Predicting Diffusion - Ngôn Ngữ Anh | Trường Đại học Quy Nhơn

9 - 520 - 012 J U L Y 1 8 , 2 0 1 9 J O H N G O U R V I L L E
Four Products: Predicting Diffusion (2019)
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 i
s easier for certain classes o f new
products than for others. For new consumer package goods, 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 i
n a small section o f the country to assess consumer acceptance. Quite often, for
new products that represent incremental variations or improvements over existing products, marketers
do a pretty good job o funderstanding how that product will be adopted i n the marketplace. This i s not
to say that managers always get it right, as has been made evidently clear in the case o f New Coke,1
dry beers,2 and the Edsel.3 However, more often than not, managers o f incremental new products
predict demand within the right order o fmagnitude.
Contrast this with “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
services. For these types of products, consumers have either (1) no benchmark or (2) an inappropriate
benchmark for understanding the product. Consider the telephone. When first introduced to the world,
it was dismissed as a curiosity item, unlikely to replace the seemingly adequate telegraph. And with
the personal computer, it took consumers years to understand what it was and how it might impact their lives, and even then, i
t still only penetrated 30% o fhomes 1 5 years after i t was first developed.4
For these new-to-the-world products, it is much more difficult to predict consumer acceptance (at least i n the short run). This i s not to say that firms d
o not try. Many firms develop predictions either
1 New Coke was a reformulation of Coca-Cola’s flagship product. It was introduced to the world on April 23, 1985, after blind
taste tests showed it to be preferred to traditional Coke. Consumer backlash was almost immediate, forcing Coca-Cola to
reintroduce it traditional product s
as Coca-Cola Classic and to eventually drop New Coke i n most markets.
2 Dry beers were a 1980s attempt by the beer manufacturers to expand the market for beers. They were lower in alcoholic content,
crisper, less sweet, and had less aftertaste. After several years of activity, they almost completely disappeared from the marketplace.
3 The Edsel was introduced in 1957 by the Ford Motor Company to great fanfare. Ford anticipated sales o fover 1 million vehicles
in its first several years. In the end, however, consumers found it to be ugly and uninspired. It sold only about 100,000 units
before it was discontinued i 1960, n it na s
me synonymous with the greatest flop i automotive history. n 4 Tom Coughlin, “ Co Personal
mputer And Mobile Phone Growth To Drive Storage Trends,” February 7, 2016.
https://www.forbes.com/sites/tomcoughlin/2016/02/07/personal-computer-and-mobile-phone-growth-to-drive-storage-
trends/#2b2582a3518d, accessed July 2019.
Professor John Gourville prepared this case. This case was developed from published sources. Funding for the development of this case was
provided by Harvard Business School and not by the company. HBS cases are developed solely as the basis for class discussion. Cases are not
intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
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or otherw ise repr odu ced, posted, or transmitted, wit hout t he permission of Harvard Business School. 520-012
Four Products: Predicting Diffusion (2019) in-house o
r by hiring a top-notch consulting o mar r
ket research firm to do a demand assessment. The
approach taken in these efforts often is one of adding up the pieces—for example, “We predict 10%
adoption within Segment A, 25% adoption within Segment B , and so on.” Unfortunately, these
systematic approaches often rely upon predictions and assumptions that are shaky a best. The result t
is that sales estimates miss by many orders of magnitude. They are not off by 10% o r 20%, they are off
by factors of 10, 20, or even 100. As one colleague notes, “We’re not talking the difference between a
single and a home run, we are talking about whether we are even in the right stadium.”
Where do these predictions go astray? One answer is that these methods grossly underestimate how long i
t 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 new-to- the- world products i
s understanding what factors inherent i
n 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?
Over the next set o f pages, you will see four innovative products—some more innovative than
others, perhaps. Ten years from now, some of these products may be well entrenched in our (or some
customer segment’s) daily lives. Others may be still struggling to gain customer acceptance. Still others
may have long since disappeared, never having gained sufficient traction i n the marketplace.
Of course, it would be nice to predict demand for each of these products with some degree of
reliability. As a first step, however, a marketer might settle for understanding what consumer adoption
and product diffusion might look like. 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 likely dog?
