4.3+Product

= 4.3 Product = _
 * Steve Job quotes on PRODUCT **
 * You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new.
 * We're gambling on our vision, and we would rather do that than make "me too" products. Let some other companies do that. For us, it's always the next dream.
 * You have got to start with the customer experience and work back towards the technology (product) - not the other way around.
 * The Japanese have hit the shores like dead fish. They're just like dead fish washing up on the shore : [referring to Japanese //rival products// of course]

__ ' __ Product' is part of the 'Marketing Mix' which, together with 'Research' make up the process of 'Marketing'. Firms may sell a product at very similar prices, at similar places, using similar promotion - but get their customers to choose them over their rival because their Product has something a little different.

EVERY firm sells a product - sometimes this 'product' is a SERVICE sometimes it is a GOOD.

Every product will have various 'features' & 'dimensions' and it is with these that firms [i] differentiate their product from their rivals, and [ii] meet their customers needs/wants

Features - refers to the characteristics of the product eg size, colour, smell, weight, texture, country of origin, etc

__**Dimensions**__ (sometimes referred to as 'methods of adding value') are divided into 2 groups - functional value & emotional value.
 * __Functional__ is what do they actually do - eg 'satisfy your hunger', 'protect your head from the sun', 'transport me from placeA to placeB' etc
 * __Emotional__ is how do they make me feel - proud, safe, cool, exclusive, welcomed etc

//..............and in fact it is possible that a product gets its dimensions from its features.//

Take the __** humble apple **__, [//the not-so-humble Apple would work too//] :
 * Its __features__ would be colour (green, red, yellow), size (bigger v smaller), texture (crunchy, spongy etc) taste (sweet, tart, juicy) etc
 * eg The size of the apple (eg bigger) would then help it achieve its __functional dimension__ of 'satisfying hunger'
 * eg The country of origin (eg South Africa) might then help it achieve its __emotional dimension__ of self-satisfaction because the consumer has 'helped an LEDC develop its economy by purchasing their product'

Understanding 'Product' related terminology

 * __**Product Line**__



A variety of 'different versions of the same product', with the intention of producing a version for each different segment of the same market - and therefore meeting their needs //better,// generating loyalty and maximizing sales. Above are 4 versions of Colas - one for the traditionalist, one for the female sugar-conscious consumer, one for male sugar-conscious consumer (which they briefly branded as 'Bloke Coke') - & the 4th CocaCola Life? I don't really know!. Similarly Lays produce various versions of their Crisps for different taste preferences.

The variety of 'different products', with the intention of producing a product that meets the needs of different markets. Building on their brand image they enter a variety of markets, thereby reducing reliance on any //one// market, and also maximising sales.
 * __**Product Portfolio**__ (or Product Mix)

All the Product Lines of the Product Portfolio. In the images above Fanta, CocaCola & VitaminWater would be the Portfolio, while .......... would be the lines of the Portfolio - and all together they are the 'Range'. //You can fill in the blank right?!// If you didn't already know it, all the products above (plus many more) are owned by the same company : Coca Cola.
 * __**Product range**__

These are products aimed at private individuals who will use and consume the product for their own private purposes. (Compare it with 'Producer Products' defined further down) Whether a product is 'Consumer' or 'Producer' has a big effect on //all// the Marketing decisions - but especially Promotion. //Can you imagine why this is the case?//
 * __**Consumer Products**__

Consumer Product can be further defined - and again which classification they are in will have an impact on the Marketing decisions made


 * __Fast Moving__ : everyday convenience products that are purchased and consumed rapidly and regularly. Usually low price and low profit margins - //can you figure out why?//




