Webvan spent more than $1 billion to create an online grocery business, only to declare bankruptcy in July 2001 after failing to attract as
many customers as it thought it would.
Example 2 • In spite of gaining the support of Apple’s Steve Jobs, Amazon’s Jeff Bezos, and many highprofile investors, Segway sold a mere 6,000 scooters in the 18 months after its launch—a far cry from the 50,000 to 100,000 units projected.
Example 3 • Although TiVo’s digital video recorder (DVR) has garnered rave reviews since the late 1990s from both industry experts and product adopters, the company had amassed $600 million in operating losses by 2005 because demand trailed expectations.
Product and behaviour Changes Ref: J.T.Gourville
New product forecasting models Repositioning Pre test Market New Coke Me Too Products Conjoint Analysis Burn Breakthroughs ¿? Red Bull Line Extensions Pre-test Coke Light New to company New to world Lo high high Lo
Seed enthusiasts with new products Help them educate visionaries Capture interest of visionaries Make them satisfied customers Serve as good reference for pragmatists Serving pragmatists by becoming market leader and setting de facto standards Generate volume and experience so Product s become reliable and cheap To meet demands for conservatives
The Chasm De facto standard Elegant Architecture Value Infrastructure & Support Easiest to use Reference base very important Unique functionality Market Centric Product Centric Pragmatist Visionaries
Hypersegmentation Dog’s Role Segment Brand Price/100 gr. Dog as a family member Premium Chum 8.7 pence Dog as a companion Moderate Pal and Bounce 6.4 & 7.9 pence Dog as an animal Economy Chappie 6.3 pence Reference: A. Ryans Dog as a substitute child? Super Premium
Target Market? Intense relationships, own smaller dogs, older and urban females
Benefits? Very best product that can be bought, reassurance, confidence, leads to an enhanced relationship
Name? Mr. Dog (later Caesar)
Product? Very high quality ingredients, wide variety of flavors, special packaging
Price? 17.7 to 30.7 pence per 100 grams
Advertising? Dog bringing newspaper, slippers, etc.
Results: Fours years later, it had a 10% share of the total dog food market. The total super premium segment of the market was about 15% -- about 10% coming from dog food brands and about 5% coming from fresh foods. In addition, Pedigree's premium brand retained its market share.
Managing the Hype cycle A hype cycle in Gartner's interpretation comprises 5 steps: " Technology Trigger " — The first phase of a hype cycle is the "technology trigger“ or breakthrough, product launch or other event that generates significant press and interest. " Peak of Inflated Expectations " — In the next phase, a frenzy of publicity typically generates over-enthusiasm and unrealistic expectations. " Trough of Disillusionment " — Technologies enter the "trough of disillusionment" because they fail to meet expectations and quickly become unfashionable. Consequently, the press usually abandons the topic and the technology. " Slope of Enlightenment " — Although the press may have stopped covering the technology, some businesses continue through the "slope of enlightenment" and experiment to understand the benefits and practical application of the technology. " Plateau of Productivity " — A technology reaches the "plateau of productivity" as the benefits of it become widely demonstrated and accepted. The technology becomes increasingly stable and evolves in second and third generations. The final height of the plateau varies according to whether the technology is broadly applicable or benefits only a niche market.