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2007 Thomson South-Western
Facilitating the Success of New Brands
Chapter Seven
2
Marcom and New Product Adoption
• Introducing new products is essential for most companies’ success and long-term growth– Forced obsolescence
• New idea and product failure-rate estimated 35-45%
• Marketing communications facilitate successful new product introductions and reduce the product failure rate
3
New-Product Adoption Process Model
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New-Product Adoption Process Model
Three stages of adopting a new product
Awareness Class
Trier Class
Repeater Class
5
New-Product Adoption Process Model
• Variables: free samples, coupons, advertising, and distribution
• Successful introduction of new products requires an effective advertising campaign, widespread product distribution, and extensive couponing and sampling
Awareness ClassDistribution
AdvertisingCouponsFreeSamples
6
New-Product Adoption Process Model
• Variables: coupons, distribution, and price
• Once the consumer becomes aware of a new product, there is an increased probability that he will actually try the new offering
Trier ClassPriceDistributionCoupons
New-Product Adoption Process Model
7
Repeater Class Personal Personal
SellingSelling AdvertisingAdvertising
PricePrice DistributionDistribution
SatisfactionSatisfaction
• Variables: Personal Selling, Advertising, Distribution, Satisfaction and price
• Once the consumer has tried a new product, repeat purchases are largely determined by product satisfaction
8
Adoption Process
Product Characteristics That Facilitate
Adoption
Relative
Advantage
Compatibility
Complexity
Trialability
Observability
9
Relative Advantage
• A product innovation is perceived as better than existing alternatives
• Positively correlated with an innovation’s adoption rate
• Exist when a new product offers:– Better performance, increased comfort, saving in time
and effort, or immediacy of reward– Existing alternatives begin to lose share
10
Compatibility
• An innovation is perceived to fit into a person’s way of doing things
• The greater compatibility, the more rapid a product’s rate of adoption
• Overcome perception of incompatibility through heavy advertising to persuade consumers
11
Complexity
• An innovation’s degree of perceived difficulty
• The more difficult, the slower the rate of adoption
12
Trialability
• An innovation can be used on a limited basis prior to making a full blown commitment
• The trial experience serves to reduce the risk of a consumer’s being dissatisfied with a product after having permanently committed to it through outright purchase
13
Observability
• The product user or other people can observe the positive effects of new product usage
• Higher the visibility, more rapid the adoption rate
• Example –
14
Early
Adopters
(13.5%)
Early
Majority
(34%)
Late
Majority
(34%) Laggards
(16%)
Diffusion Process
• Concerned with the broader issue of how an innovation is communicated and adopted throughout the marketplace
• The process of spreading out• Adopter categories
– Five different type of consumers• Innovators 2.5%; Early Adopters 13.5%; Early Majority 34%;
Late Majority 34%; Laggards 16%
– Normal distribution
15
Objectives
Managing the Diffusion Process
1. Secure sales quickly - rapid takeoff
2. Achieve rapid acceleration- rapid acceleration
4. Maintain sales as long as possible - long-run franchise
3. Secure maximum sales potential- maximum penetration
16
Managing the Diffusion Process
Rapid takeoff can be facilitated by:
17
Managing the Diffusion Process
Rapid acceleration accomplished by:
18
Managing the Diffusion Process
Maximum penetration approached by:
19
Managing the Diffusion Process
Long-run franchise maintained by:
20
Stimulating Word of Mouth Influence
• Impersonal sourcesImpersonal sources: information received from television, magazines, the Internet, and other mass-media sources
• Personal sourcesPersonal sources: word-of-mouth influence from friends, acquaintances, and from business associates
21
Strong and Weak Ties
• People are connected in networks of interpersonal relationships.
Tie Strength
Strong
Weak
22
Opinion Leader
• A person who frequently influences other individuals’ attitudes or overt behavior
• An informer, persuader, and confirmer
• Influence is typically limited to one or several consumption topics
• Influence moves horizontally through a social class
• Generally an Early Adopter
23
Opinion Leaders
Characteristics
• More cosmopolitan• More gregarious• Slightly higher socioeconomics status• Generally more innovative• Willing to act differently
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Opinion Leaders
Market Mavens
Individuals who have information about
many kinds of products, places to shop,
and other facets of markets, and initiate
discussions with consumers and respond
to requests from customers about market
information.
25
Stimulating Word of Mouth Influence
• Positive word-of-mouth communication is critical in the success of a new product of service
• Unfavorable WOM has devastating effects because consumers seem to place more weight on negative information in making evaluations
26
Creating “Buzz”
• The systematic and organized effort to
encourage people to talk favorably about a particular item (a product, service, or specific brand) and to recommend its usage to others.
• Find opinion leaders who can become ‘cheerleaders’ – practice is called ‘seeding’
• ‘Kuchikomi’ the WOM network of teenage girls in Japan – Tamagotchi; the Snuggie
• Guerilla Marketing, Street Marketing, Viral Marketing – all designed to generate buzz
27
Creating an Epidemic
• The law of the few – A few well connected people required e.g. opinion
leaders, market mavens
• The stickiness factor– The message must be memorable
• The power of context– Circumstances have to be just right for the message
to spread.
28
Igniting Explosive Self-Generating Demand
• Design the product to be unique or visible. • Select and seed the vanguard. • Ration supply. • Use celebrity icons• Tap the power of lists – get on a list somewhere• Nurture the grass roots
29
Using the Internet for Creating Buzz
Word of Mouth(eWOM)
Blogs
30
Brand Naming
Brand
A company’s unique designation or
trademark, which distinguishes its
offering from other product category
entries.
