Full citation

Chialin, C., & Noori, H. (2005). Time-to-Value, Customer Learning, and the Development of Breakthrough Products. International Journal of Product Development, 1(3-4), 261-279.

Format: Peer-reviewed article

Type: Experience

Experience level of reader: Fundamental

Annotation: This paper uses supporting cases to describe the impacts of learning-time on the success of breakthrough products in the marketplace. The authors determine that the product's cost must not exceed the combined value of the device itself and those benefits that will be realized by the end user.

Setting(s) to which the reported activities/findings are relevant: Large business, Small business (less than 500 employees), University

Knowledge user(s) to whom the piece of literature may be relevant: Manufacturers, Researchers

Knowledge user level addressed by the literature: Individual

This article uses the Commercial Devices and Services version of the NtK Model

Primary Findings

Primary Measures:

  • Manufacturers should carefully analyze and integrate the input and knowledge from both the potential early and late adopters, and then design and adjust product features accordingly.
    Case analysis
    Occurrence of finding within the model: Step 4.11, Step 2.2, Step 1.1
  • In developing a breakthrough product, a manufacturer should try to adjust the product features, learning easiness, and even the purchase price according to customer patience, learning cost and technology readiness.
    Case analysis
    Occurrence of finding within the model: Step 4.12
  • Customer utility is determined by the following factors: the realized value from learning, the amount of time a customer spends in learning, the price of the product, the learning cost, and the refund that a customer can receive from a returned product.
    Case analysis
    Occurrence of finding within the model: Tip 7.30

Primary Method:

The manufacturer can provide free users' manuals or online access to tutoring programs in order to reduce the learning cost incurred by customers.
Case analysis
Occurrence of finding within the model: Step 8.3

Primary Tips:

  • A breakthrough product should not be priced higher than the net value received by a customer at the point when they will stop the learning process.
    Case analysis
    Occurrence of finding within the model: Tip 7.30
  • For incremental products, manufacturers typically change a price equal to the total value that the customer receives from a product. However, with breakthrough products, pricing should also depend on how long a customer will stay in the learning process and how much money or effort she needs to invest in learning.
    Case analysis
    Occurrence of finding within the model: Tip 7.30
  • The return period (for customers to get money back) should be long enough for customers to realize the value of a breakthrough product, or else they may simply return the product for a refund if the purchase price and learning cost are not justified by the value realized within the return period.
    Case analysis
    Occurrence of finding within the model: Tip 7.28