New Products Flashcards
state the different definitions of innovation. which one will this lecture use?
- firm-oriented innovation (something novel to the firm)
- market-oriented (something novel to the market)
- consumer-oriented (something novel to the consumer)
- product-oriented (something that is novel about the product, because of what we need to change our behaviour) - we’ll use this one
is success of innovations guaranteed?
definitely not. imagine colgate beef lasagna
80% to 90% of product innovations fail
why are innovations important for companies? (4)
- chaning consumer needs and tastes
- new technologies (shortening product life-cycle)
- increased competition
- store brands
def the diffusion process
the process by which the acceptance of an innovation is spread by communication to members of social system (target market) over a period of time
state the difference between diffusion and adoption (EXAM)
diffusion = macro level adoption = individual level
what influences the diffusion process? (4)
- characterisitcs of innovation (radicality vs graduality)
- target consumers (adopters or first-movers)
- type of interaction between consumers
- marketing effort (input) of the company
state three types of innovation
which 2 Qs help us decide?
(EXAM - provide arguments WHY you decide the way you do)
- continuous (same usage, no tech)
- dynamically continuous (same usage, new tech)
- discontinuous (new usage, new tech)
- is the usage any different?
- is it tech-ly advance?
state 3 characteristics of continuous innovation
+ example
+ marketing implications
- symbolic innovation (different colours)
- little or no change in tech
- has the least disruptive influence on established usage patterns
example: low-sugar version
marketing: creating awareness (to ensure the greatest dissemination)
state 3 characteristics of dynamically continuous innovation
+ example
+ marketing implications
- still doesn’t disrupt buying behaviour and usage patterns
- some tech advances
- may involve modification of an existing product
example: hybrid car
marketing: advertise benefits, emphasize main differences with other products
state 3 characteristics of discontinuous innovation
+ example
+ marketing implications
- learning new usage patterns
- pioneering product
- major tech advance
example: electric car
implications: educate consumers and teach them how to use it
state the adopted categories and their % of consumers
+ who defined them?
+ what’s the key characteristic of these categories?
Rogers 1. innovators (2.5%) 2. early adopters (13.5%) 3. early majority (34%) 4. late majority (34%) 5. laggards (16%) they are product-specific (depending on the product category) - consumers vary in ther willingness to try new products
state 4 characteristics of innovators
+ sources of information
+ marketing implications
- taking risks
- higher status / income
- younger, educated
- they socialise with other innovators
formal sources (impersonal)
marketing: low loyalty (bc they’re open to innovation) -> emphasize benefits and facts
state 2 characteristics of first buyers
+ sources of information
+ marketing implications
- opinion leaders
- they set trends
sources are mass media
marketing: frequent users -> emphasize facts
state 2 characteristics of early majority
+ sources of information
+ marketing implications
- above average in income and status
- thorough think through
sources are first buyers, ads
marketing: comparing brands -> use arguments, celebrities
state 3 characteristics of late majority
+ sources of information
+ marketing implications
- have no money
- purchasing bc of saving time
- below average status
source: word of mouth, social norms
marketing: message that emphasises adaptation to social norms
state 4 characteristics of laggards
+ sources of information
+ marketing implications
- lowest income and social status
- independent
- ignoring social norms
- tradition is important
source: tradition
marketing: relate to existing products, emphasise higher quality
state 3 types of diffusion (temporal aspect)
- slow diffusion (most entrants are in the ‘end of time’)
- typical diffusion (most entrants are in the ‘middle of time’)
- rapid diffusion (most entrants enter at the ‘start of time’)
which characteristics influence the diffusion? (10)
- type of target segment (traditional vs innovators)
- type of decision (individual vs collective - latter is slower)
- marketing efforts
- felt need (by consumers)
- compatibility of product and lifestyle
- relative advantage (higher than the ones we have now)
- complexity (of the product - the higher, the slower the diffusion)
- observability (the amount of ppl that see the product - the higher, the faster the diffusion)
- risk perception (by the consumer)
- trialability (a free trial available)
def tryvertising
= try-advertising = trialability in practice
e.g. the look inside on amazon
state a marketing strategy for each characteristic of diffusion + the barrier that exists there
- type of group
- type of decision
- marketing efforts
- felt need
- compatibility
- relative advantage
- complexity
- observability
- trialability
- risk perception
- conservative target group. marketing: find other target groups, focus on the innovators within conservatives.
- collective decision-making. marketing: select media that reaches all of them, provide assistance for resolving conflicts
- limited marketing efforts. marketing: focus on innovators in the group, advertise in the more susceptible region
- weak needs. marketing: increase advertising, emphasize benefits.
- conflict product-lifestyle. marketing: emphasize the attributes that are compatible.
- small relative advantage. marketing: low price, or change product to increase advantage.
- high complexity of the product. marketing: distributions with high quality service, good sales staff, product demonstrations.
- low observability. marketing: increase marketing efforts, advertising of lifestyle.
- difficult trialabiliy. marketing: free trials, samples for first buyers, quality retailers.
- high risk perceptions. marketing: demonstrate success of other users, use of opinion leaders, use credible sponsors, warranty.
def word of mouth (WOM)
Informal exchange of views, thoughts and ideas between two or more consumers, none of which is related to ‘marketing resources’
def word of mouth (WOM)
Informal exchange of views, thoughts and ideas between two or more consumers, none of which is related to ‘marketing resources’
def eWOM
word of mouth in online environments
why does WOM have such a strong influence?
- reliability (we know they are not paid)
- trustworthiness (trust in individuals is higher than in institiutions)
- social pressure (we want to comply with the group)
