The first to market consumer product does not always triumph

Citation

(2008), "The first to market consumer product does not always triumph", Journal of Consumer Marketing, Vol. 25 No. 3. https://doi.org/10.1108/jcm.2008.07725cag.001

The first to market consumer product does not always triumph

Article Type: Internet currency From: Journal of Consumer Marketing, Volume 25, Issue 3.

Edited by Dennis A. PittaUniversity of Baltimore

This Internet currency column focuses not on a single web site, but on developments in a single sector, the knowledge-sharing sector.

Ten or more years ago, Encyclopedia Britannica salespeople faced extinction. At the time, the venerable publisher of the highest quality encyclopedias was experimenting with a CD-based electronic product that exploited the advantages of the medium while maintaining the high quality standards of its print editions. Encyclopedia competitors included the always-dangerous Microsoft with its own brand, Encarta. Over time, standalone products gave way to online competitors or evolved to offer online access. The flagship product, Encyclopedia Britannica Online (EB Online) offers an excellent selection of knowledge at a cost. Employing the best of promotional practice, EB Online offers free trials of the material to serve as samples of quality. Using embedded online search terms in the text, EB Online’s web site content appears in the internet searches of ordinary users. Users who encounter the results, see the Encyclopedia Britannica brand and a small sample of an article. Usually the sample includes about 10 percent of the entire article and it seems to induce further action. To read the entire piece, users can activate a free trial subscription to read the full article. That free trial subscription provides EB Online with full customer contact information. It also provides the user with the flavor of the offerings and an idea of the final subscription cost. Overall, the implementation is professional and was effective.

Then, the fee-based online knowledge sources encountered the worst possible brand of competitors: those that gave away the product at no cost. The king of online, free encyclopedias, Wikipedia, gained instant acceptance and its content seeped into college term papers and even some academic papers by professionals.

In a marketing sense, Wikipedia offered the perfect combination of the Four-Ps bundled with excellent convenience, at least for those connected to the internet. Wikipedia provides a growing but substantial body of knowledge on a variety of subjects. In publishing, there is always a decision on the balance between brevity and breadth versus more extensive detail and depth. Encyclopedias have usually chosen a survey’s broad scope at the expense of detail. Wikipedia seems free of that choice. Many of its articles include commendable depth that aids students and interested parties in learning more than just the surface of topics. That level of detail is priceless since it conveys greater understanding.

The one issue of concern is the anonymous nature of authorship. Wikipedia’s Achilles heel is that it encourages anonymous users to post information on various topics collectively. Sometimes, when an expert posts, the information is accurate and offers insight not found in other sources. At other times, the information could potentially be inaccurate due, for example, to erroneous data sources. Seigenthaler’s (2005) opinion piece in USA Today reports on an entry which he indicates was inaccurate and intentionally damaging to his reputation.

The web site seems to be a good idea that has been implemented with flaws. One might view Wikipedia as a non-profit in a sort of 1970s flower power stage. It views anonymous authors as honorable, involved, expert, and valuable volunteers who post information for the common good rather than profit. Wikipedia’s business model is decidedly non-businesslike. For example, in the week before this column was written, the organization suffered an embarrassing slip. The person just appointed as its chief operating officer was found to have a flawed background with several criminal convictions (see Mullins, 2007). While Wikipedia claims that it suffered no harm to its finances, the mistake is revealing. A key issue is that Wikipedia offers no compensation or acknowledgement of authorship. That is a powerful disincentive to reputable and competent authors. Instead, it attracts possibly less skilled writers who otherwise would not be published. In addition, anonymity removes a powerful goad to accuracy. If no one knows who the author is, mistakes cannot be linked to an individual and no personal sanction is possible. Arguably, a for-profit business would anticipate the results of such decisions and take steps to minimize the issue.

Money is also a problem. In order to maintain and provide the knowledge base, the Wikipedia foundation requests donations. The level of donations it receives may be sufficient for operations, but it probably will not equal revenue from paid users or ads. Without funds, paying for articles is not an option.

Recently, Google decided to remedy the first to market problems inherent in Wikipedia and is testing its own knowledge-sharing product. Its service, Knol, is a term that has two meanings. First it refers to the web page on which the information resides. Second it also refers to the unit of knowledge. Knol emphasizes the rights of authors and supports them in publishing articles in their areas of expertise. Google will host the content and supply the tools for writing and editing. Moreover, the idea is to offer the possibility of payment for their contributions. These two changes seem to remedy the two major problems Wikipedia faces.

In a carefully managed early test, Knol has invited a selection of reputable authors to make contributions. Authors’ identities will be public on the Knol web site. Doing so should reduce the documented posting abuse and inaccuracies from which Wikipedia suffers. Perhaps more important for quality, authors have complete control over their content and Google protects the content from anonymous editing. Google believes that knowing who wrote an article will help users make better use of web content.

Knols can cover any topic. Individuals will be able to submit comments, questions and edit suggestions. In addition, they can write a review of a Knol. The Knol unit will also include references and links to additional information.

The monetary arrangement price tags are “face down” which simply means that they have not become public yet. However, the careful selection and clear authorship should boost quality. While the revenue levels are not yet public, Google has determined how it will generate revenue. Authors, not Google, will decide whether they will place an ad within their article. Presumably, popular high quality articles will generate traffic and both the author and Google will share the revenue. The arrangement helps assure that authors strive for accuracy, readability, and value. It also helps to insure that Google may cover its IT infrastructure and service costs. The model is clever and its revenue generation may deliver sustainability.

There still is one concern about Knol’s process model. While it does eliminate anonymity and provide financial incentives for quality, the concept lacks an important quality assurance element vital to knowledge providers such as newspapers and magazines. There are currently no editors to monitor and modify content. Relying on authors, even respected authors to deliver the best content may not always be effective. While it seems unlikely, the revenue incentive might tempt some authors to create content and minimize their own editing and rewriting.

Moreover, Google will not ask for any exclusivity of content. Knol will be available to any other search engine, such as Yahoo, MSN and Ask.com. In this case, wider exposure should drive more users to the content and increase potential ad revenue. At worst, Google’s Knol could fail to reach expectations and disappear. At best, Knol could generate considerable revenue from online advertising. At any rate, the service is another example of the advantages that follow-on products and services enjoy.

In our next issue, we will investigate other informative sites and invite readers to submit their favorite internet sites for our consideration.

Reader requests

Please forward all requests to review innovative internet sites to Dr Dennis Pitta, University of Baltimore, 1420 North Charles Street, Baltimore, MD 21201-5779, USA. Alternatively, please send e-mail to dpitta@ubalt.edu for prompt attention.