Chapter 14 PT 2 Developing and Launching New Offerings

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Chapter 14 PT 2Developing and Launching New
Offerings

• Jestin Johnson
• PADM 7040

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Launching The New Offering

• S-shaped offer life cycle (OLC)
• I. Introduction period is considered slow with
  minimal growth due to not being previously
  available to the intended market.
• II. Growth highest point at which an offering is
  demonstrating peak performance
• III. Maturity after the hype of a new offering
  has rescinded, leveling off takes place.
• IV. Decline the final period where a new
  offerings production has reached its peak and is
  demonstrating a downturn in its market.

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Launching New Offering Cont.

• Offer life cycle classes
• OFFER CLASS likelihood for a continuous
  maturation for an undefined period of time.
• OFFER FORM considered to have more historical
  prevalence following the offer life cycle
• BRAND unlike offer classes, brands have a
  definite expiration period.

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Launching New Offering Cont.

• Other types of offering
• Scalloped Patterns offering tends to differ in
  that maturation stage and evolves into a
  completely different life cycle. New life is
  triggered by modifications, new uses, new users.
  (Figure 14-4A)
• Cyclical Patters as the name suggests, a
  cyclical pattern is developed when a period
  returns to a previous or revolution. Examples are
  political parties and higher education programs.
  (Figure 14-4B)
• Fad Pattern occurs when a new offerings come
  into the marketing mix, immediately peaks by
  showing great promise but very quickly declines
  close to its starting point. (Figure 14-4C)

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Innovation and Growth Stages

• Innovation Adoption
• Occurs when a new target audience begins a new
  trend. Often times by taking previous innovations
  and putting their spin on it essentially
  creating a new innovation.
• Secondly, managers can provide description of
  the various stages that innovation is going
  through
• Finally, managers or creators of new innovation
  can can pin point defining characteristics of the
  new offering. If this is done the ability for
  implementation is much easier and increases
  possibility of acceptance.
• (Andreason Kotler, 2003 p. 365)

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Finding Potential Innovators

• Mass marketing is not an accepted practice in the
  nonprofit sector primarily because it takes a
  considerable amount of capital to cover high
  expenditures, as well as a large amount of wasted
  exposure to an unintended target audience or an
  audience that has a lower acceptance probability.
  
• The target marketing approach is the accepted
  practice in the nonprofit marketing sector. This
  technique allows for marketing to be directed
  towards its intended audience, which has a higher
  success rate than mass marketing.

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Innovation Adoption Theory Adopter Categories

• Innovativeness- individuals that are early
  receptors of new ideas earlier than the
  majority.
• Venturesomeness a small group that is very
  willing to try new ideas regardless of the
  possible risk. Individuals are considered to be
  pertinent or sophisticated in nature.
• Deliberateness (Early Majority)- people who
  intentionally try to adopt new ideas prior to any
  other member of a group or society.
• Skepticism (Late Majority)- considered to be the
  if it aint brokedon't fix it bunch. Will not
  change until they are forced to change as a
  result of the evolution in their environment.
• Tradition (Laggards)- late bloomers who tend to
  be traditional in nature, and like skeptics are
  resistant to change. Old School

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Innovation Adoption Theory Cont.

• Innovation Adoption Theory
• Contends that individuals within a target market
  differ in the amount of time that passes between
  their exposure to a new offering and trial of it.
• Early adopters are likely to share some traits
  that differentiate them from late adopters.
• An existence of efficient media for early adopter
  types.
• Early adopter types are likely to be high on
  opinion leadership and are helpful in
  advertising" the new offering to potential
  buyers.
• (Andreason Kottler, 2003 p. 367)

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Stages in the Innovation Adoption Process

• Knowledge Precontemplation Stage
• -target consumers must be aware of a particular
  innovation in order to make a decision of its
  validity as it pertains to their own required
  lifestyle.
• 2. Persuasion Contemplation Stage
• -target consumers must put themselves in a
  position to graduate from just being aware of an
  innovation to making an informed decision and
  moving on to the next phase in the innovation
  adoption process. This is successfully completed
  through psychological adjustment in attitude and
  general coercion.

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Stages in the Innovation Adoption Process Cont.

• 3. Decision Preparation/Action Stage
• In this stage the targeted consumer makes a
  valid decision on whether or not to fully accept
  the intended behavior change and to reject or
  adopt the possible consequences.
• 4. Confirmation Maintenance Stage
• Once a decision is made to accept a specific
  behavior, it is hoped that consumers continue
  with their decision for an ongoing period of
  time.

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Values of Stages of Change model

• Acknowledges that there are necessary prescribed
  guidelines to follow in order to progress to a
  desired position.
• Provides a means to monitor the implementation
  of the framework and gives insight and the
  ability to help identify rational for slow or
  rejected acceptance.
• Specific models can be used to develop segmented
  approaches to change.

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Innovation Characteristics

• Innovation characteristics
• Relative Advantage- degree to which it is
  perceive to be superior to previous ideas.
• Compatibility- degree to which it is consistent
  with the values and experiences of the
  individuals in the target social system.
• Complexity- the degree to which it is relatively
  difficult to understand or use.
• Divisibility- degree to which it may be tried on
  a limited basis
• Communicability- the degree to which the intended
  results are observable or describable to others.
• (Andreason Kotler, 2003 p.370)