31
Power of Brand Name
• Affects the speed with which consumers become aware of the brand
• Influences the brand’s image
• Plays major role in brand-equity information
32
What Constitutes a Good Brand Name?
• Distinguish the brand from competitive offerings.• Describe the brand and its attributes.• Achieve compatibility with a brand’s desired
image and with its product design or packaging.• Be memorable and easy to pronounce and
spell.• Can be trademarked• Consistent in meaning when used in other
countries / cultures
Are these good brand names?
33
Brand name gaffes
34
Brand name gaffes
35
36
Exceptions to the “Rules”
• Some brands become successful in spite of their names
• The first brand in a new product category can be successful regardless of its name if it offers distinct advantages.
• Brand Managers sometimes choose names that are intentionally meaningless at inception, like “Lucent Technologies.”
37
The Brand Naming Process
Step 1Step 1: Specify Objectives for the Brand NameStep 1Step 1: Specify Objectives for the Brand Name
Step 2Step 2: Create Candidate Brand NamesStep 2Step 2: Create Candidate Brand Names
Step 3Step 3: Evaluate CandidatesStep 3Step 3: Evaluate Candidates
Step 4Step 4: Choose a Brand NameStep 4Step 4: Choose a Brand Name
Step 5Step 5: Register TrademarkStep 5Step 5: Register Trademark
38
The Role of Logos
• Graphic design element that is related to the brand name
• Companies use logos with or without brand names
• Not all brand names possess a distinct logo but many do
e.g., the Nike swoosh, Ralph Lauren’s Polo
39
Good Logos
• Recognized readily
• Convey essentially the same meaning to all target members
• Evoke positive feelings
• Best strategy is to choose a design that is moderately elaborate rather than too simple or too complex
40
The Role of Logos
41
The Role of Logos
Cingular’s
logo
42
Functions of the Package
• Contain and protect the product
• Draw attention to a brand
• Break through competitive clutter at the point of purchase
• Justify price/value to the consumer
• Signify brand features and benefits
• Motivate consumers’ brand choices
43
Packaging Structure
• Sensation Transference: a tendency to impute characteristics from a package to the brand itself.
• Gestalt-consumers react to the unified whole of the package not the individual parts.
44
Issues in PackagingColor
Design and ShapePhysical Materials
Product Information
on Package
* VIEW Model (Visibility, Information, Emotional appeal, Workability)
Packaging Size
45
Packaging Structure
ColorDesign,Shape
Size
Physical Materials
46
• Communicate quality, taste, and product’s ability to satisfy psychological needs
• Affect people emotionally• Add elegance, prestige to products by using
polished reflective surface• Meaning of color varies from culture to culture
ColorDesign, Shape
Size
Physical Materials
The Use of Color
Meanings of Colors
• What do you associate with Red?
• Purple
• With white?
• With gray?
• Good tasting soft drinks
47
48
Design and Shape Cues
• Effective package design provides good eye flow and a point of focus
• Evoke different feeling through the choice of slope, length, and thickness of lines– Horizontal(tranquillity), Vertical(strength),
Slanted lines(upward movement)
• Shapes also arouse certain emotions and have specific connotations– Curving lines(femininity), Sharp lines(masculinity)
ColorDesign, Shape
Size
Physical Materials
49
Packaging Size
• Satisfy the unique needs of various market segments
• Represent different usage situations
• Gain more shelf space in retail outlets
ColorDesign, Shape
Size
Physical Materials
50
Physical Materials
• The most important consideration should be the marketing-communications implications of the materials chosen rather than cost
• Can arouse consumer emotions– Metal(strength, durability, coldness)– Plastics(lightness, cleanliness, cheapness)– Wood(masculinity), Velvet(femininity)
ColorDesign, Shape
Size
Physical Materials
51
Evaluating the Package: The VIEW Model
IInformation
WWorkability
EEmotional Appeal
VVisibility
52
The VIEW Model
Visibility: An Effective Seasonal Package Design
53
Evaluating the Package: The VIEW Model
• Ability of a package to attract attention at the point of purchase
• To have a package stand out on the shelf yet not to detract brand’s image
• Special seasonal and holiday packaging as a way of attracting attention
VVisibility
54
Evaluating the Package: The VIEW Model
• Product usage instructions, claimed benefits, slogans, and supplementary information
• Avoid cluttering the package with excess information
• Useful for– Stimulating trial purchases – Encouraging repeat purchase behavior– providing correct usage instruction
IInformation
55
Information: Frito Lay’s
Smart Snack Label
56
Evaluating the Package: The VIEW Model
• The ability of a package to evoke a desired feeling or mood
• CPM vs. HEM– Some packages emphasize informational
content, while others heavily emphasize emotional content
• Blend informational and emotional content so as to simultaneously appeal to consumers
EEmotional Appeal
57
Evaluating the Package: The VIEW Model
The changing faces of Betty Crocker
58
Evaluating the Package: The VIEW Model
How a package functions (Does it…)• Protect the product contents?• Simplify the consumer’s task in accessing and
using the product?• Protect retailers against unintentional breakage
from consumer handling and from pilferage?• Is the packaging environmentally friendly?
WWorkability
59
Dutch Boy’s “Workable” Package
Important issues in packaging
• Too much packaging
• Environmentally-friendly packaging
• Smart packaging (RFIDs)
60