Exhibits 1, 2, 3, and 4 provide brief media accounts of innovations that have been introduced to the
marketplace. Your job is to (1) rank the four innovations in terms of how rapidly and broadly they will diffuse i
n the marketplace, and (2) identify those high-level characteristics that account for those
predictions. Note that it is insufficient to say “this product will never fly” or “this is a silly product.”
Rather, you need to dig down and determine why i t will never fly o r why it i s a silly product. You
should also ask what changes could be made to the product to increase the likelihood of acceptance.
Finally, you should think about target-market selection. Perhaps a product makes absolutely n o sense
for the masses but will be particularly attractive to a segment of the population. What might such a
segment be and how rapidly and broadly will the product diffuse within that segment?
In the end, one should be able to identify that handful of factors that generalize across a broad class
of products. You might even develop a template or framework that allows you to assess products
beyond those identified in this case. 2
Four Products: Predicting Diffusion (2019) 520-012
Exhibit 1 Excerpt from an Article in Forbes, May 29, 201 8
This Beijing Startup Designed an Autonomous
Robot Suitcase with Facial Recognition By Ben Sin
The annual trade show CES (Consumer
colleagues from hotel entrance to check-in desk Electronics Show) i s a deluge o f smart
and successfully stopped when someone got in
appliances, many of which do things totally
its way--but there were also slight bugs here and unnecessary--case i n point, the talking A.I.-
there, including a 10 second stretch when the powered toilet- but - there are some products that
Ovis began spinning in circles.
legitimately excite the masses and prove to be of
Chee claimed these software kinks will be real-world use.
worked out long before the product hits the
A Beijing startup named ForwardX is hoping
market. Considering the funding ForwardX has
its self-driving robot suitcase belongs in the latter
already secured … and Chee's pedigree (he
camp. Having made its debut at the Las Vegas studied electrical engineering a t
trade show to positive coverage, the Ovis is
Beijing's University of Science and Technology
ready to hit the global market with a and won China's prestigious Robocon
crowdfunding campaign that starts today.
competition in 2003), the company should be able to work things out.
The company foresees most of its initial
customers to be Americans, which explains
There's one more reason to be confident: the why the marketing effort i s mostly centered
Ovis isn't ForwardX's first self-driving product.
around its [Northern California] office. But a
Ovis actually has an older brother of sorts- a - self-
week ago, I got the chance to meet company
driving factory flatbed truck that is being used in
founder Nicholas Chee for a demonstration i n
some o f the warehouses o f JD.com, one o f Hong Kong. China's e-commerce giants.
At first glance, the Ovis looked like any other
Chee, 37, said he started ForwardX two years
suitcase: it's rectangular, black, has four wheels.
ago after a decade of working as hardware and
But upon closer examination, I could see it has
software engineer for various companies in
two USB ports for charging gadgets and a 170-
China because he "wanted a companion during
degree wide-angle camera lens that is essentially his travels."
the Ovis' eye. That, combined with the facial
As mentioned, ForwardX i aiming this s at the
recognizing, body movement-tracking algorithm
U.S. market so Ovis has been built to cater to the
developed by Chee, allows the Ovis to follow its
[stricter] U.S flying regulations. For example, the
owner around without additional assistance.
suitcase has a built-in weight sensor to detect its
At CES, the suitcase could only follow a
own weight; its 50wH battery (that can
person from behind. Since then, the company has
supposedly push the Ovis for 12 miles) can be
improved functionality so the suitcase can now
easily removed to get through security; and the
follow its owner side-by-side, and according to
suitcases' lock is TSA-approved. … [The] final
Chee, avoid obstacles (aka moving humans) that
retail price will be around $700. may get in the way. …
Personally, I'm happy just lugging my own
I conducted my own test during our meeting, bag a airport t s. But then again, I'm n jet o -setting
and I found that the Ovis mostly lived up to the CEO.