 * __Perishables__ : Products that have a short life. They may rot, dissolve, fade, decay, rust etc quickly. Their prices varies according to season, fashion, etc etc, but usually a fairly high profit margin exists. Disposing of unsold/unused 'perished' products can be costly & difficult
 * __Durables__ : These are products that have a long life - and are usually high priced, and the customer will take their time, and think carefully when buying one. They will therefore be purchased __in__frequently. Examples include 'white' durables such as washing machines, microwaves & 'brown' durables such as TVs and games consoles. Do not worry if you are unable to classify a durable into white or brown : its not a //vital// piece of knowledge to have. The challenge to firms that sell durables is this - //'the better we make our product, the longer the wait for a re-sale.'// . So how do firms go about solving that problem? There are some ethical ways - and some not-so-ethical ways - and some ways that are just downright illegal. // Can you think of some for yourself? //


 * __Luxury__ : these are products are very exclusive and very expensive. They are bought for their exclusivity. They may be perishable (eg champagne, caviar, truffles) or durables (eg Ferraris, Rolex etc). The customer will usually be quite knowledgeable about the product and have a high emotional attachment to it. It will usually be inelastic to a price increase, however there is big pressure on the firm to mantain that air of 'exclusivity' - once lost it is very difficult to re-gain.

These are products that are purchased by Businesses. They are purchased to help with the production process. Usually purchased in large quantities, there is less emphasis on the 'emotional' dimensions and more on 'functional' ones - //could you explain why?// Many of the other marketing decision will be slightly different too eg. Prices are often discounted, and paid for on credit
 * __**Producer Products**__ (aka Industrial Goods)

....................................

It is important when tackling a Case Study that you understand what type of good is being sold.
[a] So that you can use the right terminology and impress the examiner [but this is a minor reason] [b] You can apply the correct strategy and recommendations. .... Eg **where** a product should go in a supermarket. A Fast Moving product would go in a very different place to a Luxury product. The former might go close to the Check-out, the latter might have its own specially designed area at the back of the supermarket. Could __you__ //explain why// this might be the case !?

Right so that's the key terms explained.


 * NEW PRODUCT DEVELOPMENT **

Few products remain popular by staying the same - it is NOT impossible that they do - there is a reliability and predictability attraction - a kind of 'classic' nature that can be gained by staying the same - but it is RARE. Most products, if they remain the same, go out of fashion, get overtaken by rivals, become obsolete. The 'Computer Mouse' : original ......... & ....... one version of an updated one The 'England Captain Hair Cut' : Kevin Keegan 'Perm' & David Beckham 'Skinhead'

And two of my favourite examples of firms who were once dominant, but failed to 'develop' their product and were replaced by more innovative rivals.

Gibbs __toothpaste__ were once the main rivals for Colgate, and in fact for decades did innovative - going from tin to tube ( although Colgate were the first to go into tube - back in 1896!), introducing new flavours, re-branding etc - but then ran out of steam and lost their share to the likes of Colgate - and newcomers Close Up.

The first two photo show the Hoover __vacuum cleaner__ - once so dominant that people didn't call a vacuum cleaner, a vacuum cleaner - they called it a hoover. Hoover even become a verb : "Have you hoovered your carpet yet?". To be fair to Hoover they did actually innovative their product, but slowly - as a patent protected them from competition this slow innovation was fine - until the patent ran out. Then Dyson (third image) joined the market with new and better ways of vacuuming. Now Dyson controls the markets, and Hoover is all but disappeared.

Despite the need for development and improvement, research shows that only **one in ten** new products succeed (Matt Haig, Brand Failures). !!

So firms are caught between //needing to spend// money on developing your product - and //not wanting to risk// money on costly developments that might not be successful.

