This week in Principles of Marketing we focused on a multitude of concepts. First and foremost, our SMART Projects, but also the Diffusion of Innovation, or Adoption Curve, as well as the Product Life Cycle. To better understand these areas, each group then applied the curves to their SMART PROJECTS. As well, on Tuesday, we further developed our SMART Project Surveys which we will soon bring to our target customers.
Diffusion of Innovation Curve(Adoption Curve)
This concept is largely used as a target market theory. Not only can this aid you in knowing where you currently stand regarding your product or service, but it can influence your market strategy as well. By determining who is buying/will buy your product, you can further market it to who is lagging, and increase buying.
This diagram shows who will purchase your product and at what time. I will use the Apple iPhone to help us better understand this theory.
Visionaries and Enthusiasts
Innovators
Innovators make up a whopping 2.5% of the market. These risk takers are internally motivated, and are the people to drive change within society. This small portion of the market is naturally very passionate about a certain area or product. Because of this, they very much so want to buy the product early, and "play" with it, or take it apart and really get to know it. Regarding buyer behavior, these people would fall under the high involvement category. The main difference between these Innovators and Early Adopters, is that these people are less focused on the social aspect of the product. They do not look for social validation in what the product they are passionate about, but instead, maybe the psychological rewards. These people most likely bought the iPhone when it was first released, and continue to buy each new model every year.
Early Adopters
Early Adopters make up about 13.5% of the market. Opposed to the Innovators, these evangelists are socially driven. Rather than purchasing the iPhone and immediately going home to "work" or "play" with it, these people would prefer driving to a friends house to quickly show them their new buy. Although this portion of the market it quick to buy the product, they do no beat out innovators in their speed. They are enthusiastic about the product, but what drives their enthusiasm is the social rewards, rather than tangible benefits.
The Chasm
This is not a portion of the market, but rather an obstacle to overcome in order to achieve maximum purchases, and eventually profits. To make your product or service successful, you MUST get beyond this barrier. Most say, that your product has reached maturity when you have reached 60-75% of the market, and to do that you must get the Early Majority and almost half way into the Late Majority.
Mainstream Adopters
Early Majority
The Early Majority makes up about 34% of the market, and these pragmatists accept change, more so than the Late Majority. This portion of the market is extremely practical and would be most likely to weigh the pros and cons, as well as the cost benefits. This person may adopt the iPhone because of new features or financial benefits.
Late Majority
The Late Majority, similarly to the Early Majority, makes up 34% of the market. These people, in contrast to those mentioned above, would typically wait until the product becomes a standard, to purchase it. Similar to the Laggards, who will be mentioned below, these people will usually come along and buy the product at some point, but not quickly. Considering the iPhone, the Late Majority may decide to purchase it when their old phone breaks or is no longer able to use.
Resisters
Laggards
Laggards make up about 16% of the market. These people are stubborn and
resist new products. They may be older and do not want change or just stuck in their ways. Laggards would only purchase the iPhone if they were to outlaw flip phones. This portion of the market only changes if forced to. My grandfather, for instance, did not grow up using a smart phone, or a cell phone at all. The concept of having access to the internet on his phone is a foreign concept to him, he feels as if he doesn't need it, and will most likely never purchase a smartphone, let alone an iPhone in his lifetime.
SMART Project
If I was to apply the Adoption Curve to my SMART Project: OK To Drive?, it would look something a little like this:
Innovators
Innovators for my product may consists of bars that have encountered lawsuits. These bars have first hand been effected by what our product hopes to solve, so the probability of them purchasing it is likely.
Early Adopters
Early Adopters for OK To Drive? are most likely bigger bars, with more money. These bars may or may not be chains.
Early Majority
The Early Majority might consist of chains, or, as mentioned above, larger bars, that are catching on to what the Innovators and Early Adopters have started.
Late Majority
I believe that the Late Majority are bars that would begin to buy my product when they observe that other bars have it. Because this product is expensive, they would need to have a decent amount of money in their possession, as well.
Laggards
In this case, the Laggards may be small, community based mom and pop bars. These bars usually do no have as much money as chains and larger bars, and may either not think it is necessary or may not afford it. They resist change and like the way that their bar currently runs.
The Product Life Cycle
The Product Life Cycle details the stages that a product goes through, starting with its introduction into the market and finishing with its decline out of the market.
Intro
In this stage, buyers are mainly unaware of the product, as it was just recently launched.
Growth
This is the stage in which the product is growing and rapid sales occur. The price of the product falls as the competition for the product increases.
Maturity
During this stage, sales continue, but at a much lower rate; they increase, but slowly. The Maturity stage usually involves a lot of promotion, as well as competition.
Decline
During the decline of a product, sales begin to drop off, as buyers shift to newer or more advanced products. Maybe, the product was based on a trend, and the fad quickly went out of style. In this case, the life cycle of the product would be very short, as opposed to that of an iPhone.
There can be some variations of this life cycle, though. Take the iPhone for example. Rather than the whole product and Apple Brand declining, one version of the iPhone may. Very few people still use the iPhone 4, because the features are outdated and most apps and programs require an updated software or new version of the product. We can say that this product is most likely in the decline stage. However, that does not mean that the iPhone is in decline, just that particular version is. The iPhone itself is well established, and probably in the beginning of the Mature stage. The newest iPhone version and their latest release, the iPhone 7, may still be in the Growth stage, though.
We can also classify the iPhone as a disruptive innovation(when it was first released in 2007). While in the growth stage, this new product killed three very prominent industries at the time. MP3 Players, Cell Phones, and PDA's quickly declined as the iPhone grew dramatically in sales.
SMART Project Survey
This past Tuesday, each SMART Project team narrowed down their survey questions to the ten most important. For our project specifically, we decided to focus on how likely the bar would be to use it and what problems they foresee occurring in relation to our product. We, though, are running into problems regarding this step in the marketing research process. Since none of the members on my team are of legal age, we cannot go to the bars to ask the managers these crucial questions. Instead, we may have our marketing consultant(who is 21) aid us in this process. Our other option is to create a new survey gaged toward the customers at the bar, rather than the bar itself. We would then ask bar-goers of all demographics their opinion on our product. Our SMART Project survey for bar managers can be seen below.
Have you ever encountered legal issues involving drinking and driving at your bar?
Do you think that this product would eliminate/diminish the hazards of drinking and driving in your area?
In what ways do you think that this product will affect your image?
How much would you be willing to pay for a product like this?
Would you be willing to reserve a space in your bar for this innovation?
Some customers may be dissatisfied with having to give up their keys…
Would you be willing to sacrifice customers for safety?
How would you enforce security provided by this product?
Would you be willing to hire employees to oversee this product?
In what ways could you make consumers more accepting of this product?
- What problems do you envision being associated with this product?
These questions will hopefully help us better understand our target market and how they stand on our product.
Emily Elliott
