Market View: Should You Follow Early Adopters or New Product Gadflies?

July 29, 2015
The marketing textbook teaches us to follow the early buyers; but are they leaders or misleaders?

Does anyone besides me think the new product curve might be someone's imagination, at least as it pertains to food? I have mentioned this to brand managers in the past, but they all seem to think that their MBA marketing textbook is equivalent to the Bible or the Koran. It must be true because it says so in my textbook. Everett Rogers introduced the concept in 1962 and everyone followed suit.

Is it possible that this concept of innovators, early adopters, late adopters, etc., is really just nonsense? Is it possible that there is just a group of people who are first buyers and they bounce around from one category to another trying new things and giving the impression that the product will be a success. Could it be that no one really follows suit and they are just new product gadflies?

This would not be such a terrible thing if it weren't for the fact that many marketers believe that these first buyers are the harbingers of success. That shortly after they make their purchases the rest of the world will surely follow, because "they are innovators and the rest of the world follows."

My guess is that we have all been misled by watching the initial success of some products, and more importantly the success of some claims that are made on products. Wow, we put organic on a label and 6 percent of consumers bought the product! The product must be a success. We are further misled by the fact that we see increases in sales in proportions that are much larger than the market in general. For example, organic sales grew from 6 percent to 7 percent which is an increase of 16 percent, whereas the base business (non-organic) grew by only 3 percent.

There was a rush to make organic products because the innovators were in fact buying more and more organic. Sales were increasing in the double digits, but in many cases that was from a very, very small amount to a very small amount. Still today, while organic sales may be growing, it is small in comparison to the non-organic market. Yet if you talk to most food companies they are all gaga about organic.

It seems to me that we should change the new product curve to have an initial group of people not called innovators but called "misleaders."

These are the consumers who can't wait to rush out and buy a new product. They create great excitement and tell their friends and family about how they in fact have found this new product. But then they move on to find the next new product.

The motivation for this behavior may be that it either makes them feel good about themselves or makes them feel really smart that they were able to find this new product. Don't get me wrong, there's nothing wrong with these people. What's wrong is that we interpret their behavior as being some initial evidence of a growing trend that they have initiated.

Now I might be totally wrong about this because I have no empirical data to substantiate my thoughts. But we may have relied too much on a variety of analytic techniques used to measure the success of potential new products based on what these new product gadflies think. I will say that for many years I tried to focus on why so many new products fail. And while there are a lot of reasons, I believe this may be one of them.

So what can you do about this? If I knew the answer for sure I would be writing this article from my island in the Caribbean and not from my home in New Jersey. However I think there may be some safeguards that we could use to help decide if the initial purchasers are new product gadflies or truly consumers who have a need and a desire for our new product and intend to continue to purchase it.

The great savior in my opinion is the various consumer household panels such as Nielsen and IRI. These give us the ability to track consumers who buy the products. I believe they could set up a system to identify consumers who are repeat purchasers of new products not just in your category but any food category. Consumers who do not repurchase a new product would be considered the "misleaders."

One can now segment or even remove the "misleaders" from the traditional trial and repeat analysis. In this way you are eliminating the people who seem to be willing or desiring to try anything but not really committed to sticking with any product.

In the absence of any evidence, it seems to me there must be some explanation for why so many new products fail when so much research is done in advance of introduction. I think we could significantly improve the success rate of new products and therefore the profitability of new products if we find some way to identify these "misleaders" and focus the analysis on consumers who are likely to continue to buy the product because they really wanted or really needed it.

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