There is a slight difference between (a) tweaking an existing product - changing the color, the ingredients, adding a feature, a new route etc - and (b) inventing a new product : (a) is less risky, but the rewards are smaller while (b) is vice-versa. However both (a) & (b) are part of 'New Product Development'

Tom Peters developed a model that looks at how to gain this competitive advantage and keep your product up-to-date. He called this '**Sources of Added Value**' and said there were 4 sources.... Google it for more information.
 * 1) Raising
 * 2) Creating
 * 3) Reducing
 * 4) Eliminating

These sources for inspiration can be **tapped** in various ways.
 * A. Staff ideas
 * B. Research Customers - especially the devoted followers
 * C. Benchmark Rivals
 * D. Co-operate with Suppliers, & of course
 * E. your own Research & Development Department (if it exists)


 * //An example of method C//**. : AirlineA did them first (//using method B//) - but it was just one film projected onto a central screen. Then airlineB copied them but put screens onto seats. Then airlineC joined in but gave customers a range of films so that they could choose their own.... etc

The __**process**__ of Developing a New Product can vary, but generally these are the steps taken ....
 * 1) Research
 * 2) Testing the Product *
 * 3) Preparing the Market (Feasibility Study) *
 * 4) Launch


 * //* what activities fall into which step can vary, but between these 2 steps you will do things like ensure governmental standards are met, that all functions work, that customers want and understand the product etc//**
 * //* * there can sometimes be a 'test launch' before a 'full launch', perhaps in a selected city for example before going nationwide. A 'soft launch' is becoming quite common too, - google it to see what this means. It has various meanings.//**


 * Remember Al Pacino's character and the 'launch' he was preparing for his hotel in the film Oceans Thirteen?**

__Products have a LIFE CYCLE**__ There are many different versions of the P.L.C. - all tell a similar but slightly different story. For IB purposes learn the 6 stages of : 1. R&D, 2. Launch, 3. Growth, 4. Maturity, 5. Saturation, 6. Decline
 * Products - like people - have a life span - and - like people again - have different characteristics and so need to be treated a little differently according to what stage of their life they are in.**


 * [[image:http://mamikikeyu.files.wordpress.com/2011/04/lifecycle.png width="282" height="235"]] || This is a basic version of the PLC.

Note the red line does not appear until the Introduction stage. This is because the y axis is 'Sales'- and at the Development stage no products have been sold yet.

Think of the Development Stage as similar to the human being, being in foetus stage : still in its mothers womb! || It also has a different y axis - though again at the 'concept creation'stage there is no growth so the line is horizontal.
 * [[image:http://www.marketing91.com/wp-content/uploads/2011/01/productlifecycle.gif width="338" height="243"]] || This has the same 5 stages but names them differently.

It does introduce an interesting idea in the final stage - where it show the product one of two things. (i) either falling - and it calls this Harvesting. The Firm realizes there is not really any way to develop the product and so sells what it can before 'dying'. (ii) continuing to rise - this is called 're-inventing'.

Re-inventing can done via '**EXTENSION STRATEGIES**'. This gives an old product a new look - could be eg restaurants changing the decor, chocolates adding an ingredient etc etc. Typically all strategies come form 5 sources (see below) ||
 * [[image:PLC.JPG width="333" height="210"]] || This is a PLC applied to a particular industry (Electrical Goods) - a few years ago, though ti is seldom necessary to be precise with the x axis. It also has 2 lines, as the y axis is double labelled.
 * [[image:PLC.JPG width="333" height="210"]] || This is a PLC applied to a particular industry (Electrical Goods) - a few years ago, though ti is seldom necessary to be precise with the x axis. It also has 2 lines, as the y axis is double labelled.

You will notice VR (Virtual Reality) is not yet profitable.

Products get a different marketing treatment according to their stage. eg a Black & White television ( yes even in 2012 they are still being sold in some parts of the world - especially small pocket sized ones) will have very little promotion and probably very cheap, where as Electric Cars are still being hyped by car companies and the prices to customers and costs to firms are high. || Linked to the Product Life Cycle is a //__Product Diffusion Curve__// - this identifies the //type of customer// that buys a product in each of the different stages. This will be looked at more in Unit 5.6