marketing claims--it followed one of Chee's
Source: From Forbes.com. © 2018 Forbes. All rights reserved. Used under license. 3 520-012
Four Products: Predicting Diffusion (2019)
Exhibit 2 Excerpt from an Article in the Santa Fe Reporter, October 2, 201 8 Death Becomes Him
Entrepreneur Tackles Cremation Industry through Science and Design By Julie Goldberg
Disclosure: For many years, I have served in
Crowe began creating products and selling
some capacity as a judge for MIX Santa Fe's
them on the internet. One is named Paul, a giant
BizMIX competition5, an accelerator program for
torso whose crotch serves as a phone charger.
local entrepreneurs. I always enjoy reading the
Another iterates on the selfie-stick by allowing
various pitches and proposals and, as an
users to take photos in which they appear to be
inherently lazy person, admire all the folks in
holding hands with someone else. Both were
Santa Fe toiling to create new restaurants,
intentionally funny and designed as objects of
services and products for the rest o fus.
both aesthetics and discourse.
This year, one of the initial pitches last spring
But after Crowe's grandfather died in 2015 , stuck out to me as i t proposed a business to the entrepreneur began thinking less
revolutionize cremation via new technology with
humorously about society's relationship to
help from Los Alamos National Laboratory.
technology and more intently about the culture's
Always on the look-out for science-meets-world
relationship to mortality. "I started to research
stories, as well as a sucker for anything that
death and mortality because I was facing m y
sounds like the premise for a zombie flick,
mortality for the first time watching him die," he
I contacted Parting Stone founder Justin Crowe says.
and invited myself over to his Second Street studio to learn more.
He was thinking about how people inherently
strive to remain connected to their loved ones Crowe, 30 , received a BFA i n ceramics from
after they die, and also began mulling the average
Alfred University but, even as an art student, was
experience for those whose loved ones are
just as drawn to the commerce side o f the cremated: the trauma o f seeing a loved one
endeavor. When he analyzed all the things
reduced to ash and bone, followed by the
he loved about pottery—an obsession from the challenge o
f deciding how to live with those age of 10—he soo n realized h e loved creating
remains. Crowe describes the entirety o f the things and h e also loved selling them: an
cremation industry as "an unfortunate user entrepreneur was born.
experience," and set about improving it.
"Building businesses feels like building art,"
Knowing a bit about glaze chemistry, he
he says. "You start with nothing, you have an
began experimenting with adding ashes to glazes
idea in your head … you have to figure out the
and from there launched Lifeware, a business
tools that you need and the people you need and
that incorporated remains into jewelry and other
the funding you need and … slowly you take the
objects. Crowe then began further
world that's in your head and get the rest of the
investigating the funeral industry, a point of
world to see it like that. That was my process with
interest that became an obsession. …
art and that's also my process with business."
"We were making cremated remains beautiful
and touchable and displayable," he says, but
5 Mix Santa Fe is a Santa Fe, New Mexico-based community
effort to encourage business, artistic, and social development.
BizMix is a business plan competition they run every year. 4
Four Products: Predicting Diffusion (2019) 520-012
nonetheless, people were still left with 12 cups of
rate), but the disruptive nature of Crowe's idea
ashes. Crowe pushed forward. His current touches o n a variety o complex f issues regarding
business, Parting Stone and its technology,
attitudes toward death and memorialization.
Purified Remains, takes cremated ashes, removes Moreover, the rise o f cremation versus burial
impurities, superheats them into molten remains
created an opening for someone with an
and then creates "purified remains," a solid object
entrepreneurial spirit. "The death industry is so
(or possibly many solid objects) that can be
starved of innovation," Crowe says, and "that's touched and displayed.
created a situation where there's a lot of opportunity."
Crowe applied for and received help from the
New Mexico Small Business Assistance Program,
On Sept. 20, judges picked Purified Remains
which connects small businesses with technical
as the top BizMIX recipient and awarded it
challenges like his to either [Los Alamos National
$5,000. Crowe also picked up a CEO through the Laboratory] o r Sandia National Laboratory.
