Transcript Document

Chapter Six
MarCom’s Role in
Facilitating Product
Adoption
Chapter Six Objectives
• Appreciate the role of marketing
communications in facilitating the
introduction of new products
• Explain the innovation-related
characteristics that influence
consumers’ adoption of new products
• Describe the diffusion process and the
various groups of adopters
Chapter Six Objectives
• Understand efforts employed by
marketing communicators to manage
the diffusion process
• Appreciate the role of word-of-mouth
communications in facilitating new
product adoption
• Use “buzz” to heighten the rate of
product adoption
New Products and
Marketing Communication
• Introducing new products is essential
for most companies’ success and longterm growth
• Product failure-rate estimated 35-45%
• Marketing communications facilitate
successful new product introductions
and reduce the product failure rate
New-Product Adoption Process Model
Free
Samples
Coupons
Distribution
Product
Satisfaction
Awareness
Trier
Class
Repeater
Class
Class
Advertising
Price
New-Product Adoption Process Model
Three stages of adopting a new product
Awareness Class
Trier Class
Repeater Class
Introduction of Sony’s New Camera
New Sony camera
and the adoption
process
New-Product Adoption Process Model
Awareness Class
Free
Samples
Coupons
Advertising
Distribution
• Variables: free samples, coupons,
advertising, and distribution
• Successful introduction of new
products requires an effective
advertising campaign, widespread
product distribution, and extensive
couponing and sampling
New-Product Adoption Process Model
Trier Class
Coupons
Distribution
Price
• Variables: coupons, distribution, and price
• Once the consumers becomes aware
of a new product, there is an increased
probability that they will actually try the
new offering
New-Product Adoption Process Model
Repeater Class
Advertising
Price
Distribution
Product
Satisfaction
• Variables: advertising, price, distribution
and product satisfaction
• Consumers repeat the purchase if
advertising reminds them about the
brand, if the price is reasonable, if the
brand is accessible in retail outlets,
and if product quality is satisfactory
Adoption Process
Relative
Advantage
Innovation
Related
Characteristics
Compatibility
Observability
Trialability
Complexity
Relative Advantage
• A product innovation is perceived as
better than existing alternatives
• Positively correlated with an
innovation’s adoption rate
• Exist when a new product offers:
» Better performance, increased comfort,
saving in time and effort, or immediacy
of reward
Relative Advantage
An illustration of
relative advantage
Relative Advantage
An illustration of
relative advantage
Relative Advantage
Another
illustration of
relative advantage
Relative Advantage
Advertising a
competitors’
relative
disadvantages
Relative Advantage
An illustration of
relative advantage
Relative Advantage
Another illustration
of relative advantage
Relative Advantage
Relative
advantage
of the U.S.
mail service
Compatibility
• An innovation is perceived to fit into
a person’s way of doing things
• The greater compatibility, the more
rapid a product’s rate of adoption
• Overcome perception of
incompatibility through heavy
advertising to persuade consumers
Compatibility
Compatibility
Compatibility
A compatibility
problem
Compatibility
An effort to regain compatibility
Complexity
• An innovation’s degree of perceived
difficulty
• The more difficult, the slower the rate
of adoption
Complexity
Offsetting perceived
product complexity
Trialability
• An innovation can be used on a
limited basis prior to making a full
blown commitment
• The trial experience serves to reduce
the risk of a consumer’s being
dissatisfied with a product after
having permanently committed to it
through outright purchase
Adoption Process
Trialability
Observability
• The product user or other people can
observe the positive effects of new
product usage
• Higher the visibility, more rapid the
adoption rate
Observability
High Visibility
Diffusion Process
Mean Time
of
issue
of
Adoption
• Concerned with the broader
how an innovation is communicated
and adopted throughout the
Innovators
(2.5%)
marketplace
Early
Late
Majority
Majorityout
• The
process
