NISHIDH VILAS LAD – 2013176NITESH BERIWAL – 2013177NITESH SINGH PATEL – 2013178NITIN BORATWAR – 2013179NITIN KUMAR SHUKLA – 2013180NOOPUR MANDHYAN - 2013181

EAGER SELLERS STONY BUYERS: Understanding the Psychology of New-Product Adoption

Many innovations fail because consumers irrationally overvalue the old and companies irrationally overvalue the new By JOHN T. GOURVILLEText Reference: Source: Harvard Business Review

Learning Objectives

Introduction Psychology of gains and losses Building a behavioural framework Balancing products and behaviour

changes Accepting resistance Minimising resistance

Potentially Successful?

Webvan Online Grocery business

Segway Scooters

Colgate’s kitchen entrees

DIVX

Questions

Consumer’s perspective

Producer’s perspective

The Psychology of Gains and Losses

Subjective or perceived value rather than objective

Evaluation relative to a reference point Improvement as gains and shortcomings as

losses Loss aversion

Building a behavioral framework It is built around 3 entities:

BUILDING A BEHAVIOURAL FRAMEWORK

NEW PRODUCT

OR TECHNOLOG

YCHANGE

CONSUMER WHO MUST ADOPT IT

COMPANY THAT

DESIGNS IT

Innovation and behaviour change

BALANCING PRODUCT AND BEHAVIOR CHANGES

1.Easy Sells

2.Sure Failures

3.Long hauls

4.Smash hits

BALANCING PRODUCT AND BEHAVIOR CHANGES

Accepting Resistance

Be Patient:

Strive for 10x Improvement:

Contd.

Eliminate the Old:

Seek out the Unendowed:

MINIMIZING RESISTANCE

Difficult to get 10X Improvements

Make behaviorally compatible products

Find believers

The Toyota Way of Minimizing Resistance

Apache RTR 180 & It’s Mudguard Innovation

Conclusion

Businesses need to understand the psyche of consumers

Quick response to consumer behavior

Without it, the innovations will continue to fail