 * The 5 sources to extend your products life**
 * 1. Price Reductions

.. || //( no image required !)// || Old 'Swatch'..........................& ................. Redesigned Swatch || Repackaged & slightly re-designed ( note the "Fortified with...") || Spice Girls : In UK mid-90's & in Japan (Pepsi-sponsored Tour) late-90's || Rowan Atkinson (as Agent Richard Latham) & Barclay Card * || //- * of course Promotion is not limited to being an extension strategy - firms will promote heavily at their Introduction too for example, + Coke & Pepsi are in maturity but that doesn't stop them spending millions on Promotion every year - but HOW you promote will differ. [|This advert] (1995) is focusing on a new feature that BarclayCard has introduced.//
 * 2. Redesigning || [[image:Product Swatch.jpg width="308" height="242"]] [[image:http://mirror80.com/wp-content/uploads/2012/05/Pretty-Bohemian-Swatch-Watch.jpg width="188" height="248"]]
 * 3. Repackaging || [[image:http://beatlestrivia.com/wp-content/uploads/2009/08/kelloggs-corn-flakes-good-morning-beatles.jpg width="210" height="293"]] [[image:http://4.bp.blogspot.com/-iHEHtobUDYU/T54KR939_aI/AAAAAAAAAC8/ACtepJjHgZg/s1600/cornflakes.jpg width="223" height="319"]]
 * 4. New Markets || [[image:http://media.onsugar.com/files/ons1/286/2862078/27_2009/9180511dfff63fd6_spice_girls_retro.jpg width="184" height="250"]] [[image:http://1.bp.blogspot.com/-A7Bx3WJFqM8/T39tj0u7c3I/AAAAAAAADhE/T1dUyfobFRc/s400/tumblr_luc6v5cXQ91r5tfdno1_400.jpg width="246" height="256"]]
 * 5. Promotion || [[image:http://i.ytimg.com/vi/f2FE3b5XGCo/0.jpg width="353" height="180"]]

A short video that is kind of an extension strategy for **Coca Cola** in **El Salvador**, as it is changing the design/packaging, in a way - and it is also looking the importance that Coca Cola put on its own ** brand ** - a subtopic of Product that we will look at soon.

media type="youtube" key="wu7kBdECu84" height="315" width="560"

.. and of course as IB students you could be asked to manage a Case Study where a product is eg in decline - and you should be able to have an idea of how to extend its life span.

The truth of the matter is that many of the bigger firms will find that different products from their portfolio are in fact in different stages. PepsiCo owns both KFC and PizzaHut. Now in //might be// that PepsiCola is in maturity and KFC is in decline - and PepsiCo top management need to understand that they need different strategies for their different products.

The most useful tool to group products with similar characteristics is called the ** Boston Matrix .** They don't use 'time' and 'sales' as the variables like the P.L.C. did - they use.... Note that firms have more control over the 2nd variable - only firms that are monolplies can really affect the 1st one. The 1st one is largely determined by external factors
 * 1) Market Growth (//which looks at the nature of the entire market in which the firm operated- is it shrinking or growing//) ,
 * 2) Market Share (//how much of the market is owned by the firm//)



So with this 2x2 matrix we find all products can be one of four things - remember that the purpose of this Matrix is to identify the characteristics of our product so that we can **manage them in different ways**.

A __**DOG**__ is a product that is operating in a market that is stagnant, with very little growth (possibly, but not necessarily even a shrinking market) - not only is it a frustrating market but the product itself has many rivals and doesn't command a high share. So DOGs have a small portion of a weak market. Not good! A __**CASH COW**__ is a product that operates in the same kind of market as a Dog. Maybe shrinking, maybe stable, at very best its 'growing slowly' - not a great market to be in however it does command a high share of this market. CASH COWs are the dominant product in a weak market. Not good - but not terrible either. A __**STAR**__ is a product that is growing rapidly in sales and is in a market that is thriving. Only good things seem possible. A very different type of market to a Cow & Dog. Its a Cow operating in a good market - in fact its not a Cow - its a Star!! This is the product that is making you a winner! A __**QUESTION MARK**__ ( or PROBLEM CHILD). So much potential yet not producing much. Its a Dog in a good market. The fact its in a growing market suggests this is a product that can earn good sales, but at the moment it is being dominated by its rivals.

