The Most Effective Guideline for Marketing Innovation
The Technology Adoption Life Cycle describes a systematic approach towards introducing new products to the mainstream market. The model breaks down the market into several smaller segments, each with its own distinctive characteristics that can be specifically targeted when marketing innovation. Please ensure that you have read through the first part of this post before proceeding.
The Technology Adoption Life Cycle
Innovators are the first group in the market. They usually pursue new products aggressively, sometimes seeking them out even before a formal marketing program. Having the ‘latest information’ is a central craving in their life. In the best-selling book ‘The Tipping Point’, Malcom Gladwell terms such people ’mavens’ – people that go out of their ways to acquire information and knowledge about things that the general public doesn’t yet care so much for. In a given market, there are usually not many innovators, however winning them over is very important for the marketing program. Their endorsement shows credibility and gives reassurance that the product works.
Early adopters are very similar to the innovators; however their obsession with new products is not as deep. They don’t necessarily go out of their way to acquire the information, however find it easy to understand, appreciate and adapt. Unlike the later groups in the model, early adopters do not require many references from other people before making purchase decisions. They are independent thinkers, and very little marketing efforts are required in order to acquire them.
The early majority occupies half of the mainstream market. This group share some of the early adopter’s ability to relate to innovation, but are ultimately driven by a sense of practicality. They are happy to wait and see how the new products work out for other people, before giving in themselves. They require references from other customers before investing. The early majority represents a very significant share of people in the market, and winning them over is a significantly difficult challenge. Once you have managed to win them over, their association represents a great opportunity for growth and profits for the company.
The late majority is the second half of the mainstream market. Like the early majority, they are also driven by a sense of practicality and require references before making a purchase decision. The key distinction however is that they are largely conservative in their purchase decisions, and will wait until the innovation has become the established standard in the market, before giving in. They tend to buy from large and well established companies, rather than small and growing companies. Due to their sheer numbers, gaining their favor also represents a great opportunity for growth and profits.
At the very end of model are the laggards. This group simply does not want anything to do with new innovations for one reason or another. The only time they might give into a new innovation is when they absolutely must do it for the sake of their lives. Laggards are not necessarily worth pursuing as they represent a smaller segment in the market, and the amount of effort and capital required to woo them could drive the company to lose.
The way to introduce a new product to the market is by working from the left to the right of the Technology Adaption Life Cycle model. In the beginning, all efforts should be concentrated on acquiring the innovators, and then moving on to the early adopters, then the next segment, until the end of the curve. The early and late majority groups represent the mainstream market – with promises of the greatest profit margins, but unlike the innovators and early adopters, who are independent thinker, consumers in the mainstream market are highly reference based. They would like to see that other people, who are like them, are also using the product, before even considering the purchase. The product has to be mainstream and widely used enough to get their attention and confidence.
The idea when marketing innovation is to keep the process of crossing from one group to the other as smooth as possible. Momentum is very important for creating the natural effects that makes the next groups eager to buy in. Each group that has been ‘captured’ has to be used as a reference base for the next group. The endorsement of innovators is a critical proof of concept that paves the way for the early adopters. In the same regard, the endorsement of the early majority gives the late majority confidence that the product works.
Now, these transitions from one group to the next may sounds easy on paper, however there is a reason why most businesses fail before reaching the mainstream market. The pitfall is situated between the early adopters and the early majority (right before entering the mainstream market).
The mainstream market is where growth and profits lie, and accessing it is ultimately not an easy task. The pitfall exists is because the personality of the early adopters and that of the early majority varies a great deal. The early majority are highly reference based, whereas the early adopters are independent thinkers. Because of this, the early adopters do not make for reliable references for the mainstream market.
Let’s take an example for the sake of clarity. Let’s say you are an average mainstream person looking to buy a new laptop. Your friends (part of the mainstream), suggest to you the MacBook Pro, which you have seen many other people using, and have no doubt that it is a good computer. While at the shop, a computer nerd comes over and tells you to ditch the Macbook Pro and instead buy an Alienware R3 OLED, a more powerful laptop. You have never seen anyone using this laptop in your life, and although the computer nerd is obviously more knowledgeable in the subject, you will most likely still choose the MacBook Pro because you have seen other people, just life yourself, using it. In this example, the computer nerd represents the innovators (or the early adopter), and you represent a typical person mainstream market.
While people in the early majority rely heavily on references by other users that are similar to them, (as discussed in the post ‘Consumer Behavior in the Market‘) the early adopters have other motives for their being first to discover the new innovation, whether personal or economic. Early adopters do not make good reference points for the mainstream market because of the difference in personality and characteristics. The ultimate goal when marketing innovation should be to eventually break into the mainstream market, and with knowledge of the gap that exists between the early adopters and the early majority, the steps that follow requires decoding a puzzle.
The mainstream market cares a great deal about references, and will only make purchase decisions after seeing other people using the innovation. The challenge is that the only suitable reference for the mainstream market are other people like them, also in the mainstream market. As the marketer, how do you go about getting people in the mainstream market to buy your product, when they are not interested in the product unless other people in the mainstream market are already using it? How do you acquire the first set of customers? In the next discussion we shall look at how to approach this challenge and avoid the pitfall that has seized many businesses from the Promised Land.
When introducing a new product or service to the market, whether a restaurant that serves unusual food, or a new mode of transportation, it is important to understand the consumer behavior of each segment in the adoption life cycle, and then plan your marketing tactics appropriately. The successful acquisition of one segment makes it relatively easier to secure the next. Introducing a disruptive innovation to the market requires asking people to change the behavior in one way or another, and the lack of a systematic approach to this rather complex process has been the downfall of many companies.
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