It’s no wonder that most companies search for a new product that is able to attract the majority of the consumers. It’s no surprise after all, as they will let your business model leverage on the mass to buy cheaper resources, produce at lower costs and ultimately earns more money.
However, to be able to position a product as a mainstream option you can’t expect to find shortcuts to achieve this greatness. You will have to ride “the law of diffusion” wave and start with the innovators (2,5%) and the early adopters (13,5%) before you can get to the vast majority (68%).
In every industry you will find the player, the observers and the people who don’t even know that the game is being played. Innovators and Early adopters will give way to early and late majority, but trying to skip steps may lead to chaos.
I will share a success and a failing business case from my experience in the coffee industry:
In the 1970s, most coffee around the world was purchased grounded (as is today in some regions), It was a mature industry and most minds thought there was little they could do to improve their business profitability.
By 1976 Nespresso (a Nestle Brand), had developed a new coffee system consisting of an encapsulated coffee pod changing the way most people drank coffee. After petitioning for patents Nespresso was first introduced in Japan (whose culture allowed a greater base of “early adopters” that could interact with the product).
With a proven concept and a lot of know-how, in the 1990s they started with the first international expansion to USA and France and a few years latter was available in most European Countries and Australia.
Each country showed different speeds “riding” the diffusion wave but as early adopters influenced the early majority the size of the business started an impressive growth.
Nowadays, Nespresso is one of the most profitable Nestle owns. It’s available in more than 50 countries and accounts for more than 220 exclusive stores. Nespresso still grows at double-digit rates (in a world-recession).
This is a very recent Sara Lee introduction (it is still on the shelves) that is not working. Traditional coffee consumers have migrated to a premium price, premium experience coffee system that brews one espresso coffee at a time (with the touch of a button), yet Marcilla developed a coffee capsule that fits in the funnel of traditional coffee makers. The innovation tries to give the consumer the benefits of premium multi-serve coffee to the Late Adopters and Laggers of Nespresso. The innovation is clever and the coffee is great, but they came late with the innovation.
- Law of Diffusion of Innovation (andreivanchuk.com)
- Diffusion of innovations (Wikipedia.org)
- The Secret to Accelerating Diffusion of Innovation: The 16% Rule Explained (innovateordie.com.au)
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