Product Life Cycle and Diffusion Flashcards
See Product Lifetime Diagram!
product, competition, etc. Introduction Growth Maturity Decline
What is this example?
Mobile and Ofo Bike came out first. Then lots of competition piled up and died
PLC Product Life Cycle Competition Line
Decline Stage
Sales and profit decline
no new customers or firm investments
usually due to new tech
Strategies for how to tackle the decline stage:
1 withdraw and divest
2 harvest
3 niche
4 market leadership
Diffusion
see diffusion diagram
Once you get to 16%, to cross the chasm you have to change your messaging and media strategy to from scarcity to social proof to get through the chasm fast and to the tipping point
innovators early adopters early majority late majority late mass
Diffusion S Curve
Cumulative Adoption Diffusion Model
Bass Diffusion Model
Exponential Diffusion Model
Skim vs Penetration
Skim = start slow then grow
- follows the diffusion of innovation framework
- extracts maximum value from most interested customer
- big money comes later
Penetration: big bang - mass market from beginning - number new adopters peaks early - requires significant resources can yield high ROI
Cumulative adoption
see the diagram
users accumulate over time in S Curve innovators early adopters early majority late majority late mass
What is this example?
people who adopt and become users hybrid seed corn in Iowa increase in s shape. New adopters increase then decrease as product is mature
Diffusion
Cumulative Adoption S Curve
Bass Diffusion Model
Shows new adopters from innovators and imitators and new adopters
Exponential Diffusion Curve
Shows % First year Tryers
increases and then remains constant
Why things catch on? by Jonah Berger
STEPPS
STEPPS
Social Currency Triggers Emotion Public Practical Value Stories
What is this example?
If you search turkey in google trends, it was searched most often during thanksgivings
STEPPS
Triggers
How do you decide whether to skim or penetrate?
ACCORD
1 Relative Advantage - what it replaces 2 Compatibility - with current behaviors 3 Complexity - of communicating benefits 4 Observability- of product benefit 5 Risk - of product failure 6 Divisibility - trialbility
What is this example?
Swiffer should penetrate because it is easy to see how it has relative advantage, compatibility with peoples behaviors, not complex to show what it does, observability of its benefit, not so risky, easy to trial divisible
Medicine for Botox is more of a skim because there are some risks and not that easy to observe the benefit or communicate it
ACCORD
skim or penetrate
Skim Tactics
Price: High
Place: Selective
Product: Complex ACCORD
Promotion: Selective, focus on education