So four types of products - and the first step for managers is to identify what types of product each is from their range. The second step is then to devise an appropriate strategy for each.


 * [[image:http://www.theadvisoryfirm.com/bcg.jpg width="350" height="330"]] || **Dogs** - should be __liquidated__, or divest. Its a weak product in a market goign nowhere, spend no more money on it. Cancel your marketing budget, sell what you can and get out.


 * Problem Childs** - Look at them closely. I fyou think your product can grow then __invest__, run some promotion, build the profile, its a good market try capture that extra market share. If you think the competition is just too strong, and despite the fact its a good market, your product has flaws and cannot compete + the big boys will be watching you and could crush you if you make a move - don't waste your money : __disinvest__


 * Star** - It might depend on your predictions on how the market will be in the future. Very few market grow forever. When the market levels out you want your product to be a Cash Cow - so invest, strengthen your position, build brand loyalty.

|| An example found online. It is identifying the 'sources of finance' used by a Charity.
 * Cash Cows** - There is little point in extensive marketing as the market is stagnant & you won't be able to affect the entire market. Normally some marketing will be necessary though - to maintain brand loyalty, to hold on to your share your position, to __defend__ your position. ||

Clearly they feel that more and more individuals are willing and able to make significant donations. A case of : its easier to raise $1000 by getting just 1 person to give a $1000, than 1000 people to give $1each. Thus they see the 'major gift appeal' as something that is increasing successful.

Their 'major gift appeal' is one of the better ones out there in relation to rival charities - although it would seem that (judging by the size of the circle) it doesn't yet make up a very large portion of this particular charities total funds. ||
 * [[image:http://www.ventureitch.com/wp-content/uploads/2008/11/adanalysis.jpg width="313" height="349" align="center"]] || Another example found online by a firm that was advertising its product via Google Adverts. It shows how Google Adverts had a different affect on the different products in his Portfolio.

Note he has changed the axis' to fit his purpose.

'Elasticity' in this case means how do sales respond to an increase in advertising: more adverts = large increase in sales = high elasticity more adverts = little increase in sales = low elasticity


 * some adverts might lead to no increase in sales, they are not considered.
 * some might lead to an increase in 'sales', but not 'profit' - this is considered in the next axis

In the case of 'Stars' he believes that adverts are leading to an increase in sales - but not profit. Hence he suggests [1] re-plan the advertising campaign (maybe so its less expensive or more effective) or [2] increase the price, assuming the advert will make it insensitive to a price increase.

Point being - different strategy for different products. ||

__BRANDING__
There is a lot confusion as to the exact meaning of branding - here are 2 definitions i have found


 * A ** brand ** is a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers." (from wikipedia)
 * A ** brand ** is "a mixture of tangible and intangible attributes symbolized in a trade mark' (from Interbrand)

They are not that dissimilar as........
 * what is __trademarked__ is a //name, term, design// etc
 * and it is these (__in)tangibles attributes__ that often help //distinguish one seller from another//

You might often hear managers talk about //'what customers think about our brand//' and they are forever trying to get '//brand loyalty from their customer//'

Whatever came to mind might be the intangible atrributes that the respective brand has.
 * What associations, words, ideas, emotions come to mind when you think about, hear the word, or see the image of .. ??**
 * ** Pepsi ** goes for : cool, daring, adventurous, humorous, rebellious
 * ** Coke ** maybe : Traditional, cold, refreshing, family, fun, reliable


 * Pepsi ** have trademarked the name, patented the design and that is part of the brand - but so is the //emotions// it evokes.

