Product Life Cycle and Diffusion Flashcards

1
Q

See Product Lifetime Diagram!

A
product, competition, etc.
Introduction
Growth
Maturity
Decline
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2
Q

What is this example?

Mobile and Ofo Bike came out first. Then lots of competition piled up and died

A

PLC Product Life Cycle Competition Line

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3
Q

Decline Stage

A

Sales and profit decline
no new customers or firm investments
usually due to new tech

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4
Q

Strategies for how to tackle the decline stage:

A

1 withdraw and divest
2 harvest
3 niche
4 market leadership

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5
Q

Diffusion

A

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

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6
Q

Skim vs Penetration

A

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
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7
Q

Cumulative adoption

A

see the diagram

users accumulate over time in S Curve
innovators
early adopters
early majority
late majority 
late mass
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8
Q

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

A

Diffusion

Cumulative Adoption S Curve

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9
Q

Bass Diffusion Model

A

Shows new adopters from innovators and imitators and new adopters

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10
Q

Exponential Diffusion Curve

A

Shows % First year Tryers

increases and then remains constant

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11
Q

Why things catch on? by Jonah Berger

STEPPS

A

STEPPS

Social Currency
Triggers
Emotion
Public
Practical Value
Stories
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12
Q

What is this example?

If you search turkey in google trends, it was searched most often during thanksgivings

A

STEPPS

Triggers

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13
Q

How do you decide whether to skim or penetrate?

A

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
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14
Q

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

A

ACCORD

skim or penetrate

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15
Q

Skim Tactics

A

Price: High
Place: Selective
Product: Complex ACCORD
Promotion: Selective, focus on education

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16
Q

penetrate tactics

A

price: low
place: extensive
product: simple ACCORD
promotion: intensive, focus on awareness

17
Q

What is this example?

Kickstarter

A

crowdfunding as marketing

skim probably

18
Q

what are some problems with PLC and Diffusion Frameworks? (4)

A

1 sales patterns aren’t entirely smooth
- data is messy and hard to see what stage of PLC it is in

2 conflicting factors make it hard to judge skim vs penetration

3 questions about cause and effect
- whether PLC drives strategy or strategy drives PLC
(self fulfilling prophecy)

4 Level of analysis
- generally applies to subcategory not specific brands