Optimizing a Product’s Entry to a New Category

Not every product can enter the market at the ideal time. Here are three strategies for making the best of any timing.
Companies that launch innovative products in new industries need to understand the dynamics of new product categories. One of the elements of new categories is the name by which new product categories are known. Time it right, and you’re selling a “smartphone.” Time it wrong, and you’re trying to move a “PDA phone” or an “all in one device.”
Research by Fernando F. Suarez and Stine Grodal, both of Boston University School of Management, shows that names are no small matter. Their multiyear research finds that “a company’s labeling strategy can have important performance implications for products in nascent markets.”
“New industries are characterized by an early period of confusion and uncertainty about use and meaning, which brings about a proliferation of category labels that attempt to describe the new products,” write Suarez and Grodal in “Mastering the ‘Name Your Product Category’ Game,” in the Winter 2015 issue of MIT Sloan Management Review. “As an industry matures, the struggle between different category labels quiets down as one label gradually becomes dominant.”
Ideally, companies want to time their entry into a new industry to when a dominant category label emerges. The authors call companies who manage this ideal timing “Tempo Movers.”
But it’s not always possible to have perfect timing. A company might be pressured by investors to enter the market early. Or R