Global Diffusion of a New Product Class: A Study of New World Wine

<p>Understanding the drivers of product diffusion in global markets is a key determinant of success in marketing a product internationally. Factors such as national culture that are specific to a particular country market play a significant role in determining the speed of diffusion in that market. Examining the diffusion of New World wine provides an opportunity to test existing theories in the context of a new product class innovation as opposed to a new product innovation (as is the case in the existing literature). In addition, the study of diffusion of a new product class provides an opportunity to measure diffusion rates, within global markets, against a key explanatory variable in diffusion theory, 'prior experience of a previously introduced idea'. This is due to the fact that global markets have had previous experience with other wine product classes, before the advent of New World wine. This explanatory variable is an important part of classic diffusion theory however it has not been tested in a cross national sense. Through the study of 47 countries/regions that encompasses all countries in the world (at time of publication), the research found a strong negative correlation between 'prior experience of a previously introduced idea' and market share growth of New World wine across global markets. The author suggests that a key potential factor for this finding relates to the existence of a quality status hierarchy in existence in countries with higher levels of prior experience, resulting in a lower quality perception for a new product class in this market, when compared to a market that does not have an existing status hierarchy in place due to lower prior experience with a similar product. This concept potentially extends the cross national diffusion literature. In addition this research may provide important implications for managers in developing global marketing strategies.</p>