A brand is certainly worth money. There have been cases of firms with no physical assets selling for large sums simply because of the value of the brand. There is a good argument to say FirmX is the stronger Firm - as the new owners of Firm X will need to spend less money on promotion and when they put the brand on their products people will buy their products because of the positive association they have with the brand.
 * If FirmY has assets such as machinery, stock etc but an unknown brand
 * & FirmX has no physical assets but a brand that people associate with 'quality'.

**The advantages of having a strong brand - to which customer are loyal**
Its worth clarifying 'brand loyalty' - this is when customers will continue to prefer your product over your rival due to the positive associations they have with your brand.
 * You can charge higher prices
 * //and be inelastic to a price increase//
 * Creates barriers-to-entry for potential rivals
 * //as they will have to spend large amounts of money to persuade customers to leave your brand and move to theirs.//
 * Allows you to extend your product portfolio.
 * //A firm can create a enter a market in which has no presence - however if it puts its brand onto the product customers will carry over the association. eg Microsoft enters the car market. Customers would expect the Microsoft car to be a decent one because the Microsoft brand is strong - and if CustomerX is a Microsoft and Mazda fan he might purchase a Microsoft car if his loyalty to Microsoft was stronger.//
 * //A firm can enter a new national market and enjoy some brand recognition. There was a factoid being passed around in the 80's that Coca Cola had established themselves as the No1 soft drink in Mali - before it was even being sold in the country!! Malians had seen the brand in films, in neighboring countries etc and so of course when it arrived it was readily accepted by customers.//

**How to create a strong brand?**
Easier said than done! All firms want a strong brand - usually takes time and money, and is created by consistently wise marketing decision. Lots of examples which fall under the general idea of '//run your business well//'
 * Sponsor events,
 * Have a good product,
 * Don't overcharge,
 * Treat your customers well,
 * Create snappy adverts
 * Look after the environment
 * etc etc

Some branding terminology

__**Brand Names**__ : Choosing the tangible attributes of a brand is not always easy - and inspiration can come from sources..
 * **Coined Brands**: these are made-up names. eg Google, Haagen Dazs & PrittStick
 * Allows flexibility & originality but can be difficult to promote as little or no pre-existing ideas to build on
 * **Bona Fide**: use pre-existing words that are recogniseable eg Caterpillar, Captain Birdseye, British Gas
 * Easy to remember, can tap into pre-existing associations but difficult to trademark and protect. I once stayed in a small little seaside Hostel called 'The Tsunami' - on my return a few years ago the Hostel was still there but it had re-branded!
 * **Acronyms**: Like BMW, BBC, HSBC
 * Pick this method if its easy to remember - acronyms are found to be suggestive of quality and formality, as well as being playful - just pick the right acronyms
 * There are also **Numbers** (eg Boeing 707 - sounds formal & reliable), **Personal Names** (eg Trump - make it seem more personal and approachable) and **Place Names** (eg London Museum - builds on the reputation of the place)

A Brand may have a slogan attached - and while the slogan can help build the brand image, adn of course the slogan can also be legally protected it is not usually considered to be part of the brand - strictly speaking eg

Nike is the brand, even the 'swoosh' could be considered to be the brand, but 'Just Do It' is the slogan. Not that IB examiners should be too picky on this minor point.

__**Types of Brand**__


 * **Family** - Marketing a range of products under the same brand. The idea of that all products under the same brand will have the same quality - this works well if the brand image is universally strong, however it works in reverse too : if one product gets bad image, all the other suffer too. (see the Virgin example above!)


