The first is relative advantage—the degree to which the innovation appears supe-
rior to existing products. The greater the perceived relative advantage of using a per-
sonal computer, say, in preparing income taxes and keeping financial records, the
more quickly personal computers will be adopted.
The second is compatibility—the degree to which the innovation matches the val-
ues and experiences of the individuals. Personal computers, for example, are highly
compatible with upper-middle-class lifestyles.
Third is complexity—the degree to which the innovation is relatively difficult to
understand or use. Personal computers are complex and will therefore take a longer
time to penetrate into home use.
Fourth is divisibility—the degree to which the innovation can be tried on a lim-
ited basis. The availability of rentals of personal computers with an option to buy in-
creases their rate of adoption.
Fifth is communicability—the degree to which the beneficial results of use are ob-
servable or describable to others. The fact that personal computers lend themselves
to demonstration and description helps them diffuse faster in the social system.
Other characteristics that influence the rate of adoption are cost, risk and uncer-
tainty, scientific credibility, and social approval. The new-product marketer has to re-
search all these factors and give the key ones maximum attention in designing the
new-product and marketing program.^46
Organizations Also Vary in Readiness to Adopt Innovations
The creator of a new teaching method would want to identify innovative schools. The
producer of a new piece of medical equipment would want to identify innovative hos-
pitals. Adoption is associated with variables in the organization’s environment (com-
munity progressiveness, community income), the organization itself (size, profits,
pressure to change), and the administrators (education level, age, sophistication).
Other forces come into play when trying to get a product adopted into organizations
that receive the bulk of their funding from the government, such as public schools.
A controversial or innovative product can be squelched by negative public opinion.
This was certainly the case with Christopher Whittle’s Channel One, a television sta-
tion for secondary schools.
■ Channel One Communications Inc. and K-III Communications Corporation
Do you remember Channel One? This was Christopher Whittle’s grand plan
to put free television sets in every secondary school. The catch? Teachers
would have to flick on a twelve-minute news broadcast every morning, in-
cluding two minutes of paid ads. Whittle came across as a slick huckster and
drew protests from parents and teachers who didn’t think commercials had
any place in the school. It also didn’t help that the original Channel One
newscast, with its thumping rock music, looked more like a setting for the
ads than for news. Whittle’s media empire crumbled in 1994. However, in an
interesting epilogue, and a testimony to the lessons to be learned from prod-
uct failure, another company has bought Channel One and managed to gain
adoption in enough schools to reach 8 million kids, 40 percent of the na-
tion’s teenagers.
K-III Communications Corporation listened to teachers and parents and
made news programming more serious. There is still paid advertising, but the
public furor had died down, and, as one principal says, “Even the commer-
cials let us talk about how images are constructed.” So maybe Whittle had
the right product idea; he just flubbed the execution.^47
chapter 11
Developing
New Market
Offerings^357SUMMARY
1.Once a company has segmented the market, chosen its target customer groups,
identified their needs, and determined its desired market positioning, it is ready to
develop and launch appropriate new products. Marketing should actively partici-
pate with other departments in every stage of new-product development.