Robert Winsor, a researcher at Loyola Marymount
University in Los Angeles, recently startled the marketing
world by correcting an error nearly all marketing researchers
have repeated for decades; and by correcting this error, he
revealed a new marketing metaphor we can use to visualize the
way people influence each other to adopt new products and
services.
Winsor presented his paper to the 1994 Southwestern
Marketing Association Conference, and you can imagine how
those in attendance must have felt: You're carrying on
business as usual and a young fellow points out a mistake
you're making (like using division instead of multiplication
in a calculation you've performed countless times). You
pause to consider his words and realize he's right. What
would you do? . . . throw him out? . . . give him your keys
and retire?! They gave Winsor a distinguished paper award.
Of course Winsor had the advantage of fresh knowledge in
mathematics and physics which revealed the mistake.
Eventually, someone would have noticed. In the past
researchers had assumed a level of stability in market
conditions that simply doesn't exist, and they had assumed a
level of trial-and-error marketing practice that is
unrealistic. These assumptions had been required by research
designs they used to figure adoption forecasts, the relative
influence of advertising and other marketing factors, and to
understand the role imitation plays in adopting new products.
The formulas they used demanded it, but now that has changed.
Winsor uses the term percolation to explain his understanding of how product innovations
actually spread through a market, and he uses the example of
a forest fire to illustrate it.
The chance that an individual tree will be consumed in a
fire depends upon neighboring trees, how many of them burn,
how long the tree is exposed to high temperatures, and if the
tree is isolated without nearby burning trees to provide a
source of ignition. In dense forests, most trees will burn,
but in sparse forests, few trees will burn.
Translated into marketing insights, if potential customers
are surrounded by people who have adopted a product
innovation, and if this adoption is repeatedly brought to
their attention, it's likely they will also adopt the
innovation. Multiplied over an entire market, this
innovation will be a success. But if the reverse conditions
prevail, the innovation will not reach a level of acceptance
necessary to remain in production. It will fail.
Carrying the forest fire analogy one step further, one way
to enhance the chance of market success is to introduce
numerous ignition points simultaneously . . . rather than a
single lightning strike starting a fire, 1,000 simultaneous
lightning strikes. Rather than a few adopters of an
innovation concentrated in a small market segment, many
simultaneous adopters scattered throughout the target market,
adopters visible to nearby potential customers.
Also, when competing brands introduce the same innovation,
an adoption of one brand not only reduces the potential
market for other brands, it also eliminates the imitative
value those customers could have offered others. This
analogy vividly highlights the importance of being first to
introduce a product innovation.
Ideas to keep in mind, thanks to Robert Winsor.
Reference: Winsor, Robert D. (1995) Marketing Under Conditions of
Chaos - Percolation Metaphors and Models. Journal of Business Research,
34 (1995), pp. 181-189.
Business Practice Findings, by James Larsen, Ph.D.
A New Marketing Metaphor
California researcher contributes a fresh insight that compels marketers to reconsider their approach when introducing innovations.