When does the majority become a majority? Empirical analysis of the time at which main market adopters purchase the bulk of our sales

Eitan Muller, Guy Yogev

Research output: Contribution to journalArticlepeer-review

Abstract

The idea of a dual-market structure in the early stages of a product's life cycle has become one of the most widely accepted ideas among new product marketing practitioners in the past decade. Concepts such as "Early Market/Main Market" and "Visionaries/Pragmatists" have entered the lexicon of high-tech executives to express the notion that the market for new products is composed of early and main markets with a discontinuity in the diffusion process in between them. Moreover, these concepts have been at least partially tested and verified in the marketing academic literature in the past few years. We extend this branch of research by investigating the timing issues in dual-market cases. We define Change-of-Dominance Time (CD-Time) as the number of years it takes main market adopters to outnumber early market adopters. We empirically investigate this timing issue on a comprehensive data set of new product sales in the consumer electronics industry. We find that regarding explanatory determinants of CD-Time, external influence, such as advertising, to the early market is the most important explanatory variable. We examine the relationship between CD-Time and other early product life cycle phenomena: Takeoff, Saddle, and Rogers' size of adopter categories. We found relatively high correlations between these phenomena and CD-Time. The answer to the question "When does the majority become a majority?" is indeed "at 16%"! In a dual-market setting, the average time at which the main market outnumbers the early market is when 16% of the market has already adopted the product. In terms of time, in 75% of the cases the majority becomes a majority in 5 to 10 years.

Original languageEnglish
Pages (from-to)1107-1120
Number of pages14
JournalTechnological Forecasting and Social Change
Volume73
Issue number9
DOIs
StatePublished - Nov 2006

Keywords

  • Chasm
  • Innovation diffusion
  • Saddle
  • Timing

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