Chapter Six

MarCom’s Role in MarCom’s Role in Facilitating Product Facilitating Product

AdoptionAdoption

Chapter Six ObjectivesChapter Six Objectives

• Appreciate the role of marketing communications in facilitating the introduction of new products

• Explain the innovation-related characteristics that influence consumers’ adoption of new products

• Describe the diffusion process and the various groups of adopters

Chapter Six ObjectivesChapter Six Objectives

• Understand efforts employed by marketing communicators to manage the diffusion process

• Appreciate the role of word-of-mouth communications in facilitating new product adoption

• Use “buzz” to heighten the rate of product adoption

New Products and New Products and Marketing CommunicationMarketing Communication

• Introducing new products is essential for most companies’ success and long-term growth

• Product failure-rate estimated 35-45%

• Marketing communications facilitate successful new product introductions and reduce the product failure rate

New-Product Adoption Process ModelNew-Product Adoption Process Model

FreeSamples

Coupons DistributionProduct

Satisfaction

Awareness

Class

Trier

Class

Repeater

Class

PriceAdvertising

New-Product Adoption Process ModelNew-Product Adoption Process Model

Three stages of adopting a new product

Awareness Class

Trier Class

Repeater Class

Introduction of Sony’s New CameraIntroduction of Sony’s New Camera

New Sony camera and the adoption

process

New-Product Adoption Process ModelNew-Product Adoption Process Model

• Variables: free samples, coupons, advertising, and distribution

• Successful introduction of new products requires an effective advertising campaign, widespread product distribution, and extensive couponing and sampling

Awareness ClassDistribution

AdvertisingCouponsFreeSamples

New-Product Adoption Process ModelNew-Product Adoption Process Model

• Variables: coupons, distribution, and price

• Once the consumers becomes aware of a new product, there is an increased probability that they will actually try the new offering

Trier ClassPriceDistributionCoupons

New-Product Adoption Process ModelNew-Product Adoption Process Model

• Variables: advertising, price, distribution and product satisfaction

• Consumers repeat the purchase if advertising reminds them about the brand, if the price is reasonable, if the brand is accessible in retail outlets, and if product quality is satisfactory

Repeater ClassProduct

Satisfaction

DistributionPriceAdvertising

Adoption ProcessAdoption Process

Innovation

Related

Characteristics

Relative

Advantage

Compatibility

Complexity

Trialability

Observability

Relative AdvantageRelative Advantage

• A product innovation is perceived as better than existing alternatives

• Positively correlated with an innovation’s adoption rate

• Exist when a new product offers:» Better performance, increased comfort,

saving in time and effort, or immediacy of reward

Relative AdvantageRelative Advantage

An illustration of

relative advantage

Relative AdvantageRelative Advantage

An illustration of

relative advantage

Relative AdvantageRelative Advantage

Another

illustration of

relative advantage

Relative AdvantageRelative Advantage

Advertising a

competitors’

relative

disadvantages

Relative AdvantageRelative Advantage

An illustration of

relative advantage

Relative AdvantageRelative Advantage

Another illustration

of relative advantage

Relative AdvantageRelative Advantage

Relative

advantage

of the U.S.

mail service

CompatibilityCompatibility

• An innovation is perceived to fit into a person’s way of doing things

• The greater compatibility, the more rapid a product’s rate of adoption

• Overcome perception of incompatibility through heavy advertising to persuade consumers

CompatibilityCompatibility

Compatibility

CompatibilityCompatibility

A compatibility

problem

CompatibilityCompatibility

An effort to regain compatibility

ComplexityComplexity

• An innovation’s degree of perceived difficulty

• The more difficult, the slower the rate of adoption

ComplexityComplexity

Offsetting perceived

product complexity

TrialabilityTrialability

• An innovation can be used on a limited basis prior to making a full blown commitment

• The trial experience serves to reduce the risk of a consumer’s being dissatisfied with a product after having permanently committed to it through outright purchase

Adoption ProcessAdoption Process

Trialability

ObservabilityObservability

• The product user or other people can observe the positive effects of new product usage

• Higher the visibility, more rapid the adoption rate

ObservabilityObservability

High Visibility

Innovators

(2.5%)

Early

Adopters

(13.5%)

Early

Majority

(34%)

Late

Majority

(34%) Laggards

(16%)

Mean Time of

Adoption

Diffusion ProcessDiffusion Process

• Concerned with the broader issue of how an innovation is communicated and adopted throughout the marketplace

