DESCRIBE THE FIVE TYPES OF CONSUMER INNOVATION MODEL AND EXPLAIN IT WITH THE PRODUCT LIFE CYCLE (PLC)

BARBARA AKUFFO

ADVERTISING ASSIGNMENT

LEVEL 300 TOP UP

29/NOVEMBER/2011

DESCRIBE THE FIVE TYPES OF CONSUMER INNOVATION MODEL AND EXPLAIN IT WITH THE PRODUCT LIFE CYCLE (PLC)

A consumer is one who purchase or uses a product for personal use. The consumer makes the decision whether to purchase a product or not, they are usually influenced by marketing and advertisement. Innovation is introducing something new to the consumer. The change must increase consumer value, product value. The consumer innovation model becomes the consumer adoption of a new product. Here something new is introduced to the consumer, this change may increase vale to the consumer. The innovation goes through process which is the product life cycle to create awareness for consumers to adopt it for growth in the economy.

The consumer goes through adoption level this is very important because some may adopted it as soon as it becomes available, some also take their time for some to use it, also we have last minute consumers they consume the new product at the last. The product diffusion model is constructed to bring out the types of consumer innovation.

In the adoption level there are five stages that are affected by the consumers they are the innovators, early adopters, early majority, late majority and laggards.

Firstly, innovators are risks takers; they are willing to try new products or services without any experience. These groups of consumers usually have money to take those chances and they have high Education Level. They are the first to try new goods, services, ideas and process because they are attracted to change, new experiences, this group of consumers are usually 2 % of the population. Example is a rich man getting a new phone that is iphone. Under the introduction stage of product life cycle a new product is introduced in the market, here the advertisement should show the quality of the product, service and its features. At this stage innovators are willing to purchase that product because they have prepared their mind for change.

Secondly, early adopters usually take 13.5% of consumers because they make their decisions based on the positive response from the innovators. Early adopters are educated and are likely to pay more for the product. They have premium of using the product which improves efficiency, reduces cost and their social status. Most companies rely on the early adopters for feedback. Example is a consumer buying a techno phone based on the experience of the innovator. Under the growth stage in the product life cycle there is a rapid growth, here awareness campaign and education with strong message to ensure success of the product. Here the early adopters adopt the product for consumption and the campaign messages are formulated to guide the decision.

Thirdly, early majority is the third type of consumer innovation; these groups of people are very careful and try to avoid risk. They represent 34% of consumers; they rely on recommendation from others who have experienced it. They wait to see whether the new product on the market will successful. This group are often less educated and social mobility than the innovator and the early adopters. The maturity stage under the product life cycle, advertizing needs to be maintained so there should be price reduction and promotion to encourage, here the growth may be slow so it is important to give back to the consumer.

Fourthly, late majority represent about 34% of consumers. this group of people are older and less educative than the other groups except laggards. They acquire a product only after it has become common in the market, they are usually forced before they adopt a new product or service this group are below average socioeconomic status who are not influenced by advertisement, they rely only on recommendation from friends and relatives who can force them to adopt to change. Looking at the product life cycle at this stage in the consumer life, here saturation stage is very important because the adverts being aired must remind the consumer about the existence of the product also sales promotion helps at this very stage because late majority are very skeptical in acquiring a new product.

Fifth type of consumer innovation are the laggards, this people dislike change so they don’t usually adopt to change. They prefer their old brand they usually go with the tradition goes on. They change their mind only when they don’t get some of their old product on the market or when they are forced to adopt to change. They fall under the low socioeconomic status that will depend on friends and neighbors for their information. These groups of people represent 16% of consumer who will not likely go for new product. The last stage under the product life cycle is the decline stage, here the volume of sale decrease because laggards groups of consumers donot want new things it makes price and profit decrease. Advertizing need to be renewed because most consumers in this group are not ready for change like the laggards they are affect sales to decline in product.

All products have a definite life cycle so they need to go through stages which new approaches should be given to each stage. Under the consumer innovation curve they are responsible for  the product life cycle because their attitudes at different stage affect the decisions made in the product life cycle.

