Velocity of new product diffusion

Quelch and Klein (1996) also noted that the implication of the Internet and concomitant globalisation is that to remain competitive, organisations will have to roll out new products more rapidly to international markets. More recently, Malcolm Gladwell in his book The Tipping Point (2000) has shown how word-of-mouth communication has a tremendous impact on the rate of adoption of new products and we can suggest this effect is often enhanced or facilitated through the Internet. In Chapter 8, we will see how marketers seek to influence this effect through what is known as 'viral marketing'. Marsden (2004) provides a good summary of the implications of the tipping point for marketers. He says that 'using the science of social epidemics, The Tipping Point explains the three simple principles that underpin the rapid spread of ideas, products and behaviours through a population'. He advises how marketers should help create a 'tipping point' for a new product or service, the moment when a domino effect is triggered and an epidemic of demand sweeps through a population like a highly contagious virus.

There are three main laws that are relevant from The Tipping Point:

Continue reading here: Downward pressure on price

Was this article helpful?