ch. 15: diffusion of innovation

early adopters (greatest degree of opinion leadership) early majority

________ ____________ are a larger group that comes after innovators. they are relatively young, have high education/income, more social, and are considered opinion leaders - influential in conveying ideas to others. _________ ______________ are influenced heavily by opinion leaders and deliberately adopt new innovation somewhat early on, just before the average member of a system.

late majority laggards *review graph on pg. 5 of notes!!!!!!!!!

________ ____________: whoever is left is now catching on, adopting new ideas just after the average member of a system. they are more skeptical, have lower education/income, and influenced by friends & family. _______________: traditional consumers who are suspicious of innovations and the last to adopt an innovation. they are not opinion leaders, are typically older/have lower income, and are the most risk-averse.

decline stage *in the decline stage, profits are extremely low and sales are dropping substantially.

___________ ________: long-run DROP in sales, large inventories of unsold items, elimination of all non-essential marketing expenses, "organized abandonment" (planning to exit the market accordingly).

growth stage *in the growth stage, profits are positive and sales are increasing faster.

___________ _________: INCREASING rate of sales, entrance of competitors, market consolidation, initial healthy profits, aggressive advertising of the DIFFERENCES BETWEEN BRANDS, and wider distribution.

classic number of adopters, time *review exhibit 11.2: four stages of the product life cycle on pg. 8 of notes!!!

____________ is an innovation that has a lengthy product life cycle. review graph comparing the acceptance cycles (in regards to _____________ of _____________ and __________) on pg. 7 of notes!!

contagion fashion

____________ is how quickly an innovation spreads (from early adopters & early majority); the degree to which consumers influence each other in the diffusion of a new product. ___________ is an innovation that has a moderately long and potentially cyclical product life cycle.

product life cycle high-effort hierarchy of effects

_____________ _______ ________ is a concept that provides a way to trace the stages of a product's acceptance, from its introduction (birth) to its decline (death). the _______-________ _____________ ______ __________ includes the stages of: awareness, information collection/search, attitude formation, trial, and adoption.

hedonic or aesthetic symbolic

_____________ or ______________ benefit: appeals to one's sensory needs. _____________ benefit: has new social meaning.

maturity stage *in the maturity stage, profits are decreasing and sales are increasing at a decreasing rate.

______________ _________: sales INCREASE at a DECREASING rate, saturated markets, annual models appear, LENGTHENED product lines, service & repair assume important roles, heavy promotions to consumers and dealers, marginal competitors drop out, and niche marketers emerge.

trialability complexity

______________ is how people are more likely to adopt an innovation if they can experiment with it prior to purchase (ex: free trials, samples in Sam's Club). _______________ is that a product that is easy to understand will be chosen over competitors.

observability relative advantage *ex. of the spread of new products: flat-screen TVs, wiis, red box, streaming services, etc.

______________ is that innovations that are easily observable are more likely to spread (ex: flex seal tape). ___________ ________________ is how a product should offer relative advantage over other alternatives.

diffusion adopters *information sources & information they want will be different at each level.

______________ is the process by which the adoption of innovation spreads. there are five categories of _____________, each different in their education, age, income, and level of risk aversion.

discontinuous functional

______________: offering that is so new that one has never known anything like it before (ex: commercial air travel, apple watch). characteristics of innovation, benefits offered: _______________ benefit: has utilitarian benefits that are different from or better than those of alternatives (ex: better gas mileage).

diffusion of innovation novelty

_______________ _____ _____________ is how successful innovations spread through the population at various rates (ex: retail tech, streaming services). innovations can be characterized by the degree of ____________.

innovation new manufacturing technique, new product variation, new way to deliver product, and new way to package product.

_______________ is a product, service, or idea that consumers within a market segment perceive as new. what are some examples of this?

introductory stage *in the introductory stage, profits are negative and sales are slowly increasing.

_________________ ________: high failure rates, LITTLE COMPETITION, frequent product modification, limited distribution, high marketing and production costs, negative profits with slow sales increases, promotion focuses on AWARENESS and INFORMATION, and communication challenge is to stimulate primary demand.

continuous dynamically continuous

innovations characterized by degree of novelty: ______________: limited effect on existing consumption patterns (incremental changes). _______________ ______________: pronounced effect on consumption practices (ex: iPad).

low-effort hierarchy of effects fad

the _______-_________ _____________ ____ __________ includes the stages of: awareness, trial, attitude formation, and adoption. ________ is an innovation that has a very short product life cycle.

compatibility, trialability, complexity, observability, and relative advantage. compatibility

there are five prerequisites for successful adoption. what are they? _______________ is that innovation should be compatible with consumers' lifestyles (ex: baby formula in developing countries).

innovators, early adopters, early majority, late majority, and laggards. innovators

what are the five categories of adopters? ______________ come first, tend to be highly educated and have the highest income, are risk tolerant (accept the most amount of rise), are young, and rely on scientific sources of information.