• The process of spreading out

• Adopter categories» Five different type of consumers» Normal distribution

The Diffusion ProcessThe Diffusion Process

Innovators

(2.5%)

Early

Adopters

(13.5%)

Early

Majority

(34%)

Late

Majority

(34%) Laggards

(16%)

Mean Time of

Adoption

Diffusion ProcessDiffusion Process

Innovators

• 2-3%, the first to accept a new idea or product

• Venturesome and willing to take risks• Cosmopolites: willing to seek social

relationships outside of their local peer group

• Rely heavily on impersonal information sources

Diffusion ProcessDiffusion Process

Early Adopters

• 13%, the second to adopt an innovation• Localites: well integrated within the

community and respected by friends• Often sought for advice and information

about new products from peers• Opinion leaders primarily come from the

early adopter group

Diffusion ProcessDiffusion Process

Early Majority

• 34%, adopt the product prior to the mean time of adoption

• Deliberate and cautious • Spend more time in the innovation

decision process• Slightly above average in education and

social status

Diffusion ProcessDiffusion Process

Late Majority

• 34%, just following the average adoption time

• Skepticism• Peers are the primary source of new ideas• Make little use of mass media• Below average in education, income and

social status

Diffusion ProcessDiffusion Process

Laggards

• 16%, the final to adopt an innovation• Bound in tradition• “It it was good enough for my parents, it’s

good enough for me.”• Closely tied to local community and have

limited contact with the mass media

Objectives

Managing the Diffusion ProcessManaging the Diffusion Process

1. Secure sales quickly - rapid takeoff

2. Achieve rapid acceleration- rapid acceleration

4. Maintain sales as long as possible - long-run franchise

3. Secure maximum sales potential- maximum penetration

Desired and Typical Desired and Typical Diffusion PatternsDiffusion Patterns

Time of Adoption

Po

ten

tial

Ad

op

ters

100

90

80

70

60

50

40

30

20

10

0

“Desired” Pattern

Introduction “Typical” Pattern

Managing the Diffusion ProcessManaging the Diffusion Process

Advertisement

of Clomicalm

Managing the Diffusion ProcessManaging the Diffusion Process

Rapid takeoff can be facilitated by:

• Aggressive sales force to secure trade support for new products

• Intensive advertising to create awareness• Sufficient sales promotion activity to

generate trial-purchase behavior

Managing the Diffusion ProcessManaging the Diffusion Process

Rapid acceleration accomplished by:

• Ensuring quality product that will promote positive word-of-mouth

• Continuing to advertise heavily to reach later adopter groups

• Sales force provides reseller support• Using sales promotion creatively to

encourage repeat-purchase behavior

Managing the Diffusion ProcessManaging the Diffusion Process

Maximum penetration approached by:

• Continuing the same strategies that stimulated rapid acceleration

• Revise the product and advertising strategies to appeal to the needs of later adopters

Managing the Diffusion ProcessManaging the Diffusion Process

Long-run franchise maintained by:

• Old product continues to meet the market’s needs

• Distribution suitable to reach the market• Advertising continued to remind the

market about the product

Stimulating Stimulating Word of Mouth InfluenceWord of Mouth Influence

• Impersonal sourcesImpersonal sources: information received from television, magazines, the Internet, and other mass-media sources

• Personal sourcesPersonal sources: word-of-mouth influence from friends, acquaintances, and from business associates

Opinion LeaderOpinion Leader

• A person who frequently influences other individuals’ attitudes or overt behavior

• An informer, persuader, and confirmer

• Influence is typically limited to one or several consumption topics

• Influence moves horizontally through a social class

Opinion LeadersOpinion Leaders

Characteristics

• More cosmopolitan• More gregarious• Slightly higher socioeconomics status• Generally more innovative• Willing to act differently

Opinion LeadersOpinion Leaders

Market Mavens

Individuals who have information about

many kinds of products, places to shop,

and other facets of markets, and initiate

discussions with consumers and respond

to requests from customers from market

information

Stimulating Stimulating Word of Mouth InfluenceWord of Mouth Influence

• Positive word-of-mouth communication is critical in the success of a new product of service

• Unfavorable WOM have devastating effects because consumers seem to place more weight on negative information in making evaluations

Creating “Buzz”Creating “Buzz”

• Creating and epidemic

• Igniting explosive self-generated demand