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this podcast is brought to you by
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knowledge at Warton please visit
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knowledge. won. up.edu for more
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information it is a well-established
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principle of new product development
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that a small group of early adopters can
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influence Mass market adoption of a new
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product there's lots of cases where you
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know I buy they buy the more they buy
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the more excited I am about buying as
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well what is less well understood is the
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effect the mass Market has on the early
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adopters the question is when they start
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selling to those other individuals what
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is the feedback or what's the impact on
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the uh on the original group Wharton
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marketing professors John Jang and David
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rebstein are shining a light on the
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topic by quantifying the degree of
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negative influence the mass Market has
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on early adopters it's not surprising in
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a lot of image oriented products you
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know I buy they buy I'm less inclined to
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buy and I'm ready to move on to
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something different for example um I was
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getting ready to teach a case on diesel
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to my uh seconde marketing strategy
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class and I thought I ought to go to the
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diesel retail outlet and maybe buy a
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pair of jeans I go into the store and
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they quickly want to Usher me out you
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know and they say to me um excuse me sir
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um were you looking for another
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store and actually tried to get me out
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of the store before I had much of a
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negative influence on other customers
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and I think their belief was that if I
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bought the product this would not be
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good advertising for them rebstein and
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jang's paper suggests first of all that
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firms should be cognizant of the
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potential backlash effect when
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introducing a product to a new segment
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of customers when we explain it to
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people intuitively it makes sense what's
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interesting is that we're quantifying it
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and example that we talk about in the
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paper and we've got data to sort of show
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that this effect happens Porsches is
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doing great selling to you know sports
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car Enthusiast and had a great
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reputation there they're looking and
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saying whoa look at this other Market
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over here of SUV drivers and Porsche
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moves to introducing an
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SUV it's not clear to me how much they
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thought about what the backlash would be
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what you will see is the Porsche cells
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were doing
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well you see a direct impact as the SUV
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sales start going uh and taking off not
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only were the there letters to you know
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various different Publications
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complaining about how could how it could
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Porsche possibly be doing this and
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destroying the brand but you saw it in
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the sales too and and it is my belief
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and the data supports it that um the
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introduction of the SUV the Porsche SUV
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had negative repercussions one of the
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purposes of the paper is to get people
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people to concentrate and think about
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that backlash Jang and rein's paper not
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only documents the backlash effect but
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presents a strategy for managing product
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introductions in the presence of that
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effect what we develop in the paper is
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sort of an issue of What's the timing
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how far do you want to get in the
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penetration it's also a function of
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what's the relative size of those
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markets and you know you're willing to
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sacrifice some sales in that first
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Market if that second segment is
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sufficiently large our study shows that
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uh in fact that even with the backlash
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effect in many kind of a situations you
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still want to get into this General
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market um the reason is very simple the
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backlash effect is a dynamic effect the
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leverage effect is also a dynamic effect
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and by judiciously select the timing of
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a market entry you can actually maximize
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The Leverage effect and minimize the
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backlash effect so one of the
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interesting consequences are if I'm
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going to go into the second
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Market should I do it with a different
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brand and so there's going to be some
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followup in trying to think about you
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know what's the cost of developing a
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second brand and try and compare
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development of a second brand versus
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staying with the uh with the original
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brand for more information please visit
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knowledge. won. up.edu
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