Marketing Communications and New Product Adoption

Marketing Communications and New Product Adoption

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Case 1: New Product AdoptionCase 1: New Product AdoptionThe InternetThe Internet

• 2001: 63% U.S. HH own computer57% HH connected to Internet

How long will it take for Internet to reach 100% penetration?

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Case 2: New Product AdoptionCase 2: New Product AdoptionTelevisionTelevision

• 1947-1955: Took 8 years to reach 63% penetration

• Took another 30 years to reach current penetration of 98%

• Would you expect Internet to reach same 98% level? How long would it take? Faster or slower than for TV?

• What are some considerations that shed light on these questions?

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New Product Adoption:New Product Adoption:The Internet vs. TVThe Internet vs. TV

• Owning/operating a TV is simple; Internet requires owning/operating a computer plus subscribing to ISP and learning to work it.

• Increasing costs of Internet access (AOL’s 30 million subscribers had 9% rate increase recently)

• Many have Internet access at work (don’t need it at home too)

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New Product Adoption:New Product Adoption:The Internet vs. TVThe Internet vs. TV

• ‘Net has grown faster than many other technologies

• Availability of high-speed access will further accelerate growth

• Will compete with traditional broadcast media as delivery vehicle for movies, music, and other entertainment

• Major entertainment companies partnering to deliver content via streaming video, etc.

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New Products & InnovationNew Products & Innovation

New flavors, sizes, packages

Annual new models in cars;

New fashions

First introduction of compact cars;

Color television

Invention of computer;

Jet aircraft

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Adoption ProcessAdoption Process

InnovationRelated

Characteristics

Relative Advantage

Compatibility

Complexity

Trialability

Observability

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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

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An illustration of relative advantage


Another illustrationof relative advantage


Relativeadvantage 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

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A compatibilityproblem


An effort to regain compatibility

ComplexityComplexity

• An innovation’s degree of perceived difficulty

• The more difficult, the slower the rate of adoption

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ComplexityComplexity

Offsetting perceivedproduct 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

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Adoption ProcessAdoption Process

An effort to promote

vicarious trial

ObservabilityObservability

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

• Higher the visibility, more rapid the adoption rate

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Case 3: New Product AdoptionCase 3: New Product AdoptionGo-GurtGo-Gurt

How to get kids & teens to eat yogurt?

Spoon is a bother, so traditional packaging restricted salesGeneral Mills’s Yoplait division: Yogurt in a tube (Yogurt for kids

on the Go)Flavors: Strawberry splash, Berry blue blast, Watermelon

meltdownInstantaneous hit: 1st year sales $100 mill. Nearly doubled

proportion of yogurt users < age 19 (to 1 in 6)

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How to get kids & teens to eat Go-Gurt?

Brand name facilitated adoption (communicated the positioning statement)

Portability the key positioningSaatchi & Saatchi Kid Connection: Yoplait’s ad agency“Lose the Spoon”Skateboarder whizzing by bored teen eating yogurt from

traditional container

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How to get kids & teens to eat Go-Gurt?

Extensive sampling in major U.S. marketsFleets of teens on skateboards, scooters, equipped with shoulder

packs full of samplesRefrigerated trucks nearby for reloading>1 mill samples distributedSales accelerated rapidly

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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

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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

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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 (not across)17

Opinion LeadersOpinion Leaders

Characteristics

• More cosmopolitan• More gregarious• Slightly higher socioeconomics status

(but exist at each SES level)• Generally more innovative• Willing to act differently

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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 respondto requests from customers for market

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Tactics: “Seeding the Market”Tactics: “Seeding the Market”

• Supplying advance samples in key markets to people who are likely to be influential.

• Finding cheerleeders who will get the talk started.

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Marketing Communications and New Product Adoption

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