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