LSM525: Introducing New Products: Successes and … succeed in marketing new products, you must...

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LSM525: Introducing New Products: Successes and Failures


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

https://s3.amazonaws.com/ecornell/content/LSM/LSM525/lsm525-transcripts.pdf


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


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


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.


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.


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.


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.


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.


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.


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


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.


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?


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.


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.


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

http://hbr.org/2004/04/the-ambidextrous-organization/ar/1

https://s3.amazonaws.com/ecornell/content/LSM/LSM525/eCornellInnovationMatrix.docx


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.


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


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,


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


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.


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?


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.


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


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?


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.


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.


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.


Watch: How Adoption, Diffusion, and the PLC Work Together

Let's now compare the product diffusion process with the product life cycle framework (PLC).


Watch: Thank You and Farewell


Stay Connected


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.

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