Market Inertia Kills New Products

A small publicly traded company, Cell Robotics International, has developed a laser device to replace the steel lancet diabetics must use to take blood samples several times a day. Their product has been through clinical testing, has been featured in several publications for diabetic patients and touted as a safer and less painful way to take blood samples than the market alternative steel lancet.

Although the company has had over $35 million of investment in this and other product lines and good media coverage, they reported a little over $20,000 in sales for the first quarter of this year. Why isn’t the market rushing to embrace this new safer and less painful alternative product? We call this market inertia.

Market Inertia: Consumers tend to do what they have been doing unless acted upon by an overwhelming external force. All of us that have introduced revolutionary new products face the same dilemma. The customers refuse to change to our better market alternative product.

In the case of Cell Robotics International there are several possible reasons for this market inertia:

• Does the diabetic patient want to deal with the allegedly safer and less painful product that is not covered by their health insurance benefits?

• Does the diabetic patient change any part of their test procedure without a doctor recommending it?

• Can a doctor recommend any new procedure if it costs more and does not offer a significant reduction in risk to their patient’s health?

I look at lots of "neat new ideas" every year and fall in love with new technology faster than most. My first question before investing in a new technology-based product is whether it is significantly advantaged enough to overcome the market inertia of the existing products.