollars. The relative advantage is stated for the puzzle as above
average because it stands out in the group of other luxury items due to the fact that it actually is
able to entertain the owner and keep him busy for quite a while. It has the same idea as the
traditional puzzles but looks much more beautiful and unusual than the average puzzles form a
hobby shop. The complexity is low in terms of knowing how the puzzles work, and the actual
complexity depends on the level of difficulty of the certain item. The divisibility is high because

its relatively easy for a person to buy one, while the results availability gets the maximum
number of points the person who got that as a present is entertained and feels unique.
Polytrack
The relative advantage is high, the number if injuries is less, the compatibility is high, however
there is a very well-spread frustration about having a completely different ground. It was partly
solved by this major deal with Turfway, however there is still room for improvement. That is the
reason for the stated mark on complexity. The divisibility is assessed by four dots because the
purchase of the ground means the redevelopment and sunk costs of the days while the new
ground is prepared. The results will not be obvious immediately, but soon, depending on the
average rate of capacity loading of a specific venue.
To the point of view of the author of this paper, the most profitable and successful, even in the
long run, should be the jigsaw puzzles: they are unique, they are hand-made and in the century of
advanced technology it values a lot. Moreover, the market can easily get the idea and basically,
fall in love with the idea, how it was even with iPhone. Myself, I can see possibility to invest in
such kind of a product. The second option to invest to would be the Polytrack a simple thing
that is able to save lives of both people and animals. And I can even see that in the future this
technology might gain popularity in other sports as well.