RERERENCE

QUICK MBA MAKETING (Knowledge to power Business)

BUSINESS DICTIONARY.COM

WEBFINACE INC.INVESTOR.COM

MANAGEMENT UPDATE.INFO

                                                                                               

DISCUSS THE TWO MAJOR CATEGORIES OF CONSUMER IN THEIR CHARACTERISTICS IN THE CONSUMER MARKET AND BUSINESS MARKET. THE MINOR NEW PURCHASE, MINOR OLD PURCHASE, MAJOR NEW PURCHASE AND MAJOR OLD PURCHASE

BARBARA AKUFFO

LEVEL 300 (TOP UP)

22/NOV 2011

ADVERTISING ASSIGNMENT

DISCUSS THE TWO MAJOR CATEGORIES OF CONSUMER IN THEIR CHARACTERISTICS IN THE CONSUMER MARKET AND BUSINESS MARKET. THE MINOR NEW PURCHASE, MINOR OLD PURCHASE, MAJOR NEW PURCHASE AND MAJOR OLD PURCHASE

A consumer is the one who buys goods or uses service for consumption. A consumer shows wiliness to obtain goods or services from a supplier with the aim of paying for. The consumer or the buyer is always right, they are very important in our business because they help the business or company to grow. Consumers should always be the number one priority of the organization because the activities of the company revolve around them. The consumer can make and unmake an organization because they offer indirect advert to people who are yet to buy goods or services. Example is users of MTN network, so it must be a priority of MTN to handle them with care.

 Consumers are divided into two main categories which are the consumer market and the business market. In the consumer market, individual and household purchase goods and services for their own consumption. They fall under a very large part of the buyers because they use the goods and services personally. Business market entails organizational entities that purchase goods and services for the use in production of other goods or services for the purpose of reselling or renting to others for profit. Before a consumer purchase a product or a service, he or she is influenced by his or her behavior which entails recognizing a problem that needs a particular product or service for consumption. They then research into the value of the product.  They also check for alternatives, assess and then make decision to consume the product.

The consumer market is characterized by certain values which influence their decision making. Thus:  cultural, social, personal and psychological.

Under the cultural values behavior is defined by social class and group wants. Here they make decision based on which class they belong to and what the group wants. Example, one may be influenced to buy a black berry phone because most banking class are using that phone.

Social deals with the influence by the family and small groups of people, these people go with a particular brand of a product. Here the family has a particular brand they have been using for so many years so they are influence by what the family is used to. They continue the family’s loyalty to a particular brand. For instance if a family has been using medisoft product  and they have learned to trust that brand there is no way their decision will change about the brand. They are guided with the principle of “the tradition goes on”.

Personal values, here consumer is influenced by personal beliefs, age groups and lifestyles.  Guiding principles set for one’ self, groups of people make decision based on what their age mates are going in for. For instance is Tigo network, most student use Tigo because that is the network their colleagues use.

Psychological entails perception they have on particular product which affects purchasing power. Example most product made from china are inferior goods

The business market is also influenced by behavior; the buying situation under business market is straight rebuy, modified rebuy and new tasks. A straight rebuy consumer often engages in straight rebuy of a product and is an attractive group for the marketing efforts of manufacturing companies.

Modified rebuy, the buyer wants to modify product specification, prices, delivery and branding. It involves an additional decision a participant want on both sides.

New task buying is an organizational buying situation in which the organization has had no previous experience with the purchase of a product of kind required. This stage is a very difficult stage for the consumer because there has not been any experience with such products.

In view of the above characteristics of consumer market and the business market, Consumers are faced with purchasing decision to make; there are four types of purchasing decisions:

 Minor new purchase - a new thing is introduce to the consumer but the consumer sees it to be very important in terms of needs, ability to buy or status. This can fall under the cultural values in the consumer market.

