Lecture 9

Question 1

Innovations

Answer 1

An innovation is a product, service, attribute, or idea that is perceived as new by consumers within a market segment, and that has an effect on existing consumption patterns

Question 2

Resistance v Adoption

Answer 2

Resistance = low need for change (personality) or brand attachment

Adoption = promotion focused customers more likely to adopt whose priority is advancement and growth

Question 3

When consumers adopt innovation the high effort hierarchy of effects goes like..

Answer 3

Awareness –> Info search –> Attitude formed –>Trial –> Adoption

High effort – reduce the perceived risk

Question 4

When consumers adopt innovation the low effort hierarchy of effects goes like..

Answer 4

Awareness –> Trial –> Attitude formed –> Adoption

Low effort – encourage trail

Question 5

Diffusion and Product Life Cycle

Answer 5

Fads have short PLC

Fashion have lengthier PLC

Classics have lengthy PLC

Question 6

Characteristics of the innovation

Answer 6

perceived value - the higher the value the higher the adoption and diffusion

Perceived benefits – high perceived relative advantage

Perceived costs – low actual purchase cost, low switching costs

Perceived Value = Perceived Benefits – Perceived costs

Question 7

Social Relevance

Answer 7

• Observability
• Social value
• Marketing implications – overcome observability problems with extensive promotion and advertising, enhance observability with packaging and promotions, tie the product use with potential social approval