New technologies often must cross the abyss from L7-L6 to L5-L3: i.e. they must create the markets into which they wish to sell their amazing new products.
No matter what their advantages, new high-tech products require an extraordinary mixture of business strategies to bridge the gap between facts/reality (L6/L7) and expedient conventionality (L5-L1):
● several of the lower-level strategies as well.
Phase 1: between product conception and reaching the market; &
Phase 2: between reaching the market and commercial success.
Benefits: Image and reputation of technological leadership-intense brand loyalty, and pre-emption of best-in-market position.
Disadvantage: Very risky. Why not be a free rider and wait for someone else to do the market creation work, then imitate more cheaply, and spend large sums on promotion with safety.
At the heart of any business strategy are satisfied customers willing to pay for the company’s products and services. The average enterprise loses 10%-20% of its customers each year and many others, while still loyal, restrict purchasing due to dissatisfaction.
Many strategies are claimed to target «customer satisfaction». Alternative terms like ‘customer delight’ and ‘customer intimacy’ are unsatisfactory. As with any general term, these may apply at all levels. In practice,
What must be grasped is that customers are focused upon as a group at L4, and as individuals at L5.
Research suggests that companies providing complete satisfaction do far better than those whose customers are merely satisfied. However, completeness is a substantial and costly challenge.
It depends primarily on:
properly supported by sensible:
● [#6] .
Power-centric leaders are tempted to equate line extension with product development and innovation. This is based on the conviction that it is possible to leverage the success of the company’s name or existing brands by applying them to other products.
This popular and expedient strategy regularly fails; it tends to weaken the original leading line through blurring customer perceptions and by cannibalising its market share.
Conclusion: There is never a short cut to great success: truly new products require their own complete and discrete developmental and marketing process, including a unique brand name.
that line extension can work in the following situations:
● If only a small volume of sales is sought.
● If the field is already crowded.
● If the advertising budget is small.
● If the product is a commodity.
● If direct selling is used.
Next section: Government interventions in the economy.
Originally posted: July 2009