… process (BizMIX mentor Kimberly Corbitt)
Crowe was paired with [Los Alamos] scientist
and is on his way to launching what appears to
Chris Chen, who described to me the technical
be a very successful endeavor.
problem of firing the ashes at a high temperature
with a small amount of glass to create a solid
"The dream is that we're creating a new form
object as a "very easy" problem to solve.
of human remains," he says. "The results will be
beautiful and touchable and clean, and they're
The science may not be complex (if you have
going to have a really good and beautiful user
a PhD in material science and engineering at any experience." Source: Julie Goldberg, Santa Fe Reporter, October 2, 2018, accessed online a t
www.sfreporter.com/news/theinterface/2018/10/03/death-becomes-him, on July 2, 2019. 5 520-012
Four Products: Predicting Diffusion (2019)
Exhibit 3 Excerpt from an Article appearing in The Boston Globe, April 21, 201 8
Climate Control: On Your Wrist
The Embr Wave Functions Like a Personal Thermostat, to Cool You Off or Warm You U p By Hiawatha Bray The Embr Wave i s the sort of gadget you
invent a way to warm up one person without
might see on a TV infomercial at 3 a.m. — a
affecting the surrounding environment.
chunky little box that straps around your wrist
like a watch. Except it doesn’t tell time, but rather
The Embr Wave bracelet contains a Peltier
functions like a personal thermostat, cooling you
device, a heat exchanger made o f multiple layers
off when you’re hot or warming you up when it’s
of different materials that get hot or cold when chilly.
electricity is passed through them. By reversing
the flow of current, the Peltier device can either
It sounds crazy, and even a little scammy. But cool o r warm a person’s skin.
before you grab for the remote, check out the cast of characters. The Wave
doesn’t generate nearly enough
heat or cold to change a person’s core
The Embr Wave was designed by three guys
temperature. But Sam Shames told me that’s not
from the Massachusetts Institute of Technology,
the goal. Instead, the Wave is supposed to work two with doctorates i n materials science. Their like downing an icy beer i n July or holding a
Somerville-based company, Embr Labs, has
steaming cup of coffee in January. It’s the sudden
attracted venture investment from a pair o f surge o f heat o
r cold that makes us feel better,
technology titans, Intel Corp. and Bose Corp., as
even though our core temperature has hardly
well as a $225,000 research grant from the changed.
National Science Foundation. Researchers at the
University of California at Berkeley who tested
The Wave bracelet contains software that Embr Wave o t n heir students say i tworks.
varies the effect, producing pulses of heat or cold
that you feel on your wrist through the bottom of
And even at a hefty $300 a pop, Embr Labs has
the device. It’s this constant variation that helps
sold more than 4,500 bracelets in just six months.
make it effective, Shames said. You adjust the
If this is just a gimmick, it’s a mighty effective
setting by pressing one end of a temperature bar one. for warm, the other for cool.
Co-founder Matt Smith acknowledged that
Still, the effect isn’t dramatic, like walking into
the whole thing seems quixotic. When he and
a sauna or a stand-up icebox. In fact, it’s largely
MIT colleagues David Cohen-Tanugi and Sam
psychological. The Wave makes people feel
Shames came up with the idea several years ago, cooler o
r warmer even though their body
none of them were convinced it would work.
temperature hasn’t changed. It sounds a bit like
voodoo, especially since Smith said the Wave has “This i a
s really weird project,” said Smith. “It
no effect on people who are already comfortable. goes against intuition.”
Hui Zhang was a skeptic. But then she tried it
In 2013, the three men entered an MIT contest
out on students at the University of California at
to devise practical uses for advanced materials. Berkeley, where she i s a researcher in “human
Their inspiration came from sitting in a school lab
thermal comfort.” The experiment put 49
where the air conditioning was way too cold.
students in rooms that were either too hot, or too
Instead o f donning sweaters, they decided to
cold. After wearing the Wave bracelet for 3 0 6
Four Products: Predicting Diffusion (2019) 520-012
minutes, she said the students reported a distinct
As a result, many of us are always
improvement, roughly equivalent to a five-
complaining it’s either too warm or too cold at degree increase or decrease i n room temperature.
the office, and these people are Embr’s core
market. Smith thinks that if enough buy a Wave
“I was surprised when I looked at the results,”
bracelet, office buildings can turn down their Zhang said. …
heaters and air conditioners, saving companies
millions in energy bills and easing demand for
Shames calls [his target market], the
“thermally underserved.” He told m e that the fossil fuels.
now-familiar room temperature standard of 72 So the Wave i s more than an odd-looking
degrees Fahrenheit was established in the 1960s
wristband. It just might be a secret weapon in the by testing men o f average build, dressed i su n its.
fight against climate change. … No thoughts o f female metabolism, nor
adjustments for the rise of business casual.