of spreading
Early
(34%)
(34%)
Adopters categories
Laggards
• Adopter
(13.5%)
» Five different type of consumers
» Normal distribution
(16%)
The Diffusion Process
Mean Time
of
Adoption
Innovators
(2.5%)
Early
Adopters
(13.5%)
Early
Majority
(34%)
Late
Majority
(34%)
Laggards
(16%)
Diffusion Process
Innovators
• 2-3%, the first to accept a new idea or
product
• Venturesome and willing to take risks
• Cosmopolites: willing to seek social
relationships outside of their local peer
group
• Rely heavily on impersonal information
sources
Diffusion Process
Early Adopters
• 13%, the second to adopt an innovation
• Localites: well integrated within the
community and respected by friends
• Often sought for advice and information
about new products from peers
• Opinion leaders primarily come from the
early adopter group
Diffusion Process
Early Majority
• 34%, adopt the product prior to the mean
time of adoption
• Deliberate and cautious
• Spend more time in the innovation
decision process
• Slightly above average in education and
social status
Diffusion Process
Late Majority
• 34%, just following the average adoption
time
• Skepticism
• Peers are the primary source of new ideas
• Make little use of mass media
• Below average in education, income and
social status
Diffusion Process
Laggards
• 16%, the final to adopt an innovation
• Bound in tradition
• “It it was good enough for my parents, it’s
good enough for me.”
• Closely tied to local community and have
limited contact with the mass media
Managing the Diffusion Process
Objectives
1. Secure sales quickly
- rapid takeoff
2. Achieve rapid acceleration
- rapid acceleration
3. Secure maximum sales potential
- maximum penetration
4. Maintain sales as long as possible
- long-run franchise
Desired and Typical
Diffusion Patterns
100
Potential Adopters
90
80
70
“Desired” Pattern
60
50
40
Introduction
“Typical” Pattern
30
20
10
0
Time of Adoption
Managing the Diffusion Process
Advertisement
of Clomicalm
Managing the Diffusion Process
Rapid takeoff can be facilitated by:
• Aggressive sales force to secure trade
support for new products
• Intensive advertising to create awareness
• Sufficient sales promotion activity to
generate trial-purchase behavior
Managing the Diffusion Process
Rapid acceleration accomplished by:
• Ensuring quality product that will promote
positive word-of-mouth
• Continuing to advertise heavily to reach
later adopter groups
• Sales force provides reseller support
• Using sales promotion creatively to
encourage repeat-purchase behavior
Managing the Diffusion Process
Maximum penetration approached by:
• Continuing the same strategies that
stimulated rapid acceleration
• Revise the product and advertising
strategies to appeal to the needs of later
adopters
Managing the Diffusion Process
Long-run franchise maintained by:
• Old product continues to meet the
market’s needs
• Distribution suitable to reach the market
• Advertising continued to remind the
market about the product
Stimulating
Word of Mouth Influence
• Impersonal sources: information
received from television, magazines, the
Internet, and other mass-media sources
• Personal sources: word-of-mouth
influence from friends, acquaintances,
and from business associates
Opinion Leader
• A person who frequently influences
other individuals’ attitudes or overt
behavior
• An informer, persuader, and confirmer
• Influence is typically limited to one or
several consumption topics
• Influence moves horizontally through a
social class
Opinion Leaders
Characteristics
•
•
•
•
•
More cosmopolitan
More gregarious
Slightly higher socioeconomics status
Generally more innovative
Willing to act differently
Opinion Leaders
Market Mavens
Individuals who have information about
many kinds of products, places to shop,
and other facets of markets, and initiate
discussions with consumers and respond
to requests from customers from market
information
Stimulating
Word of Mouth Influence
• Positive word-of-mouth communication
is critical in the success of a new
product of service
• Unfavorable WOM have devastating
effects because consumers seem to
place more weight on negative
information in making evaluations
Creating “Buzz”
• Creating and epidemic
• Igniting explosive
self-generated demand