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MG308A > Innovation > Flashcards

Innovation Flashcards

1
Q

What is an innovation

A

Any product, service, attitude, or idea that consumers within a market segment perceive as new and that has an affect on existing consumption
-New manufacturing technique
-New product variation
-New way to deliver products
-New way to package the product

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2
Q

Innovation equilibrium

A

Equilibrium of: technology (feasible), business (viable) and consumers (desirable use)

Makes innovation difficult

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3
Q

Three types of innovation:

A
  1. Discontinuous
  2. Dynamically continuous
  3. Continuous
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4
Q

Discontinuous

A

Creates major change in the way we live (pioneering), radically new advancements
-Spawn a host of peripheral products and associated innovations

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5
Q

Dynamically continuous

A

A more pronounced change to an existing product, often incorporates a new technology

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6
Q

Continuous

A

Extensions of existing products so they have limited effect on behavioral change, modified versions
-Most new products are evolutionary not revolutionary

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7
Q

Innovation continuum

A

1.High = discontinuous e.g telephone
2. Behavioural change required = dynamically continuous e.g cordless phone, cell phone, smart phone
3. Low = continuous e.g. cell phone with internet access, touchscreen

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8
Q

Product life cycle stages

A

Introduction
Growth
Maturity
Decline

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9
Q

PLC Introduction stage - objectives

A

-Develop awareness
-Quickly identify and remedy defects
-Gain trial by “innovators” and early adopters more later

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10
Q

Introduction stage - outlook on competition

A

Rarely attracted in this early stage - usually unprofitable

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11
Q

Intro stage - the product

A

-Limited number of models, focus on appealing to the most receptive segments
-Utmost attention to quality control and rapid response to market-revealed defects

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12
Q

PLC Growth Stage - objectives

A

-Establish brand loyalty by market and distribution partners
-Often forced to clarify positioning relative to entering competition

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13
Q

Growth Stage - outlook on competition

A

-Competitors enter aggressively
-Competition may aid in growing the market
-Comparative or attack advertising is common

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14
Q

Growth stage - the product

A

-Variations may be called for as segments emerge
-Improvements may be necessary to respond to competition

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15
Q

Maturity stage - objectives

A

-Defend market position
-Identify new markets and/or new uses for product to maintain growth

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16
Q

Maturity stage - outlook on competition

A

-Stablised, with few or no new entrants and semi-fixed market
-Price competition and distribution competition are common as competitors fight to maintain/earn market share

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17
Q

Maturity stage - the product

A

“tighten” product line to eliminate offerings with small shares
-Focus on new product platforms to re-introduce growth

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18
Q

Decline Stage - objectives

A

-Reduce costs
-Focus on profits rather than revenue or share

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19
Q

Decline stage - outlook on competition

A

Competition declining or dropping out because of decrease in consumer interest

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20
Q

Decline stage - the product

A

-Constant pruning of product line to eliminate any items not turning a profit
-Reduce marketing budget to lower fixed costs

21
Q

Adoption - of innovators

A

When an individual or household chooses to purchase a new product
-High effort = greater perceived risk, discontinuous, joint decisions
-Low effort = less perceived risk, continuous, independent

22
Q

Factors that aid successful adoption

A
  1. Compatibility
  2. Trialability
  3. Complexity
  4. Observability
  5. Relative advantage
23
Q

Compatibility

A

Innovation should be compatible with consumers’ lifestyles

24
Q

Trialability

A

People are more likely to adopt an innovation if they can experiment with it prior to purchase

25
Q

Complexity

A

A product that is EASY to understand will be chosen over competitors

26
Q

Observability

A

Innovations that are easily observable are more likely to spread

27
Q

Relative advantage

A

Product should offer relative advantage over other alternatives

28
Q

When does the most adoption occur during the PLC

A

Growth
Late majority

Least: innovators

29
Q

Types of adopters (5)

A
  1. Innovators
  2. Early adopters
  3. Early majority
  4. Late majority
  5. Laggards
30
Q

Product adoption lifecycle

A

-R&D = innovators
-Introduction = early adopters
-Growth = early majority
-Maturity = late majority
-Decline = laggards

31
Q

Innovators “techies”

A

– Higher education/income levels
– Socially active, use multiple information sources
– Venturesome, favor taking risks
– Enthusiastic about new tech products, even if there are a few
bugs or inefficiencies

32
Q

Early adopters “visionaries”

A

– Involved in product category (pay attention to the innovators
to get ahead of the herd)
– Concern for social acceptance, young and restless (do not
want to wait for subsequent versions even if cheaper)
– OPINION LEADERS : communicate benefits to the masses

33
Q

Early majority “pragmatists”

A

– Deliberate decision making, seek incremental, predictable,
reliable improvements to existing tech
– Value shoppers, wait until certain of product’s benefits
– Stick with the herd, have many informal social contacts

34
Q

Late majority “traditional”

A

-More conservative, wary of progress, rely on tradition
– Tend to adopt in reaction to peer pressure, emerging norms,
or economic necessity
– Generally fear high-tech products, prefer preassembled

35
Q

Laggards “skeptical”

A

– Slowest group to adopt, often resist innovation (important for
marketers to understand WHY)
– Neighbors and friends are information sources
– Fewer resources, cannot afford to take risks on new ideas

36
Q

Diffusion of innovations

A

Successful innovations must spread through the population and appeal to every consumer group e.g. more than 75% of people in the US, Argentina, Chile, South Africa, and many European countries use cell phones

37
Q

Diffusion

A

the % of the population that has adopted an innovation at a specific point in time
– While adoption reflects the behavior of an individual,
diffusion reflects the behavior of the entire marketplace as a
whole

38
Q

Saturation point

A

the maximum proportion of consumers likely to adopt a product

39
Q

How offerings diffuse through a market - S-shaped diffusion curve

A

Slow initial growth followed by a rapid increase in diffusion, them slows
-Typical of major innovations
-Greater perceived physical, economic, performance, social, or psychological risk
-High switching costs

40
Q

How offerings diffuse through a market - exponential diffusion curve

A

Rapid initial growth followed by increases at a slower pace
-Fewer perceived risk
-Consumers are similar in their beliefs/values, communicate throughout social network
-Low switching cost

41
Q

Applied to fashion system

A

Although often applied to aesthetic or hedonic innovations, can also describe functional and symbolic innovations

42
Q

Theories of fashion movement

A
  1. Trickle-down
  2. Trickle-up
  3. Trickle-across
43
Q

Trickle-down

A

trends start among the upper class or fashion leaders and move down to the masses or fashion followers
– World’s oldest and most accepted fashion theory (Veblen)

44
Q

Trickle-up

A

trends start among the young or lower income groups and move upward to older or higher
income groups

45
Q

Trickle-across

A

fashion moves horizontally through
groups at similar social levels
– Look to members of our reference groups for inspiration

46
Q

The typical fashion cycle

A

Introduction stages:
1. Innovation
2. Rise
Acceptance stages:
3. Acceleration
4. General acceptance
Regression stages:
5. Decline
6. Obsolescence

47
Q

Fad

A

A successful innovation that has a very short PLC
-Diffuses rapidly, quickly accepted, but short-lived
-May experience a revival years after initial appearance - e.g. fidget spinners

48
Q

Trend

A

a successful innovation that has a moderately long and potentially cyclical PLC
e.g. clothing styles, shoes

49
Q

Classic

A

a successful innovation that has a lengthy PLC
e.g. jeans, burgers

MG308A (12 decks)

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