Marks, Brian and Mortensen, Wayne (2003) The failure of a wine closure innovation: A strategic Marketing Analysis. Working Paper. Victoria University, Melbourne, Australia.

Abstract

In the wine closure industry cork remains the dominant bottle sealing technology with a market share of around 90 per cent. Our research analyses the screw cap wine seal's development and original introduction within Australia in the 1970s. It identifies the fundamental reasons for its initial commercial failure. The Australian wine industry played a leading role in recognizing the commercial potential of a French prototype screw cap seal. Local piloting and testing occurred followed by a market launch. Unfortunately for screw cap change agents, the screw cap seal was largely a failure. Rogers' (1995) innovation diffusion model identifies several underlying factors responsible for the customer's rejection of the new screw cap seal. In particular, these were the failure to effectively demonstrate the relative advantage of the screw cap seal to consumers and to address the complexity and incompatibility of the seal with established user traditions. The industry was therefore unable to achieve a 'critical mass' of adoption. The additional application of Moore's (2001) adaptation of the technology adoption life cycle model reveals that the failure of the screw cap was also attributable to a lack of an effective industry marketing strategy that would overcome this identifiable consumer resistance. In particular, it lacked a strategy to manage the transition dynamics between the early and mainstream markets. We conclude that a theoretically informed understanding of the nature of the innovation and thus the adoption hurdles would have significantly aided the diffusion of this innovation.

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