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17 - Adoption of Innovations and the Product Life Cycle...

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Adoption of Innovations and the Product Life Cycle Maura Scott
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2 Discussion Guide 1. What is a New Product? 2. Diffusions 3. Adopter Categories 4. Stages in the New Product Adoption Process. 5. Case Study
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3 New Products We LOVE! Think of new products that you’ve purchased in your life that you just LOVE. Think of new products that you were clamoring for, that finally were invented. Maybe a new flavor for a favorite food or beverage. Maybe a new makeup. Maybe something electronic.
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4 New Product Development What is a “New” Product? New-to-the-world products New product lines Additions to existing product lines Improvements and revisions of existing products Repositioned products Cost reduction products Can you think of EXAMPLES of these?
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5 What is a new product? Types of innovations. Degree of Novelty A Continuous Innovation Limited effect on existing consumption patterns Most product innovations Examples: ______________________________________ A Dynamically Continuous Innovation A pronounced effect on consumption patterns; new technology Examples: ______________________________________ A Discontinuous Innovation An offering so new that we have never known anything like it Example: __________________________________
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6 Innovations- benefits offered Types Based on Benefits Offered Functional Innovations A new offering that provides utilitarian benefits different from or better than existing alternatives Example: handheld computers vs. desktops & notebooks Aesthetic or Hedonic Innovations A new offering that appeal to our aesthetic, pleasure-seeking and/or sensory needs. Examples: new forms of dance or music, “green ketchup” Symbolic Innovations An offering that has new social meaning Example: clothing indicating group membership, earrings for men
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7 New Product Development New Product Failure is Rampant : _____% of new U.S. consumer products _____% of new European consumer products Reasons for failure include: Ignoring unfavorable market research Overestimating market size, Marketing mix decision errors, and Stronger than anticipated competitive actions
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8 New Product Development Successful new products: Offer a strong relative advantage Reflect better understanding of customer needs, and beat the competition to market Exhibit higher performance-to-cost ratios and higher contribution margins Are launched with larger budgets Have stronger top management support
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9 Diffusion Process and Adoption Diffusion ___________________________________ that has adopted an innovation at a specific point in time Adoption The stages through which an individual consumer passes in arriving at a decision to try (or not to try), to
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