THE CONSUMER INNOVATION MODEL AND THE PRODUCT LIFE CYCLE

 Describe the five (5) types of consumers in the Consumer Innovation Model, and explain its relationship with the Product Life Cycle (PLC).

 Porter (1985) suggests that the typical industry environment is determined by a number of factors, including the effort of concentration of its firms, the stage of maturity, and it’s enclosure to international competition. This assertion makes the understanding of the Product Life Cycle absolutely crucial to business and cooperate communication success. This fact even holds truer because if the perceived relationship between the PLC and the way it defines various product adoption market categories among population.

                                                             THE PRODUCT LIFE CYCLE.

         The notion of the PLC is derived from the concert that a new product or service enters into a life-cycle once it is offered on the market. The concert illustrates certain distinct stages in a product’s sales or profitability history. By matching the various phases with the rate of sales and profitability of the phases product, the PLC shows the different distinct stages that the product goes flow over time (cravens 1997).

 The PLC curve is shown below:

 INTRODUCTION

Slow growth in sales, little awareness of product existence and features, little, few or no competitors, high for unit cost due to low output and high price cost.

GROWTH

Marked by more product acceptance, rising sales and profits, falling marginal cost due to rising demand, rising competition.

MATURITY

It is long phase characterized by sales growth and falling profits.

DECLINE STAGE.

It is decreasing sales, falling profits and frequent complaints about product performance. (Kotler,1996)

                        DIFUSION OF INNOVATION THEORY/ PRODUCT ADOPTER CATEGORIES.

    A new product is a good or service or idea that is perceived by some potential customers as novelle. The adoption process is the “mental process through which an individual passes from first learning about an innovation to final adoption.” This makes adoption to be defined a decision of an individual to become a regular use of the product. Generally, Kotler and Amstrong (1996) posit that consumers go through five stages in the process of adopting an innovation: awareness, interest, evaluation, trial and adoption.

 Rogers (1983) has postulated a scheme of describing product adopters categories, on the basis of the relative time taken. He conceived of the diffusion of a new product as referring to the spread of information about the product in the market place.

  Adoption is the process by which consumers incorporate the product into their buying patterns.

   The diagram above depicts the various types of people who would buy the product after its launch. It shows that people differ greatly in their willingness to try and adopt new things. It is also noteworthy that peoples behaviours also greatly across various product categories significantly, although there may be “consumption pioneers”, and early adopters others adapt new products much later. To Rogers ( 1983), people exhibit an adoption behavior that is normally distributed, generating a bell-shaped curve that represents various consumers namely innovators early adopters, early majority, late majority and laggards. On launch after a slow start, increasing numbers of people adopt yhe new product, reaching a peak and declining. This yields five adopter groups, each with different values and characteristics. Thus to Kotler and Armstrong (1996), the world suggests that different new product marketer should think about how to help consumer make through the stages of adopter.

            Innovators(2.5%) venture some, risk-taking, young educated, high income earning and high spending power. They are also well informed and high information seeking and information processing behavior. Early Adopters (13.5%) are opinion leaders and shapers, careful deliberate have high education and much younger than late adopters. Early majority (3x%) are slightly above average, education, social states and income, rely on internal information sources and influenced by early adopters. Late majority (3x%) are older, low education, income and social states. Laggards are much older, conservative and tradition oriented (cravens,1997).

                   It is vital for the firm to research the and characteristics of innovators, early adopters and early majority, since they adopt the product earliest such customers insights are also vital because they help identify how direct marketing efforts to move them quickly up to the adoption process( Kotler and Armstrong, 1996).

                                     

DIFFUSION MODEL AND PRODUCT LIFE CYCLE.

The PLC shows the stages that a plot passes through during its life cycle, while the diffusion model shows the type of people who adopt the product on it moves through its life cycle (cravens, 1997)

 Introduction stage—innovators

Growth---early adopter

Maturity----early and late majority

The decline----Laggards

Factors influencing diffusion and adoption.

--Communicability (observed and described to offer)

--Trialability/Divisibility

--Relative advantage

--Complexity

-compartibilty.

REFERENCES

1. Everett M. Rogers (1983-3^rd ed.),”Diffusion of Innovation”pg 247, New York.

2. Kotler, Philip & Armstrong, Gay (1996),Principles of Marketing”.

3. Peter Michele(1985),Competitive Advertising”.

4. Cravens, David (1997), Strategic Marketing.

COURSE:  ADVERTISING PRINCIPLES

NAME:  NANA AFUA ASANTEWAA YEBOAH

LEVEL 300 TOP-UP, EVENING SESSION.

ASSIGNMENT FOR ADVERTISING.

NAME: NANA AFUA ASANTEWAA YEBOAH

ASSIGNMENT: ADVERTISING PRINCIPLE

QUESTION: DISCUSS THE 2 MAJOR CATEGORIES OF CONSUMERS AND THEIR CHARACTERISTICS IN A CONSUMERS MARKET AND THE BUSINESS MARKET. LOOK FOR MINOR NEW PURCHASERS AND MINOR OLD PURCHASERS. ALSO LOOK FOR A MAJOR OLD PURCHASERS AND MINOR OLD PURCHASERS.

A consumer is an individual who buys products or services for personal use and not for manufacture or resale. A consumer is someone who can make the decision whether or not to purchase an item at the store, or someone who can be influenced by marketing and advertisement. Any time someone goes to a store and purchases a toy, shirt, beverage, or anything else, they are making that decision as a consumer.  OR 

Consumers are asserts of every business entity. Just like a two edged sword, consumers could help an organization grow or crush. They are in the business world, the ‘’heart beat” that determines the survival or otherwise of an organization. This is due to the underlining fact that, without consumers businesses, organizations, or institutions fail to exist. Yet for every entity to succeed, it is important that it identifies the two major categories of its consumers.

