Innovation

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  • Hello, the book cover you use on slide 1, and the master slide template--I am the author of that book. While it is flattering that you are using that book cover, it misleads readers into thinking that the content is also from that book. In actuality, the content is created by you and it is to your credit so the readers should know that. You should take the credit and at the same time give full citation to the book (title, author, ISBN, publisher and books' Web site which is www.mycbtextbook.com.
    By the way, did you use that book in a course? where was that?
    Your thought on innovation in your slides are very good. Thanks for sharing.
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Innovation

  1. 1. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART Diffusion of I Innovation PART I Chapter 1 • Introduction CONSUMER BEHAVIOR 2011 • Meaning & Definition • Diffusion Process • Adoption Process © Open Mentis 2010
  2. 2. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I Introduction • Is the Market today is CONSUMER BEHAVIOR 2011 consumer oriented? Yes: The market is often referred as consumer or buyers market. © Open Mentis 2010
  3. 3. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I Definition & Meaning of Diffusion of Innovation CONSUMER BEHAVIOR 2011 It is the process by which acceptance of an innovation ( new product or services or new ideas) is spread by communication (mass media, sales persons) to members of the target market © Open Mentis 2010 over a period of time.
  4. 4. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I Basic elements  Innovation CONSUMER BEHAVIOR 2011  Channel of communication  Social System  Time Does the innovation cater to the need of the target customer? Has the target customer understand how the © Open Mentis 2010 innovation is relevant to their need? Is the new product available and demonstrated widely?
  5. 5. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I New product Benefits communicated Eureka Forbes- Compact, easy to use, to keep home Vacuum Cleaner clean and tidy, home delivery CONSUMER BEHAVIOR 2011 Real Value- Fire Portable piece of safety equipment Extinguisher Sintex- plastic Water Low cost alternative to the Tank traditional metal or concrete water tank. Vim Bar- HUL Premixed scouring solution in the form of bar. © Open Mentis 2010 Good Knight – Godrej A mosquito repellent- which has no Hicare Ltd. smoke, no fumes, no ash, no cream, ( safe , economic and effective)
  6. 6. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I The Diffusion Process a) Innovation CONSUMER BEHAVIOR 2011 An Innovation can be a new concept (idea) or product or service which would appeal and is found to be attractive by the target market. © Open Mentis 2010 How fast the diffusion of innovation will take place and gain acceptance among the target customer?
  7. 7. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I The Diffusion Process Innovation CONSUMER BEHAVIOR 2011 Ex. of new innovations having found acceptance among consumer. The Cellular Phone – a compact, reasonably priced, wireless communication instrument, suitable © Open Mentis 2010 for the lifestyle of different categories of customers.
  8. 8. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I The Diffusion Process Innovation CONSUMER BEHAVIOR 2011 Ex. of new innovations having found acceptance among consumer. The DVD (digital video disk) player with its CD support format, PMPO Peak Music Power Output (PMPO) mega bass effect, Random play feature, © Open Mentis 2010 FM tuning, compact, which is easy to use and economically priced too.
  9. 9. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I The Diffusion Process Approaches to define a new Innovation CONSUMER BEHAVIOR 2011  Firm oriented  Product oriented  Market oriented © Open Mentis 2010
  10. 10. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I Approaches to define a new Innovation  Firm oriented CONSUMER BEHAVIOR 2011  looks into newness of the product from the prospective of the company producing and marketing it. © Open Mentis 2010
  11. 11. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I Approaches to define a new Innovation  Product oriented CONSUMER BEHAVIOR 2011  Will focus on the features inherent in the product itself and the effect these features are likely to have on consumer’s established usages © Open Mentis 2010 patterns.
  12. 12. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I Approaches to define a new Innovation  Product oriented CONSUMER BEHAVIOR 2011  A continuous innovation  A dynamically continuous innovation  A discontinuous innovation © Open Mentis 2010
  13. 13. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I Approaches to define a new Innovation  Product oriented CONSUMER BEHAVIOR 2011  A continuous innovation Modified version of exiting product. ex. Microsoft latest version of © Open Mentis 2010 operating system.
  14. 14. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I Approaches to define a new Innovation  Product oriented CONSUMER BEHAVIOR 2011  A dynamically continuous innovation Creation of new product or the modifica -tion of existing product. Ex. Mobile phones with video recording © Open Mentis 2010 and fm tunings, erasable ink pens, sanitary napkins.
  15. 15. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I Approaches to define a new Innovation  Product oriented CONSUMER BEHAVIOR 2011  A discontinuous innovation Requires consumers to adopt new behavior patterns. ex, movie screen theaters , home © Open Mentis 2010 theaters , fax machine, internet etc
  16. 16. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I Approaches to define a new Innovation  Market oriented CONSUMER BEHAVIOR 2011  The newness of the product or services in terms of how much exposure consumers have to the new product. © Open Mentis 2010
  17. 17. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I b) Product characteristics influence diffusion.  Some products may gain consumer CONSUMER BEHAVIOR 2011 acceptance quite fast such as cellular phones or ICICI prudential.  Other may take long time or never seems to achieve wide consumer acceptance like Real value © Open Mentis 2010 Vacuumised Containers.
  18. 18. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I b) Product characteristics influence diffusion. CONSUMER BEHAVIOR 2011  Relative advantage  Compatibility  Complexity  Trial ability  Observbility © Open Mentis 2010
