unit-3 MM
unit-3 MM
• This theory suggests that there are five categories of product adopters
for any product category. And they are:
• Innovators - extroverts, highly educated, multiple sources, they are
under the largest influence
• Early Adopters - social leaders, educated, popular, potential adopters
• Early Majority - lots of social contacts, deliberate
• Late Majority - has traditional ideas, doubtful, lower socio-economic
status
• Laggards - Highly skeptical, main direct influences are mostly friends
The Everett Rogers Adoption Curve -also referred
to as the product diffusion curve.(5 stages of
product diffusion)
• a theory that demonstrates how individuals and large groups get adapted to
new ideas and innovations. It also makes us understand the characteristics of
innovations, as well.
• If we take the patterns we learned from the Rogers diffusion of innovation
framework; we can say the way to customer engagement goes through the five
essential steps of technology adoption:
• Knowledge.
• Knowledge leads to awareness. And when this notion becomes repetitive, it
increases the likelihood of customer engagement. The tools that can help you
with this stage are usually search marketing and, of course, social networks to
create a social influence as well.
• Persuasion.
• Naturally, as you start advertising your unique advantages and benefits, the
likelihood of increasing your customers' interest will significantly rise. It's basic
marketing science.
• Decision.
• This part is a bit tricky since the actual buying commitments may happen under
unpredictable circumstances; you could step up your marketing strategies by
paying extra attention to your advertising at this point.
• Implementation.
• After the sale is closed, your new customer will need excellent communication and
24/7 support from your teams to stick around for a long time.
• Confirmation.
• This is the part where the diffusion of innovation pattern is, let's say, handled here.
It's where your subscriber keeps on an ideal form of communication either directly
or through online reviews, and shares opinions about how well the whole diffusion
process works out. Providing great customer service, is for sure, the key ingredient
to continued engagement.
product life cycle
• The product life cycle is the progression of a product or
service from ideation to completion.
• Utilizing a product life cycle can help you make informed
decisions, increase company profitability, and improve
customer satisfaction.
• The concept was developed by German economist
Theodore Levitt, who published his Product Life Cycle
model in the Harvard Business Review in 1965.
• Marketers use the product life cycle to customize messaging for
each stage, using market research to guide their efforts. The
maturity of a product in the PLC allows marketing teams to
determine what marketing efforts they
should focus on and how they should promote a product. This
results in better strategy and enhanced product marketing efforts.
• Managers use the product life cycle to make strategic decisions
about pricing, expansion into new markets, packaging design,
and more. The product life cycle helps to align company strategy
with a product’s current stage of development. Managers use
this alignment to pinpoint new opportunities and improve the
market performance of a product over its lifetime.
4 stages of product life cycle
• Introduction
• Growth
• Maturity
• Decline
1. Introduction Stage
• When a product first launches, sales will typically be low and grow slowly.
In this stage, company profit is small (if any) as the product is new and
untested. The introduction stage requires significant marketing efforts, as
customers may be unwilling or unlikely to test the product. There are no
benefits from economies of scale, as production capacity is not
maximized.
• The underlying goal in the introduction stage is to gain widespread
product recognition and stimulate trials of the product by consumers.
Marketing efforts should be focused on the customer base of innovators –
those most likely to buy a new product. There are two price-setting
strategies in the introduction stage:
• Price skimming: Charging an initially high price and
gradually reducing (“skimming”) the price as the market
grows.
• Price penetration: Establishing a low price to quickly
enter the marketplace and capture market share, before
increasing prices relative to market growth.
2. Growth Stage
• If the product continues to thrive and meet market needs, the product
will enter the growth stage. In the growth stage, sales revenue usually
grows exponentially from the take-off point. Economies of scale are
realized as sales revenues increase faster than costs and production
reaches capacity.
• Competition in the growth stage is often fierce, as competitors introduce
similar products. In the growth stage, the market grows, competition
intensifies, sales rise, and the number of customers increases.
Price undercutting in the growth stage tends to be rare, as companies in
this stage can increase their sales by attracting new customers to their
product offerings.
3. Maturity Stage
• Eventually, the market grows to capacity, and sales growth of the product
declines. In this stage, price undercutting and increased promotional efforts are
common as companies try to capture customers from competitors. Due to fierce
competition, weaker competitors will eventually exit the marketplace – the
shake-out. The strongest players in the market remain to saturate and dominate
the stable market.
• The biggest challenge in the maturity stage is trying to maintain profitability
and prevent sales from declining. Retaining customer brand loyalty is key in the
maturity stage. In addition, to re-innovate itself, companies typically employ
strategies such as market development, product development, or marketing
innovation to ensure that the product remains successful and stays in the
maturity stage.
4. Decline Stage
• In the decline stage, sales of the product start to fall and profitability decreases.
This is primarily due to the market entry of other innovative or substitute
products that satisfy customer needs better than the current product. There are
several strategies that can be employed in the decline stage, for example:
• Reduce marketing efforts and attempt to maximize the life of the product for as
long as possible (called milking or harvesting).
• Slowly reducing distribution channels and pulling the product from
underperforming geographic areas. Such a strategy allows the company to pull
the product out and attempt to introduce a replacement product.
• Selling the product to a niche operator or subcontractor. This allows the
company to dispose of a low-profit product while retaining loyal customers.
Product Mix Strategy