THE TWO MAJOR TYPES OF CONSUMERS:

1)      THE PERSONAL OR INDIVIDUAL CONSUMERS

2)      THE ORGANIZATIONAL CONSUMERS

The personal consumers accesses goods and services for their basic use and benefits and are also the sole decision makers in choosing a particular product over the other. First and foremost, the individual consumer makes a purchase for their own benefits, enjoyment and enlightenment. There are various reasons why consumers will choose a product above the other. It could be the packaging, colour combinations or even how consumers are treated. When a consumer makes a purchase it could be for two basic reasons; either to test what has been put out there or access a brand they are aware.

The Organizational consumers tend to be opposite. Decision to access goods and services is not for individual consumption but for the collective use of the entire organization. Organizational consumers also purchase a product for the collect benefit of the institution in which they work. Despite the fact that an individual person in the organization is a head of department, decision to purchase an item is automatically on an organizational level and the product are done for the organizational sake.

CHARACTERISTICS OF A PERSONAL CONSUMER IN THE CONSUMER MARKETS.

1)      They purchase goods and services for consumption rather than resale. Personal consumers buy for domestic use only. Hence they purchase in smaller quantities based on strictly their opinion to prevent items from going waste. 

2)      They also have income levels as a condition to consider when purchasing goods. They really take time to consider how really important a product they are going to get is before they make the move. Income levels also accounts for the type of product also bought hence quality can sometimes be compromise due to cost.

3)      Also individual feelings come to play when decision is being taken. For the mere fact that the product is for domestic use, extra care or time is not taken before going in for a product. Social issues or attributes come to play in purchasing a product hence a personal consumers values are a major factor in going in to buy product.

CHARACTERISTICS OF AN ORGANIZATIONAL CONSUMER IN A BUSINESS MARKET. 

1)      1)They purchase product in large quantities. Most of these products are raw materials like wood, plastics which were converted into other finished products.

2)     2) Organizational consumers usually do not make individualistic opinions when it comes to purchasing products. They consult other members of the organization and even go to the extent of conducting research to find out what their consumers want or needs are. They also go to great length to acquire professional help in their decision making process.

3)      3)Organizational consumers do not easily allow advertisement to confuse or easily persuade them when deciding on product to purchase. They allow rather the needs and wants of their customers to help them make their decision.

4)     4) Organizational consumers are more business minded when it comes to their approach to the market. They will usually take time to look for companies they can purchase from who will give them huge discounts for purchasing in larger amounts.

5)      5)There are more transactions in business markets because business products are often costly and complex. There are also fewer buyers in business markets, but they spend much more than the typical consumer does and have more rigid products standard.

6)      The business marketer normally deals with far fewer but far larger buyers than the consumers marketer does.

MINOR NEW PURCHASERS: They are consumers who are inexperienced in a particular setting which they find highly involving. They usually are those who will take uneducated decisions and can easily be persuade by adverts.

MINOR OLD PURCHASERS: They are those who have new problems to solve. Information they get is limited in helping solve their problem and are limited to simply trying the first brand encountered. They are not allowed to do re-evaluation of already use products.

MAJOR NEW PURCHASERS: Consumers purchase particular products over and over again. The habit or likeness for the product is the driving force.

MAJOR OLD PURCHASERS: They are the loyal consumers of a particular product. They purchase single branded product as their choice to fulfill a specific need.

ASSIGNMENT

Definition of International Advertising
 
               International advertising entails dissemination of a commercial message to target audiences in more than one country. Target audiences differ from country to country in terms of how they perceive or interpret symbols or stimuli; respond to humor or emotional appeals, as well as in levels of literacy and languages spoken. How the advertising function is organized also varies. In some cases, multinational firms centralize advertising decisions and budgets and use the same or a limited number of agencies worldwide. In other cases, budgets are decentralized and placed in the hands of local subsidiaries, resulting in greater use of local advertising agencies.
               International advertising can, therefore, be viewed as a communication process that takes place in multiple cultures that differ in terms of values, communication styles, and consumption patterns. International advertising is also a business activity involving advertisers and the advertising agencies that create ads and buy media in different countries. The sum total of these activities constitutes a worldwide industry that is growing in importance. International advertising is also a major force that both reflects social values, and propagates certain values worldwide.

Criteria for selecting an international advertising agency to produce a campaign

1.     Find out the size of the agency.

This is where you check if the agency has branches internationally. For example Europe, Asia or Sub-Saharan Africa. The branches do matter because for an international campaign to yield the necessary result the agency should be an international one.

2.     Look at their history of clients.

Their clientele should be those who have made the necessary impact in their line of duty via the use of the agency’s service. Their clientele should be a reference point you can look up to and believe your campaign will sail through.

3.     The agency should be multi lingual.

This is very essential because you will need an agency that is expressive with all sorts of international languages. The  use of language is very important in international campaigns since it is the “vehicle” through which messages will be sent.

4.     Ask about the main people who will be working on your advertising.

This is very vital as it helps you know how efficient the people who will work on your campaign are. They should ideally have a portfolio that can make you believe they can work out your ideas into realities in order to transform your business.

5.     Examine their past campaigns

This is also very important because it is through their past campaigns that you will know their track record. It is also through this that you will know how successful they have been in the past, the time span for achieving success and how flexible they were with past campaigns when the need arose.

6.      Check how they access a campaigns effectiveness

For an international campaign to “fly” there would be a need to first have a pilot project to see how successful it would be. So in trying to consider an international agency you should see how they access campaign like the example above and amongst others.