Minor old purchase - consumers return to purchase the same old product without the thought of other products. They consider loyalty to the brand; they trust the brand they are using. Social values under the consumer market can be related to the minor old purchase.

Major new purchase, this is where the consumer knows very little or have no experience about the product. This product is important to the consumer. Here the consumer lacks confidence in the decision, the type of decision sometime the consumer goes through is a difficult decision making process. Example is the first time a consumer is buying a car; it is going to be very difficult to choose a particular brand because the consumer will not be familiar with buying of cars.

Major old purchase is also important to the consumer but the confidence level of the consumer is high because they have previous experience in relation to the product. For instance, a consumer purchases a car the second time and the brand here is Toyota, here the consumer’s confidence level is very high because there has been a first experience.

Consumers are influenced by different behaviors so it is important to understand their purchasing decision. The company needs to know consumers trend of purchasing decision to help consumers in decision making and the company grow which is very important in business.   

Reference    

Know this .com                                                

BY WHAT CRITERIA WOULD YOU SELECT A PARTICULAR INTERNATIONAL ADVERTISING AGENCY

BARBARA AKUFFO      1/11 /2011

BY WHAT CRITERIA WOULD YOU SELECT A PARTICULAR INTERNATIONAL ADVERTISING AGENCY

International advertising is seen as a communication process that takes place in multiple cultures that differ in terms of values, communication style, and different consuming patterns. If u wants your product out there in different countries you need to advertise your product out there for the world to be aware of your product. The communication process involves multiple aspects which are affected by media, culture, literacy and languge.Here advertising agency comes in with creativity, planning and handling the adverts and sometimes promotions for its clients with the effort of helping the client to promote its products in the world. In this, to select an international advertising company you must have these criteria to help you get the best agency for the promotions of your products.

First and foremost you need to look at the adverting agencies’ portfolio. To know what they have done in the past here their portfolio gives you the main idea of that with pictures with their creative work from the scratch. Here you will get to know the agencies line of work, their experience in your type of business. Hiring an agency whose portfolio is all about beverage products and your organization is a real estate company, this means you are not at the right place. In other words when going through their portfolio and you realize that they have done something similar you want, it will raise your confidence level which will help you consider such an agency.

Secondly traffic tracking and references (testimonials).Here the agency should be able to give you list of reference of company they have worked for. Even though you have looked at their portfolio and seen the work from scratch. You still need testimonials from companies the agency had worked with in the past; this is done to know if they were able to deliver the exact thing their clients were looking for. How they managed their time and the budget. Even better you can receive recommendation by word of mouth, knowing from another company by mouth about that particular agency will help you make a good choice.

Thirdly the organization need to consider pricing, here what I mean is if your company has a fixed budget to work with then the organization need to look for an agency that will fall within their budget. In this case the company needs to find an agency who will offer a fixed fee pricing structure, if it is structured hourly, prices might go as the job get under way. If the agency has never handled a big budget before and giving them so huge budget they might not be able to handle it, in simple facts they don’t have the experience. So you must look for the agency who can work within your budget.

The forth criteria to consider is competence. An agency that is very good in what they do. Advertising agencies vary from one to the other. If an agency is good in one particular service,it does not mean they are good at another. Agency that is good in graphic advertising does not mean they will be good in TV adverts that are why the agency that you chose should be good at what you seek in other to get your message across.

The fifth to consider is the large and small agency. A huge agency may not give you the personnel attention that you want, especially if you are a small business, they may have the resources and the personnel that cannot be found in the small agency, the big agency can also offer discounts for client which can go a long way to help the company. In other words small agencies may be eager for your business and may offer competitive rates and personnel attention.

The last criteria to consider is understanding of your business, the agency that you have to chose must understand your business. With that the agency can help you make a good advert .they need to know much about your sector or your organization and they need to take an interest in what you do if they don’t it may show that you are not at the right agency.

However to make your business successful in the international front you need a good advertising agency to help handle all aspect of advertising. If  an organization chooses the advertizing agency wisely keeping in mind the above points then the company will be highly visible in a short period in the international world.