product adoption/diffusion and marketing communications
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Product Adoption/Diffusion and Marketing Communications. When are each of the elements of the promotions mix most useful?. Innovation. An idea, product or service that an individual perceives to be new. Remember - in marketing perception is the key! - PowerPoint PPT PresentationTRANSCRIPT
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Product Adoption/Diffusion and Marketing Communications
When are each of the elements of the promotions mix most useful?
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Innovation An idea, product or
service that an individual perceives to be new.– Remember - in
marketing perception is the key!
Degree of Newness - reflects unique contribution of innovations
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Degree of Newness Continuous Innovations
– minor change from existing products– limited impact on consumption patterns
Discontinuous– requires substantial relearning and fundamental
alterations of basic consumption patterns Dynamically Continuous
– require some disruptions but fundamental delivered utility the same
CD players, cell phones
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What is a “new” product? Breakthrough
Innovations– computers, phone
Pioneering Innovations– PC, CD player
Adaptive Innovations– dryer sheets
Imitative New Products - clones
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Product Innovation essential for long-term survival products become obsolete and replacements
must be developed i.e., typewriter for today’s more critical consumer -
products need to be truly innovative vs. marginally different
environmental factors have an increasingly important role
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Promotions and Its Role Awareness Class
– free samples, coupons, advertising and distribution (i.e., convenience and pop displays)
Trier Class– price, coupons distribution,
demonstrations
Repeater Class – advertising, price,
distribution, satisfaction
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Product Adoption and Diffusion Process Adoption Process
– decision making activity of an individual through which a new product is accepted
Diffusion of a New Product– process by which the innovation is
spread through a social system over time
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Adoption Process Knowledge - Awareness Persuasion - Interest and Liking Decision - Purchase Action (trial) Implementation - Product Usage
(adoption) Confirmation - Satisfaction/Loyalty
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Five Characteristics of Innovation Relative Advantage - superior Compatibility - consistent with
experience and values Complexity - difficulty in understanding Communicability - observable use and
communicability to others Trialability - accessible for trial use
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5 Categories of Adopters/Diffusion Process Innovators - 3% Opinion
Leaders Early Adopters - 13%
“Keeping up with the Jones”
Early Majority - 34% Avg shopper
Late Majority - 34% Skeptics
Laggards - 16% My Mom
0 20 40
EarlyMaj
Laggards Percentage
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The Product Life Cycle Biological Analogy Reflects Life Span
of the Products Intermingle the
PLC, Diffusion of Innovation, Adoption and Promotion!
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The Product Life Cycle Introduction
– primary demand stimulation– high percentage of product failures– operations costs are high– distribution limited– net losses expected
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The PLC - Growth sales volume rises rapidly new consumers make initial purchases early buyers repurchase sales and profit begin to rapidly competitors enter market prices may fall economies of scale begin to occur begin to stimulate brand demand
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PLC - Maturity Industry sales
continue to grow in early part of stage
sales increase at a decreasing rate
price competition intensifies
profits decline competitors dropout
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PLC - Decline innovation may bring about declining
demand consumers’ preferences shift away from
the product offerings cost control becomes critical competitors withdraw promotional efforts reduced or withdrawn
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How Do Marketing Strategies Change Across the PLC?
expanding the product line – Campbell’s soups offering single
serving sizes, Ivory intros shampoo find new uses for the product
– baking soda find new markets
– tobacco companies going overseas
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BCG Matrix
Cash Flow Model Market Share/Market Growth are the axes
Hi Growth/Hi Share
STAR
Low Growth/Hi Share
CASH COW
Hi Growth/Low Share
Question Mark/Problem Child
Low Growth/Low Share
DOG
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When is PR Important? Helpful to Stimulate
Interest Diffuse Information
About New Products Informs Investors Generates
Competitive Response Gets the Cheerleaders
Going!
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Out-of-Home
Oldest Form of Advertising - often referred to as ‘outdoor advertising’
Delivery Modes include: billboards, blimps, transit ads, etc.
Expenditures are approaching $2 billion
Can be off premises or on premises
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Out-of-Home Positives Reach and Frequency Geographic
Flexibility Low CPM Easy Brand ID Purchase Reminder
at the best times!– Hungry - exit now!
Come major inMarketing!!!!!
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Billboards Types
– Poster Panels vs. Painted Bulletins
Panels are silk screened - ranging in size from 6’2” by 12’’2” to 12’3” by 24’6”
Painteds- directly painted and leased for 1-3 years
Pros of Billboards– Low CPM– Can be a last
reminder for products like fast food, shopping venues, etc.
– Reach and Frequency– Sell based on
Showings %exposed
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Out-of-Home Negatives
nonselectivity minimal exposure time - billboards difficulty in measuring audience environmental concerns limited use of copy
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Purchasing Out of Home
Plants– Firms that own billboards– Sell based on ‘showings’
#50 means 50% of population of area is exposed each day to signage
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Point of Purchase Displays (POP)
Attract bargain hunters and variety seekers Spending $17 billion a year Range from permanent displays to end of
aisle Attract attention, allow information to be
gathered Make shopping easier … but can become
easily ignored