 * **Product** - the alternative to Family Branding. A firm has a wide portfolio but chooses to market each product under their own name. Unilever is an example which owns all of the products below, as is BMW which owns the MiniCooper
 * **Own-Label** - typically created by Distributors such as Supermarkets. It is their version of better-known manufacturers brand eg Tesco ( a leading UK supermarket) will have its own Spaghetti as well as Heinz Spaghetti. The idea is also kind of linked to the concept of 'no frills'. Heinz will charge more because they promote more, but if you as a customer don't want to pay for the promoting you just want to pay for the product then buy Tesco's own label. In an ironical move they are saying 'buy us for the pure functionality of the product' - don't waste money on the emotional dimensions, they're not real - just created by marketers. The irony of course is that in doing it they are trying to create an emotional elements of their own : Buy us //if you're strong enough// to ignore the marketing tricks of our rivals'
 * __Disadvantage__ is : Manufacturers spend large amounts of money creating a brand image for a reason, - and they do it well and some customers will never switch to an own-label brand, believing it (rightly or wrongly) to be common and poorer quality - so it only works with some products.

___
 * **Manufacturers** - most Manufacturers do NOT sell direct to the consumer. This lack of direct contact with the consumer can worry them - they worry that in some way the 'intermediaries' will do something that will ruin the product - damage it, try produce cheaper imitations, provide poor customer service when selling it, allow it to get dirty, associate it with some other lesser product by placing it next to it, selling it in a unsafe environment .. whatever. So they insist on displaying their brand very visibly and then do separate promotion. So if customers see their brand misrepresented in any way they blame the retailer and not the brand. eg Heinz, Nokia, Microsoft

PACKAGING
Sometimes referred to as its own separate P (usually in cases where an author might refer to "the 8 Ps'" ). The IB syllabus refers to 7 Ps, and files Packaging under 'Product'

Packaging essentially should serve 2 purposes. The extent to which it focuses more and one and less on the other will be a decision for the Marketing & Production Managers to liaise on.

Purpose 1 : protect the product Purpose 2 : attract the customer

......

__Purpose 1__ : the product needs to be kept clean, fresh, in tact etc and packaging is key to achieving this. Good packaging can give the protect extra shelf life, allow it to be shipped further distances in more difficult circumstances. It can be key to expansion plans that include transportation.

__Purpose 2__ : customers can be attracted to the product because of its packaging in a variety of ways - it may simply look funky, and make the customer smile. It may serve a dual purpose too for example, the package, after original use converts to a rubbish bin, or hat or clothes hanger after its been used. Whatever the way, a good package can convince a customer to buy a product they would otherwise ignore.


 * and of course here is Coca Cola, trying to do something with their packaging : aren't they just a wonderfully socially responsible firm !?

https://www.youtube.com/watch?v=M1d8ePXioIs


 * You as potential future business managers and IB students should know the dis/advantages of each brand type - and therefore which to recommend. **

_ this 'curve' has been taken off the syllabus, so is left on the page just as //extra resources for the curious//

Link between Product __//**& Innovation**//__

It is widely believed that it is possible to identify the different types of people who purchase an innovative product. A certain type of person buys it when its very new (exciting, risky) - and a different type of person buys it when its much older (more known and established).

It is also been possible to establish the percentage of people who will typically buy a products at its different 'age' - you get the.......

The core idea is that you need to tailor your marketing strategy to the different groups. When the product is just being launched (when the Innovators are buying it) you might market it differently than if its been in the market for a while (when the Laggards are buying it). In fact it has been observed that some innovation never gets beyond the Early Adopters - there never is a Early Majority. It is tried by those who like new shiney things - and then abondoned. The business terms for this is borrowed from Geography and called the 'chasm'- some products never cross the chasm.



An idea exists (stated directly above) that firms need only concentrate their marketing on the first 16%. They are the 'opinion formers' : their word-of-mouth recommendation will convince the remaining 84%



Here the key characteristic of each market segment are identified. Notice how the the first 16% are identified as Leaders. They influence others. They don't necessarily lead in all things - just in innovative, technological matters : they __could__ in fact be Geeks, its only their opinion on innovation that matters to their peers. But then this is an 'Innovation Adoption Curve', and in this context they are the leaders - so focus your marketing on them.

__Final clarification : between Brand, Company and Product__ __Product (=Headache Drug), Company (=Bayer), Brand (=Aspirin)__