MARK1012 Chapter Notes - Chapter 9: Market Saturation, Observability
MARK1012 CHAP 9
Chapter 9: Developing New Products
Why firms create new products?
-Changing consumer needs
-Market saturation
-Fashion trends/ cycles
-Improving business relationships
Diffusion of innovation
Innovation spreads throughout a market group
Innovators: Innovators are consumers that want to be the first to get their hands
on new products.
Early adopters: Early adopters do not take as much risks as innovators but rather
wait and purchase the product after reviews.
Early majority: Are the early group of buyers that enter a new product market &
represent approx. 34% of the population.
Late majority: Are the last group of buyers to enter a new product market.
Laggards: Laggars are a group who avoid change and rely on traditional products.
They make up approx. 16% of the market.
The Diffusion of Innovation Theory
-Firms are able to predict what types of customers are willing to buy their new
product
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Document Summary
Innovators: innovators are consumers that want to be the first to get their hands on new products. Early adopters: early adopters do not take as much risks as innovators but rather wait and purchase the product after reviews. Early majority: are the early group of buyers that enter a new product market & represent approx. Late majority: are the last group of buyers to enter a new product market. Laggards: laggars are a group who avoid change and rely on traditional products. Firms are able to predict what types of customers are willing to buy their new product. With this knowledge firms are also able to develop effective promotion, pricing & other marketing strategies to push acceptance among each target market or consumer group. Relative advantage: if the product is perceived to be better than substitutes then diffusion will be quick. Compatibility: diffusion can occur faster or slower depending on consumer features like cultural differences.