Source: From The Boston Globe. © 2018 Boston Globe Media Partners. All rights reserved. Used under license. 7 520-012
Four Products: Predicting Diffusion (2019)
Exhibit 4 Excerpt from an Article appearing o n Bustle.com o n March 22, 2018
Sliced Ketchup Exists, and It Will Either Be Your Godsend, or Make You Super, Duper Uncomfortable By Rebecca Fishbein Ketchup is a universally satisfying
Sauce™ began in our homes but we’re excited to
condiment, adding a necessary oomph to bring it to the shelves o f grocery stores
everything from french fries to hot dogs to, um,
everywhere. In addition, we hope Slice of
salad, DON'T JUDGE ME. Of course, ketchup is
Sauce™ will address a need for healthier
also a pain in the butt. It takes forever to come out
alternatives in schools, hospitals, and the
of bottles and tends to end up being too much o r
military." Emily and her business partner, Thac,
too little. (Don't even get me started on ketchup
plan to use the Kickstarter funds to help finance
packets, which are useless, messy, and frequently a manufacturing spot i n Brooklyn and the
manage to land on the nearest garment.) Some
necessary labor to produce the product; they'll
innovative souls have seen our ketchup woes and
also go toward packaging, branding, and
come up with a solution: slices of ketchup, which
shipping, in addition to Kickstarter fees and
won't squirt or get your bread soggy. Genius. processing.
[T]hese inventive ketchup slices come
"We’ve been working with a manufacturer in
courtesy of Bo's Fine Foods, and they're dubbed
Brooklyn, NY to produce our hand-made slices
"Slice of Sauce." According to Bo's Fine Foods's
and we're ready to fulfill orders," the site reads.
website, the slice creator, Emily, was inspired to
"We’re confident that we can satisfy our backers,
transform ketchup into a more manageable
however, we encourage your early support in
condiment while trying out some of her family's
order to ensure timely deliveries."
recipes, as handed down to her by her father,
who was a restauranteur in Michigan's Upper Slice o
f Sauce isn't the first dried ketchup
Peninsula. Somehow, that experimentation led to
initiative of its kind, though it appears to be the
Slice of Sauce, a "no-mess, portable condiment
first with a crowdfunding campaign. A Los
that adds a layer to flavor to anything from
Angeles-based restaurant, Plan Check Kitchen +
burgers and sandwiches to wraps and burritos,"
Bar, started cooking up something called per the site. …
"ketchup leather" back in 2012, and it's pretty
much the same thing as Slice of Sauce. Per LAist, [T]he Slice o f Sauce creator was actually
chef Ernesto Uchimura invented the ketchup
trying to make a BBQ sauce when this dried
leather, dehydrating ketchup in an oven until the
ketchup was birthed; after braising a bunch of
condiment has the consistency of a Fruit Roll-Up.
veggies for that sauce, she ended up mixing,
Like Slice of Sauce, this innovation keeps bread
grounding, baking and drying them, hence the from getting soggy.
strip of condiment. And earlier this month, she
launched a Kickstarter for Slice of Sauce in hopes
Then again, as the Atlantic pointed out in 2015, of getting the product i st n ores nationwide.
we really don't need to improve burgers by
jazzing them up with chewy ketchup. The piece
"We set out to share our passion for healthy
notes that it is cool to add something new to a
living and our love o f food," the Kickstarter's
classic dish, which the ketchup leather succeeds
mission statement reads. "We want to spread
in doing, but to claim that soggy buns are a
awareness that products with clean labels and
problem is taking the whole thing a step too far.
ingredients with integrity can also be fun. Slice of
… Just some food for thought.
Source: Copyrighted 2018. Bustle Digital Group. 2151638:0520AT. 8