The role of the adoption network in the early market survival of innovations

Abstract

PurposeConsidering the strikingly high number of new products and services that are withdrawn from the market very soon after launch, the aim of this paper is to study how early market survival is affected by decisions regarding a particular launch tactic, i.e. the configuration of the adoption network through which the innovation is commercialized. The paper also investigates how the impact on early market survival of this launch tactics depends on the maturity of the technology underlying the new service.Design/methodology/approachThe conceptual model relating the variables “size of the adoption network”, “brand awareness of the organizations comprised in the adoption network”, “maturity of the underlying technology” and “early market survival” is tested in the empirical setting of the Italian mobile value added services (VAS) market, utilizing a longitudinal dataset which includes more than 28,000 new VAS launched between 2003 and 2007.FindingsThe paper shows that increasing the number of external organizations involved in the adoption network is a particularly effective tactical decision for new services based on very novel technologies, whereas building an adoption network that involves organizations with high brand awareness in the eyes of prospective customers positively impacts the early market survival of services relying on mature technologies.Originality/valueBesides providing practical insight to product and marketing managers seeking to maximize the chances of early survival of the services they are responsible for, the paper has interesting implications for launch decisions and diffusion of innovation research.