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It took more than a half a century for the dishwasher, which was first introduced in 1893, to succeed as a mainstream product. No one sets out to develop an innovation that consumers are slow to adopt, and yet many ultimately successful innovations like the dishwasher or the microwave oven languish for years in the gap between early adopters and the mainstream market.1 Other examples of slow-diffusing innovations include automatic teller machines (which were first introduced in the United States and the United Kingdom in the late 1960s), online banking and alternative fuel vehicles.
Slow takeoff times mean delayed returns on investment or, in the worst case, negative payback if the product is pulled from the market before sales have a chance to take off. Slow takeoff times have been attributed to high introductory prices,2 uncompetitive products that are low quality or insufficiently innovative3 or failure to develop niche markets.4 Another reason is consumer resistance to an innovation,5 which may arise because the innovation conflicts with consumers” ingrained belief structures, requires acceptance of unfamiliar routines or necessitates abandoning deep-rooted traditions. Slow-diffusing innovations that require consumers to change established behaviors are called resistant innovations.6
How can managers create marketing programs that reduce takeoff time for resistant innovations? This article suggests marketing strategies appropriate for such innovations. Our conclusions stem from a multiphase research project conducted to examine why a particular innovation – screw cap wine closures – has achieved greater market acceptance in Australia and New Zealand than in the United States. (See “About the Research.”) Based on findings from this international case study, we elaborate on the role of vertical and horizontal cooperation as marketing strategies for resistant innovations and identify the reasons and conditions under which each strategy can successfully operate.
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1. As described by G.A. Moore in “Crossing the Chasm” (New York: HarperBusiness, 1991), the gap between the early adopters and the mainstream market is caused by the different preferences and expectations of these two segments with regard to the innovation.
2. P.N. Golder and G J. Tellis, “Will It Ever Fly? Modeling theTakeoff of Really New Consumer Durables,” Marketing Science 16, no. 3 (1997): 256-270.
3. R. Agarwal and B. Bayus, “The Market Evolution and Sales Takeoff of Product Innovations,” Management Science 48, no. 8 (August 2002): 1024-1041.
4. Moore, “Crossing the Chasm.”
5. E.M. Rogers, “Diffusion of Innovations,” 5th ed. (New York: Free Press, 2003).
6. S. Ram and J.N. Sheth, “Consumer Resistance to Innovations: The Marketing Problem and Its Solutions,” Journal of Consumer Marketing 6, no. 2 (1989): 5-14; and D. Krackhardt, “Organizational Viscosity and the Diffusion of Controversial Innovations,” Journal of Mathematical Sociology 22 (1997): 177-199.
7. Ram, “Consumer Resistance to Innovations.”
8. J.T. Gourville, “Why Consumers Don’t Buy: The Psychology of New Product Adoption,” Harvard Business School case no. 20039-504-056 (Boston: Harvard Business School Publishing, 2003).
10. D. Sogg, “The Science of Closures: Evaluating Corks, Twist-offs and Other Ways of Preserving the Quality of Bottled Wine,” Wine Spectator (March 31, 2005): 55-58.
11. S. Courtney, “The History and Revival of Screwcaps,” Wine of the Week (August 13, 2001), www.wineoftheweek.com/screwcaps/history.html.
12. O. Toubia, J.R. Hauser and R. Garcia, “Probabilistic Polyhedral Methods for Adaptive Choice-Based Conjoint Analysis: Theory and Application,” Marketing Science, in press.
13. Sogg, “The Science of Closures.”
14. The problem of “free riders” does exist, but it is not the focus of this paper.
15. R. Garcia and T. Atkin, “Co-opetition For the Diffusion of Resistant Innovations: A Case Study in the Global Wine Industry,” working paper 05-002, Institute for Global Innovation Management, Northeastern University, Boston, 2005.
16. This “scientific” wine consumer segment consists of wine drinkers who make wine choices based on quality and follow scientific developments in the market closely. All winemakers interviewed identified this consumer segment.
17. See www.hoguecellars.com/feature/homework.html (last viewed June 24, 2006).
18. See www.plumpjack.com.
19. See www.3loosescrews.com.
20. See www.screwcap.co.nz.
21. B. Kogut, W. Shan and G. Walker, “The Make-Or-Cooperate Decision in the Context of an Industry Network,” in “Networks and Organizations: Structure, Form, and Action,” eds. N. Nohria and E. Eccles (Boston: Harvard Business School Press, 1992): 348-365; R. Gulati and M. Gargiulo, “Where Do Interorganizational Networks Come From?” American Journal of Sociology 104 (March 1999): 1439-1493; and G. Walker, B. Kogut and W. Shan, “Social Capital, Structural Holes and the Formation of an Industry Network,” Organization Science 8, no. 2 (1997): 109-125.
22. X. Luo, R.J. Slotegraaf and X. Pan, “Cross-Functional ‘Coopetition’: The Simultaneous Role of Cooperation and Coopetition Within Firms,” Journal of Marketing 70, no. 2 (2006): 67-81.
23. R.M. Morgan and S.D. Hunt, “The Commitment-Trust Theory of Relationship Marketing,” Journal of Marketing 58, no. 3 (July 1994): 20-38.
24. L.P. Bucklin and S. Sengupta, “The Co-Diffusion of Complementary Innovations: Supermarket Scanners and UPC Symbols,” Journal of Product Innovation Management 10, no. 2 (1993): 148-160.