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Marketing Communications and New Product Adoption

Marketing Communications and New Product Adoption. 6. Case 1: New Product Adoption The Internet. 2001: 63% U.S. HH own computer 57% HH connected to Internet How long will it take for Internet to reach 100% penetration?. 1. Case 2: New Product Adoption Television.

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Marketing Communications and New Product Adoption

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  1. Marketing Communications and New Product Adoption 6

  2. Case 1: New Product AdoptionThe Internet • 2001: 63% U.S. HH own computer 57% HH connected to Internet How long will it take for Internet to reach 100% penetration? 1

  3. Case 2: New Product AdoptionTelevision • 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? 2

  4. New Product Adoption:The Internet vs. TV 3

  5. New Product Adoption:The Internet vs. TV 4

  6. New 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 5

  7. Adoption Process Trialability Relative Advantage Observability Innovation Related Characteristics Compatibility Complexity 6

  8. Relative Advantage • A product innovation is perceived as better than existing alternatives • Positively correlated with an innovation’s adoption rate 7

  9. Relative Advantage An illustration of relative advantage

  10. Relative Advantage Another illustration of relative advantage

  11. Compatibility • 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: 8

  12. Compatibility A compatibility problem

  13. Complexity • An innovation’s degree of perceived difficulty • The more difficult, the slower the rate of adoption • Examples? 9

  14. Complexity Offsetting perceived product complexity

  15. Trialability • 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 10

  16. Adoption Process An effort to promote vicarious trial

  17. Observability • The product user or other people can observe the positive effects of new product usage • Higher the visibility, more rapid the adoption rate 11

  18. Adoption Process Trialability Relative Advantage Observability Amazon Kindle 2.0? Compatibility Complexity 6

  19. Case 3: New Product AdoptionGo-Gurt How to get kids & teens to eat yogurt? 6

  20. Stimulating Word of Mouth Influence • Impersonal sources: • Personal sources: 9

  21. Stimulating Word of Mouth Influence • Positive word-of-mouth communication is critical in the success of a new product or service • Unfavorable WOM have devastating effects because consumers seem to place more weight on negative information in making evaluations 10

  22. Opinion 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) 11

  23. Opinion Leaders Characteristics 12

  24. Opinion Leaders Market Mavens 13

  25. Tactics: “Seeding the Market” • Supplying advance samples in key markets to people who are likely to be influential. • Finding cheerleaders who will get the talk started. 14

  26. Creating “BUZZ” • Law of the Few • StickinessFactor • Power of Context

  27. Igniting Explosive Demand 1.Design the product to be unique, visible • Select and seed the vanguard • Ration supply • Use celebrity icons • Tap the power of lists 6. Nurture the grass roots

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