Introduction of Software Products and Services Through "Public" Beta Launches

Amit Mehra () and Gireesh Shrimali ()
Additional contact information
Amit Mehra: Indian School of Business, Hyderabad, India, http://www.isb.edu
Gireesh Shrimali: Indian School of Business, Hyderabad, India, http://www.isb.edu

No 08-11, Working Papers from NET Institute

Abstract: Public “Beta” launches have become a preferred route of entry into the markets for new software products and web site based services. While beta testing of novel products is nothing new, typically such tests were done by experts within firm boundaries. What makes public beta testing so attractive to firms? By introducing semi-completed products in the market, the firm can target the early adopter population, who can then build the potential market through the word of mouth effect by the time the actual version of the product is launched. In addition, the information gathered through the usage of the public beta gives significant insights into customer preferences and consequently helps in building a better product. We build these marketing and product development implications in an analytical model to compare the different product introduction strategies like “skimming” or “penetration pricing” with beta launches. This analysis is done for products of branded and unbranded Web 2.0 companies like Google and Flickr etc. We also examine the impact of different monetization models like direct pricing and advertising on the beta launch strategy.

Keywords: beta; word of mouth effects; new product launch; exclusivity; externalities; Web 2.0; pricing; new product development; revenue models (search for similar items in EconPapers)
JEL-codes: D42 L10 L11 L20 M13 M21 M31 M37 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2008-09
New Economics Papers: this item is included in nep-mkt
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