Innovations, Adoption, and Product Life Cycle in Marketing

What are the three types of product innovations based on novelty?

Continuous, dynamically continuous, and discontinuous innovations.

What characterizes continuous innovation?

Limited effect on existing consumption patterns; most product innovations.

Give an example of continuous innovation.

Huggies swimmer pants or hybrid cars.

What distinguishes dynamically continuous innovation?

Pronounced effect on consumption patterns, often involving new technology.

Provide an example of dynamically continuous innovation.

Cell phones compared to landlines.

What defines discontinuous innovation?

Completely new products that consumers have never encountered before.

List examples of discontinuous innovation.

Airplanes, computers, televisions.

What percentage of new U.S. consumer products fail?

95% of new U.S. consumer products fail.

What are common reasons for product failure?

Ignoring unfavorable market research, overestimating market size, marketing mix errors, and stronger-than-expected competition.

What factors contribute to the success of new products?

Strong relative advantage, understanding customer needs, higher performance-to-cost ratios, and strong management support.

What does diffusion refer to in the context of product adoption?

The percentage of the market that has adopted an innovation at a given time.

Describe the S-shaped diffusion curve.

Slow initial adoption, rapid growth, then slows again; linked to higher risks.

What is the exponential diffusion curve?

Adoption starts quickly and then slows, typical when there is little risk and low switching costs.

What are the stages of the adoption process?

Awareness, Interest, Evaluation, Trial, Adoption.

What is the high-effort hierarchy of effects?

Consumers think carefully, gather information, form attitudes, then adopt, common with risky innovations.

What characterizes the low-effort hierarchy of effects?

Consumers put in limited decision effort, may try first, then form attitudes, common with continuous innovations.

What are the categories of adopters based on the timing of adoption?

Innovators, Early Adopters, Early Majority, Late Majority, Laggards.

What percentage of adopters are classified as innovators?

2.5%.

What is the primary strategy during the introduction stage of the product life cycle?

Create awareness and trial; use cost-plus pricing and heavy promotion.

What happens during the growth stage of the product life cycle?

Rising sales and profits; strategy focuses on maximizing market share.

What is the focus during the maturity stage of the product life cycle?

Maximize profit while defending market share; diversify brands and increase promotions.

What strategy is employed during the decline stage of the product life cycle?

Reduce costs and milk the brand; phase out weak models and cut prices.

How do the adopter categorization model and the product life cycle interact?

Adopter groups fill in each PLC stage over time, with innovators and early adopters in introduction, early majority in growth, late majority in maturity, and laggards in decline.