  19. 19. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I b) Product characteristics influence diffusion. CONSUMER BEHAVIOR 2011  Relative advantage The extent or degree to which potential customers perceive a new product to be superior when compared to the existing substitute. Ex, email – traditional letter writing. © Open Mentis 2010
  20. 20. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I b) Product characteristics influence diffusion.  compatibility CONSUMER BEHAVIOR 2011 The extent or degree to which potential customers feel a new product is consistent with their present need , values and practices. Ex, disposable diaper – cloth diaper. © Open Mentis 2010 Hair removing lotion (Anne French) - wax
  21. 21. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I b) Product characteristics influence diffusion.  complexity CONSUMER BEHAVIOR 2011 The extent or degree to which a new product is complex or difficult to understand. Ex, the mixer grinder – traditional grinding machine. © Open Mentis 2010
  22. 22. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I b) Product characteristics influence diffusion.  Trial ability CONSUMER BEHAVIOR 2011 The extent or degree to which a new product is capable of being tried on a limited basis. Ex, tea, detergent power are available in the small sample package. © Open Mentis 2010
  23. 23. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I b) Product characteristics influence diffusion.  Observbility CONSUMER BEHAVIOR 2011 Refers to the ease with which a product’s benefits or attributes can be observed, imagined or described to potential customers. Ex, designers wears, jewelers and other © Open Mentis 2010 fashion items get more easily diffused.
  24. 24. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I c) Channels of Communication Determine how quickly an innovation CONSUMER BEHAVIOR 2011 spreads through the market. Communication Between marketers and consumers. Among consumers © Open Mentis 2010
  25. 25. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I c) Channels of Communication Sources of Consumer Communication Personal- family, friends, neighbors, CONSUMER BEHAVIOR 2011 business associates. Commercial- sales personal, advertising, sales promotion tactics. Public- mass medias, consumer rating organizations. © Open Mentis 2010 Experimental – samples, free coupons, demonstration.
  26. 26. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I c) Channels of Communication Off line activities :- CONSUMER BEHAVIOR 2011 Road shows, exhibitions, pop display and posters, direct marketing, direct mailers, tele marketing sms and online marketing- internet marketing , email, website. © Open Mentis 2010
  27. 27. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I d) Social System Is a physical, social, or cultural CONSUMER BEHAVIOR 2011 environment to which customers belongs and within which they function. It has its own special values or norms, which is likely to influence the acceptance or rejection of new © Open Mentis 2010 products or services.
  28. 28. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I d) Social System  kiran stores – supermarket, CONSUMER BEHAVIOR 2011 specialty store malls. More purchasing power Change of their dressing style Take active participation in various fashion shows- miss famina, mega model, male model © Open Mentis 2010
  29. 29. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I e) Time CONSUMER BEHAVIOR 2011  The purchase time  Rate of adoption Adopter categories © Open Mentis 2010
  30. 30. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I e) Time  The purchase time CONSUMER BEHAVIOR 2011 The usual route taken for increasing consumer awareness of the new product is through coupons, banners, pamphlets etc © Open Mentis 2010
  31. 31. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I e) Time  Rate of adoption CONSUMER BEHAVIOR 2011  Determines how long it will take for a new innovation to be adopted by members of a social system.  The rate of adoption is vary from © Open Mentis 2010 product to product.
  32. 32. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I e) Time  Adopter Category CONSUMER BEHAVIOR 2011  The way people display their readiness to try out new products or innovations. © Open Mentis 2010
  33. 33. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I e) Time Late Majority CONSUMER BEHAVIOR 2011 Early Majority Early 34% 34% Laggards adopters Innovators © Open Mentis 2010 13.5% 16% 2.5%
  34. 34. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART I Adoption Process CONSUMER BEHAVIOR 2011  Innovators  Early Adopters  Early Majorities  Late Majorities  Laggards © Open Mentis 2010
  35. 35. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART Adoption Process I Innovators : when new product is launched 2.5% of CONSUMER BEHAVIOR 2011 customers try out the product. Referred as Innovators or pioneers. Easily acceptable to new product/ideas. No feedback is available. Described as outgoing, gregarious, educated . © Open Mentis 2010 Willing to follow high social class status.
  36. 36. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART Adoption Process I Early Adopters: when new product is launched 13.5% of CONSUMER BEHAVIOR 2011 customers try out the product. Purchase or try quite early but after verifying and gathering more information. Recognized as opinion leaders. Carry out lots of weight in the community. © Open Mentis 2010  They are educated, hold high social status
  37. 37. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART Adoption Process I Early Majorities : when new product is launched 34% of CONSUMER BEHAVIOR 2011 customers try out the product. More conservatives, thoughtful, shrewd and prefer to wait, watch and learn. Middle class, reasonable education, occupation and income. © Open Mentis 2010
  38. 38. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART Adoption Process I Late Majorities : when new product is launched 34% of CONSUMER BEHAVIOR 2011 customers try out the product. More conservatives, and do not immediately respond in favor of change. Depends on public opinion. Limited education, average social status, limited salary, limited purchasing © Open Mentis 2010 power.
  39. 39. 1 Welcome to the Fascinating World of ConsumersCHAPTER PART Adoption Process I Laggards : when new product is launched 16% of CONSUMER BEHAVIOR 2011 customers try out the product. Lagging behind the acceptance of an innovation. Traditional brand , lot of deliberation, caution and suspicion. Traditional outlook. © Open Mentis 2010

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