MRKTNG 3000 Midterm: Marketing 3000 Test #3 study notes
Marketing 3000 Test #3 Class Notes 8/17/15 10:27 PM
Product Management
Product Life Cycle and Diffusion
• Introduction (First Stage)
o Innovation/New product offered
! New product class
! Sales/profits are low
! Marketing effort
" Stimulate demand
o Ex. Motorola invented the first beeper and Philips invented
the first flat screen TV.
o Poors example: The segway
• Growth
o Competition expands
o Marketing effort
! Differentiate the product from competitors.
! Target early adopters
o Ex. Blu-ray, 4G cell phones, hybrid cars
o This is when demand for the brand itself begins.
• Maturity
o Sales plateau because the product is familiar.
o Marketing effort
! Differentiation continues
! Promotion increases while price declines.
! Target early majority and lat majority buyers.
o Ex. Soft drinks, fast food, video games
o **promotion is at its highest**
• Decline
o Sales and profits decline
o Competition
! Increases outside product class
! Decreases within product class
o Marketing
! Find new uses
! Target “laggards”
o Ex.
! CD’s
! VHS
! Movie rental stores
! CRT TV’s
! Newspapers
Adopter categories
• Innovators
o Very eager to try new ideas
o More cosmopolite social relationships
• Early adopters
o Respected
o More integrated into the local social system
o The persons to check with before adopting a new idea.
• Early majority
o Deliberate
o Adopt new ideas just prior to the average time
o Seldom hold leadership positions
• Late majority
o Skeptical
o Adopting may be both an economic necessity and a reaction
to peer pressures.
• Laggards
o Oriented to the past
o Suspicious of the new
Factors that speed diffusion of an innovation
• Larger relative advantage
• High level of compatibility
• Easily observed
• Less complex
• Easy to try
The stages in the individuals adoption process
• Awareness
o Consumer is first exposed to the product innovation.
! Ex. Seeing an ad for a new product.
• Interest
o Consumer is interested in the product and searches for
additional information.
! Ex. Searching online to learn more about the product.
• Evaluation
o Consumer decides whether or not to believe that the product
or service will satisfy the need.
! Ex. Will the camera take the quality of photos you
need?
• Trial
o Consumer uses the product for a limited time.
! Using a friends product
• Adoption
o If the trial is favorable then the consumer will purchase the
item.
Sources of information during the adoption process
• Impersonal mass media information is highly important during the
awareness and interest stages.
• Personal sources such as friends and family become more important
as the evaluation, trial, and adoption stages occur.
The importance of New product development
• Most often the key to profitability
o Apple gets more from new iphone, ipad, and ipods
o Glade plug-ins made more money in one year then glade had
made in the past five years.
• Provides sustainable competitive advantage and survivability
• Substantive capacity to change peoples lives – hopefully for the
better.
What is a new product?
• New-to-the-world products
o Inventions that create a new market
! Ex. Red Bull, in-line skates, Kevlar
