Introducing New Products

Nearly all business owners introduce new products and services from time to time. In fact, if you think about the purchases you made yourself in the last month, you’d be surprised how many of them couldn’t have been purchased ten years ago. Yet you didn’t wake up this morning with a desire to buy anything new, and none of your customers did either. So if you’ve got a new product or service to introduce, you’ve got a problem: you need to convince your market to try it.

Conventional wisdom claims that a better product will attract customers on the merits of the improvement (build a better mouse trap, and the world beats a path to your door). More than a few business people can testify to the fallacy of such conventional wisdom – no lines ever seem to form. More informed marketing wisdom has created a theory to guide business owners. Called the Social Factors Theory of new product use, it recognizes social forces working on people when they adopt new products and services. High status people begin the cycle by searching out products which will allow them to mark themselves as special through use of the product. As people of lesser status notice higher status people using the new products, they follow along in an effort to enhance their status through association. Unfortunately, when high status people see this imitation, the contribution the new product makes in marking their superior status begins to fade, and they must search out a new, fresh product. And by doing so, they begin the cycle once again.

This Social Factors Theory won’t work with all new products, only products that people can see in use, and products that can be associated with high status groups. Men’s underwear, for example, isn’t socially visible. But women’s perfume is.

Business owners widely use this theory to introduce new products. Open any magazine and you’ll see ads displaying new products with attractive, high-status models using them. But too often, the theory fails us, and new products fall flat. Some pieces of the puzzle seem to be missing, and Fisher and Price set out to learn what they were.

One piece turned out to be the visibility of the product. They learned that people vary widely in how visible they believe they will be when using a new product, even one which would seem to be quite visible, and this turned out to be a crucial point. If the visibility factor is low, then none of the other social influences mean anything at all. Low visibility means they believe no one will know if they are using the product. So the first lesson for business owners is to find ways to increase people’s beliefs about how visible they will be when they use your new product or service. For example, changing the color of frames of a new type of sunglasses from brown to bright pink would increase these beliefs about visibility.

A second piece of the puzzle turned out to be the influence of the superior status group: it is much much stronger than anyone imagined it would be. Fisher and Price studied this influence and found that people who observe a superior status group using a new product consider this to be an implied endorsement, especially if they believe it’s voluntary. Later, when they examine the product themselves, they will find it to have much higher quality and much better performance than people who do not observe such superior status use. They also increase their views of the social desirability of being first to adopt this new product or service, and they increase their estimates of how visible they will be using the new product.

So the second lesson for business owners is to carefully select superior status groups for your new products and find ways to make their selection and use of your product appear voluntary. Fisher and Price studied college students, and the US ski team training nearby provided their superior status group for a cordless telephone product they tested.

What is your target market for new products or services you hope to offer? What superior status group(s) most strongly influences this target market? A beautiful young woman may catch the eye of a male in an ad, but she might not influence his buying intention.

The third piece of the puzzle Fisher and Price found involves visibility and social desirability. They discovered that as people increase their perceptions of how visible they will be using a new product, their expectations for social approval also go up. The lesson for business owners is that expectations for approval can be influenced by increasing the visibility of using the product. For example, if you offer a new house cleaning service, and you have no customers, paint your van bright pink. Potential customers will increase their estimates of the visibility of using your service, and their estimates of social desirability will also increase. And if you want to mix in a superior status group, park your van in front of a few high status houses during the rush-hour. You’ll have plenty of customers before long.

Business owners need to improve the odds of success for new products and services they wish to offer their markets. And now, they have three fresh factors to consider which will help them accomplish this: visibility, superior status groups, and social desirability.

More work for you to do, but better odds for success for your business. In balance, a good piece of work.

Reference: Fisher, Robert J., and Linda L. Price (1992) An investigation into the social context of early adoption behavior. Journal of consumer research, 19 (December), 477–487.