Companies must determine how they determine the demand and the size of the market for a product that is yet to exist or exists but is not available in the market. For a product that is not fully developed and the reactions and feedback from the consumers are unclear, three assessment approaches could be used for future markets and emerging technologies: Diffusion and adoption, Exploration and Learning and Triangulation and Insight. The emerging technology was on virtual reality and augmented reality, all who are yet to be available in large scale in the market. The best assessment approach for such technology is the diffusion and adoption approach. The approach explains how products can diffuse themselves in the market and also the rate of adoption that is portrayed by the consumers. Specific characteristics define how fast a product is diffused into the market. The first is the perceived advantages of the new product compared to the already existing or alternative products. In the case of virtual reality, it is easy for individuals to have control over the stimulus presentation compared to other options (Tidd & Bessant, 2018). The technology can create stimuli in three dimensions and enable a real feel of complex scenarios using sensory elements; something technology has not done before.
The risk also affects how products diffuse themselves because consumers are uncertain about how a product will perform. The barriers to adoption hinder consumers from adopting a product sooner. In the case of virtual reality and augmented reality technologies, the cost of the initial investment might hinder consumers from adopting the product (Day, 2000). The opportunity to try and learn also affects how the product is adopted. It also enables the consumer to have more insight into the product before making a purchase decision. The virtual and augmented reality technology creates opportunities to learn and try. The technologies are available in public places where members of the public and potential consumers could have a try of the technology and decide whether it meets their technological needs or not. The barriers to adopting technology are few as the cost is the primary constraint. The perceived advantages of technology over other already existing technologies are the main drivers of adoption. Without substantial advantage over the competition, it would be hard for consumers to invest in new technology.
The virtual reality (VR) and augmented reality (AR) has some key attributes that make it stand out among other technologies. The product has essential attributes in that, just like many other technologies, it allows communication to take place and enable the transfer of information from one place or individual to another. The discriminator attributes in the technology make it unique and distinguish the technology from others in the market (De Medeiros & Ribeiro, 2017, p. 244). VR, for instance, creates a virtual world that is independent of the real world. The technology also allows the immersion of the consumer into the virtual world, cutting them from the real world on a sensory level. The technology is also interactive as it involves the use of the sensory capabilities of the consumer. The technology could also be used for multiple purposes such as education or leisure, among others. The emotional experience and high sensory impact that the technology has on the consumers give it the energizer attributes in a market dominated by substitute technologies.
Various technological barriers would affect VR as an emerging technology. As discussed earlier, the costs constitute a significant barrier in that technology is expensive due to the type of hardware and software used to make the technology. VR and AR technologies are not yet made in large scale, and the demand for the technology is not yet established; hence the high initial cost of purchase and set up. Another constrain that is associated with the technology is the requirement to download more applications for the technology to take off. The adoption of the technology is also low due to the bulkiness of the equipment, especially the headset gear, which lack sufficient technological performance. Laurel et al. did the research, 2019 shows that technology has barriers that affect its adoption. Consumers want convenience when it comes to technology, especially in an era of micro gadgets. Their research was based on feedback through social media from consumers who use VR or AR technology.
The VR and AR market is segmented by the type of hardware or software used and also by the end-user. The latter category of segmentation could be divided into niche markets such as gaming, education or healthcare. In the gaming, segment consumers relate to the energizer attributes of the products. VR and AR offer gamers attributes that other brands in the gaming industry cannot offer. Unlike gaming on a computer screen, gamers are immersed in the virtual world, and they can use their sensory inputs as part of the gaming process, making their experiences better. The healthcare segment relates to the discrimination attributes as AR and VR technologies offer attributes that are distinguishable from products offered by competitors. A good example is the education of surgeons and healthcare professionals. They can move from a dwelling on theory and immerse into a ‘reality’ in the virtual world of medicine using AR and VR technologies.
VR and AR products create a competitive advantage through product attributes. They might be higher in price compared to competitors, but the high price is justified by the benefits and services obtained from using emerging technology. The technology creates a reality to the targeted market segments, primarily the gaming and the healthcare segment. No other technology uses the sensory attributes of consumers or immerses the consumers into a virtual reality of things. The VR and AR technologies, therefore, have a competitive advantage against other technologies.
Forces of External Environment
Various forces of the external environment are likely to influence the organization’s commercialization strategy for technological products. The first factor is the socio-cultural factors which influence the perception that the society has toward the technology (Shtal et al., 2018). Many consumers fear that technology is addictive and that it could be used for purposes that are morally wrong within society. The factors, therefore, might hinder the company from commercializing the product in a proper manner. Government regulation under the legal environment might also influence the commercialization of the product. If the product is deemed to have negative impacts on public health, it is likely to be fought by the legal arm of the government. Economic factors determine the purchasing power of the consumer. A weak economy means less disposable income, meaning consumers will have less to spend on luxury technologies. The above, therefore, might influence the organization’s product commercialization strategy.