marketing- new product decisions

innovation of wii
shift in focus to casual gamers, reduced console performance, added motion control for fun, blue ocean strategy
adoption
an individuals decision to become a regular user of a product
diffusion
The transfer of information to customers about innovations; rogers diffusion curve
rogers diffusion curve
innovators, early adopters, early majority, late majority, laggards. normally distributed because of a learning effect due to personal interaction within social systems. as the number of adopters in the system increases, so does the level of interpersonal influence on non adopters.
a disruptive product
newer companies create disruptive technologies that are cheaper and likely to alter the competitive space (Kotler and Keller); these upset the market boundaries and change the traditional definition of an industry. (Lambin)
disruptive product examples
direct insurance, ebanking, low cost airline
categories of new products
new to the world, additions, improvements, repositionings, cost reductions
lateral mapping
Combining 2 product concepts or ideas to create a new offering. gas station and food. chocolate and toy.
line stretching
Adding items with price points above or below the current product line. (BMW entry level models)
brand extension
Extending an existing brand name to new product categories
brand extension opps
immediate brand recognition, promise of benefits associated with parent brand, expand customer base, deliver growth, dilute and erode customer base
brand extension failures
colgate kitchen entrees, clairol yogurt shampoo
Rogers five factors
relative advantage, compatibility, complexity, trialability, observability
relative advantage
The degree to which an innovation is perceived as being better than the idea it supersedes
compatibility
The degree to which an innovation is perceived as consistent with existing values
complexity
The degree to which an innovation is perceived as relatively difficult to understand and use
trialability
The degree to which an innovation may be experimented with on a limited basis
observability
The degree to which the results of an innovation are visible to others
how to impact relative advantage
reduce pricing, market to segment with greatest need, product design
how to impact compatibility
framing/positioning, product naming
how to impact complexity
explain complexity, simplify usage
how to impact trialability
free trials, place in generally accesible places
how to impact observability
increase visibility
developers curse
The 9 x effect. while developers are already sold on their products and see them as essential, consumers are reluctant to part with what they have. results in a mismatch of 9 to 1. gourville quote.
case
XM satellite radio
disruptive product characteristics
shift market structures to create new customers, require customer learning and acculturation, exist outside the current product hierarchy, offer unique benefits, different value proposition to incumbent products
brand extension requires
relatedness and degree of stretch, conceptual relatedness
keller and kotler approach to resistance
redesign product, alter beliefs about brand, alter beliefs about competitors brands, alter importance weights
gourville approach to resistance
accept resistance, minimize resistance