Download Network Products in Networked Markets

New Orders
Customer Adoption a la Moore*
Who influences whom?
Who references whom?
Who buys for what reason?
What is the whole product?
What is the minimum product?
Which partner helps bridge the gap?
What is the minimum customer base?
What are optimal price points?
Moore’s Chasm
Visionaries
Pragmatists
Skeptics
Conservatives
Time
Innovators/
Early Adopters
Early Majority
* Moore (1991), Crossing the Chasm
Late Majority
Laggards
Network Products in Networked
Markets
The last decade has witnessed a shift from a focus on the value created by
a single product to an examination of the value created by networks of
products (product ecosystems or NETWORKED PRODUCT).
Network products emerge at the intersection of three types of networks:



User network
Complements network
Producer network
Key Claims:
Any or all of these networks add value or enhance the attractiveness of the
associated focal product.
Consumers allocate resources among competing products based on the
perceived value added of any or all of these networks.
The Networked Product:
Complements network
Services that permit consumption
Focal Product
User network
Other consumers
Producer network
Other companies producing the same or
similar product or service
Linux as Networked Product:
Complements network
•Application developers
•Maintenance and Repair
•Service Companies
Ex.: Linux
Operating System
User network
number of other
companies that are using
Linux (moderated by size,
reputation, industry, etc. of
these companies)
Producer network
Other companies producing the same or
similar product or service
Remember:
If you are dealing with a focal product that is a
networked product


Consumers allocate resources not only based on the
objective and perceived quality of the focal product
but based on the perceived value added to the
focal product by the networks it has.
Marketing of a networked product therefore is no
longer limited to developing a marketing mix and a
strategic position for the focal product. Rather,
marketing needs to support network strength as
well.
Examples?
Complements network
Services that permit consumption
Focal Product
User network
Other consumers
Producer network
Video game market
Satellite Radio
HDTV
Electric Cars?
Other companies producing the same or
similar product or service