Diffusion of innovation and job Specification.pptx

Diffusion of Innovation

1. Diffusion of innovation

2. First buyers are called Innovators . It is difficult to characterize innovators because they differ from one category to another. The set of customers who buy the product next are called early adopters . Early adopters cannot take the risk of buying the product first. Opinion leaders are critical in hastening the process of diffusion of the new product as they influence other prospects to adopt the new product.

3. The last category of consumers is Laggards . They are traditional. Usually, they comprise of the older, less educated and not very well off portion of the target market. The Early majority are deliberate and cautious. And the Late majorit y are more cautious and skeptical than the Early majority.

4. PRODUCT LIFE CYCLE AND MARKETING MIX.

5. A new product passes through set of stages known as product life cycle. Product life cycle applies to both brand and category of products. Its time period vary from product to product. Modern product life cycles are becoming shorter and shorter as products in mature stages are being renewed by market segmentation and product differentiation.

6. Stages of Product Life Cycle Product life cycle comprises four stages: Introduction stage Growth stage Maturity stage Decline stage

7. ➢ Introduction Stage . At the introductory stage: - • The product is unknown, • The price is generally high, • The placement is selective, and • The promotion is informative and personalized At introduction stage , the company core focus is on establishing a market and arising demand for the product. So, the impact on marketing mix is as follows: • Product Branding, Quality level and intellectual property and protections are obtained to stimulate consumers for the entire product category.

8. • Price High(skim) pricing is used for making high profits with intention to cover initial cost in a short period and low pricing is used to penetrate and gain the market share . • Place Distribution at this stage is usually selective and scattered. • Promotion At introductory stage , promotion is done with intention to build brand awareness. Samples/trials are provided that is fruitful in attracting early adopters and potential customers.

9.   Growth Stage At the growth stage: - • The product is more widely known and consumed, • The sales volume increases, • The price begins to decline with the entry of new players, • The placement becomes more widely spread, and • The promotion is focused on brand development and product image formation. Effect on 4 P’s of marketing is as under: • Product Along with maintaining the existing quality, new features and improvements in product quality may be done. All this is done to compete and maintain the market share.

10. • Price Price is maintained or may increase as company gets high demand at low competition or it may be reduced to grasp more customers. • Distribution Distribution becomes more significant with the increase demand and acceptability of product. More channels are added for intensive distribution in order to meet increasing demand. On the other hand, resellers start getting interested in the product, so trade discounts are also minimal. • Promotion At growth stage, promotion is increased. When acceptability of product increases, more efforts are made for brand preference and loyalty.

11. Maturity Stage At maturity stage: - • The product is competing with alternatives, • The sales are at their peak, • The prices reach to its lowest point, • The placement is intense, and • The promotion is focused on repeat purchasing. Marketing mix decisions include: • Product At maturity stage, companies add features and modify the product in order to compete in market and differentiate the product from competition.

12. • Price Because of intense competition, at maturity stage, price is reduced in order to compete. • Distribution New channels are added to face intense competition and incentives are offered to retailers to get shelf preference over competitors. • Promotion Promotion is done in order to create product differentiation and loyalty. Incentives are also offered to attract more customers.

13. Decline Stage At decline stage: - • The product faces reduced competition, • The sales volume reduces, • The price is likely to fall, • The placement is selective, and • The promotion is focused on reminding.

14. At decline stage company has three options: 1. Maintain the product, reduce cost and finding new uses of product. 2. Harvest the product by reducing marketing cost and continue offering the product to loyal niche until zero profit. 3. Discontinue the product when there’s no profit or a successor is available. Selling out to competitors who want to keep the product.

15. LIMITATIONS OF PRODUCT LIFE CYCLE (PLC)

16. Product life cycle is criticized that it has no empirical support and it is not fruitful in special cases. Different products have different properties so their life cycle also vary. It shows that product life cycle is not best tool to predict the sales. Sometimes managerial decisions affect the life of products in this case Product Life Cycle is not playing any role. Product life cycle is very fruitful for larger firms and corporations but it is not hundred percent accurate tool to predict the life cycle and sales of products in all the situations.