Promoting Platform Takeoff and Self-Fulfilling Expectations: Field Experimental Evidence

A platform might have the potential to bring enormous value to its users. However, without a well-orchestrated launch strategy that coordinates a sufficient number of users onto the platform, this potential will not be realized. The theoretical literature predicts that one approach to coordinating platform take-off is to influence the market’s subjective focal expectations of the future installed base of users. This paper reports on a field experiment investigating the causal role of subjective expectations in the launch of a new platform venture, in which invitations to join a newly launched platform were sent to 16,349 individuals. The invitations included randomized statements regarding the size of the future expected installed base (along with disclosures of the current installed base). I find that simple, subjective, uncommitted, and relatively costless statements broadcasted by the platform with the goal of influencing market expectations were indeed able to influence platform takeoff and overcome an initial chicken-and-egg problem. These broadcasted subjective statements regarding future installed base had a larger influence on adoption rates than did disclosures of the true current installed base during early adoption. However, these subjective statements of expected future installed base ceased to have any effect once the true current installed base grew large. I discuss implication for the promotion, marketing, and evangelism of new platform ventures. This paper was accepted by Duncan Simester, marketing.

EXPRESS: Managing the Versioning Decision over an App’s Lifetime

The authors investigate app publisher’s decisions to offer the free, paid, or both versions of an app over an app’s lifetime, by taking into account the interplays between the demand for the free and paid versions and publishers’ consideration of future profit streams. Their empirical analyses are based on a comprehensive model of publishers’ versioning decisions calibrated on a dataset of 584 top-downloaded apps on Google Play. They find contemporaneous cannibalization but positive inter-temporal cross-effects on new users’ demand between the two versions. In addition, the free version’s active user base and in-app purchase and advertising revenues are reduced by the presence of a paid version, but not vice versa. Among the three options, offering the paid version first is the most common optimal launch strategy and applies to 40% of apps in the data. The evolutionary patterns of optimal versioning decisions vary by app category and are related to apps’ abilities to monetize different revenue sources. This study provides insights on how to strategically manage the versioning decision over an app’s lifetime and shows how publishers can make their free version apps more profitable via the deployment or elimination of the paid version.

A Survey on New Product Development, Market Orientation and Organizational Financial Performance: A Case Study on Selected Beer Factories in Ethiopia

Survey was conducted to investigate the association between market orientation, production process, product performance, organizational performance and financial performance. The purpose of this survey was to investigate relationships among market orientation, launch strategy, product performance, organizational performance, profitability and financial performance. Target populations were employees of selected Ethiopian beer factories BGI Ethiopia who are currently consuming the product; from which sample was determined through judgmental sampling method. Inquired data was collected via survey questionnaire, linear regression analysis was conducted to check the relationship among leading variable. Finally it was found that firms’ profitability and financial performance are being influenced by market orientation, launch strategy, product performance and organizational performance. Firms are recommended to focus on enhancing market orientation, launch strategy, product performance and organizational performance to boost profitability and financial performance.