The stages through which products develop over time is commonly known as the "Product Life Cycle". The Product Life cycle is the fundamental concept for planning, strategy, product development, marketing, and manufacturing.
The product life cycle has 4 very clearly defined stages, each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products. The four major life cycles a product undergoes are:
•Introduction stage
•Growth stage
•Maturity stage
•Decline stage.
The life cycle concept may apply to a brand or to a category of product. Its duration may be as short as a few months for a fad item or a century or more for product categories such as the gasoline-powered automobile.
Product development is the incubation stage of the product life cycle. There are no sales and the firm prepares to introduce the product. As the product progresses through its life cycle, changes in the marketing mix usually are required in order to adjust to the evolving challenges and opportunities. (Internet Center for Management and Business Administration, Inc, Copyright © 2002-2010 NetMBA.com)
INTRODUCTION STAGE
This stage of the cycle could be the most expensive for a company launching a new product. The size of the market for the product is small, which means sales are low, although they will be increasing. On the other hand, the cost of things like research and development, consumer testing, and the marketing needed to launch the product can be very high, especially if it’s a competitive sector.(Living Better Media,2011)
Some characteristics of this stage as described in an article adopted from Philip Kotler’s book Marketing Management, 9th Ed. p. 345 are:
•Sales generally are low and somewhat slow to take off. Customers are characterized as 'innovators.'
•Production costs tend to be high on a per unit basis because the firm has yet to experience any significant scale economies
•Marketing costs required for creating customer awareness, interest, and trial and for introducing the product into distribution channels are high.
•Profits, because of low sales and high unit costs, tend to be negative or very low.
•Competitors tend to be few in number, indeed there may be only one major player in the marketplace -- the innovating firm.
THE GROWTH STAGE
The growth stage is typically characterized by a strong growth in sales and profits, and because the company can start to benefit from economies of scale in production, the profit margins, as well as the overall amount of profit, will increase. This makes it possible for businesses to invest more money in the promotional activity to maximize the potential of this growth stage.
Also at this stage of the cycle as stated by Philip Kotler (Marketing Management, 9th Ed. Pg. 345) are:
•Sales increase rapidly during the growth phase. This increase is due to: (1) consumers rapidly spreading positive word-of-mouth (WOM) about the product; (2) an increasing number of competitors enter the market with their own versions of the product; (3) and a "promotion effect" which is the result of individual firms employing, advertising and other forms of promotion to create market awareness, stimulate interest in the product, and encourage trial.
•Cost are declining on a per unit basis because increased sales lead to longer production runs and, therefore, scale economies in production. Similarly firms may experience experience curve effects which help to lower unit variable costs.
•Because sales are increasing and, at the same time, unit costs are declining, profits rise significantly and rapidly during this stage.
•Customers are mainly early adopters and early majority. It is the early adopter, specifically, that is responsible for stimulating the WOM effect. During the latter part of growth, the first major segment of the mass market, called the early majority, enters the market. This category of consumers is somewhat more price sensitive and lower on the socio-economic spectrum. As a result, these consumers are somewhat more risk averse and, therefore, somewhat more hesitant to adopt the product.
•Competition continues to grow throughout this stage. As competitors recognize profit potential in the market, they enter the market with their own versions of the product. As competition intensifies, strategies turn to those that will best aid in differentiating the brand from those of competitors. Attempts are made to differentiate and find sources of competitive advantage. In addition, firms identify ways in which the market can be segmented and may develop focused marketing strategies for individual segments
THE MATURITY STAGE
During the maturity stage, the product is established and the aim for the manufacturer is now to maintain the market share they have built up. This is probably the most competitive time for most products and businesses need to invest wisely in any marketing they undertake. They also need to consider any product modifications or improvements to the production process which might give them a competitive advantage.
Characteristics of this stage are:
•Sales continue to grow during the early part of maturity, but at a much slower rate than experienced during the growth phase. At some point, sales peak. This peak may last for extended periods of time. In fact, the maturity phase of the life cycle is the longest phase for most products. As a result, most products at any given point in time probably are at maturity. And, most decisions made by marketing managers will be decisions about managing the mature product.(ibid)
•Costs continue to rise during maturity because of market saturation and continually intensifying competition. When this slowing of sales is combined with the increasing costs associated with this stage, the result is that profits will have reached their highest level and must, from this point on, decline.
•The only remaining customers to enter the market will be the late majority and the laggards. These customer groups are by far the most risk averse and most hesitant to adopt new products. These customers are quite price sensitive and, as a result, will not buy products until prices have seen significant declines. Many laggards, the last group to adopt, often do not do so until the product is virtually obsolete and in danger of being displaced by new technologies.
•Competition is most intense during this stage. The intensity of competitive in-fighting drives the changes in costs and profitability.
THE DECLINE STAGE
Eventually, the market for a product will start to shrink, and this is what’s known as the decline stage. This shrinkage could be due to the market becoming saturated (i.e. all the customers who will buy the product have already purchased it), or because the consumers are switching to a different type of product. While this decline may be inevitable, it may still be possible for companies to make some profit by switching to less-expensive production methods and cheaper markets.
Some characteristics that can be observed at this stage are:
•Sales continue to deteriorate through decline. And, unless major change in strategy or market conditions occur, sales are not likely to be revived. Costs, because competition is still intense, continue to rise. Large sums are still spent on promotion, particularly sales promotions aimed at providing customers with price concessions.
•Profits, as expected, continue to erode during this stage with little hope of recovery.
•Customers, again, are primarily laggards.
•There generally are a significant number of competitors still in the industry at the beginning of decline. However, as decline progresses, marginal competitors will flee the market. As a result, competitors remaining through decline tend to be the larger more entrenched competitors with significant market shares (ibid)
According to Philip Kotler, with reference to an article he adopted which was published (Feb2002), the product life cycle can repeat. Some product categories apparently begin to transition into decline only to experience a substantial resurgence in sales leading to "re-growth." An excellent example is nylon. Additional new uses for nylon have been discovered by manufacturers since the product’s introduction, all of which have lead to substantial increases in sales and profits.
Fashion also tends to exhibit the recycle pattern. The stages in a fashion's life cycle have been given somewhat different nemeses stages are: the "distinctiveness stage," the "emulation stage," the "mass fashion stage," and the "decline stage." These stages still essentially are the introduction, growth, maturity and decline stages of the standard product life cycle. What is most different about the fashion life cycle is its recycle period. Fashions can be, and are, reintroduced. The ability of fashions to exhibit such cycle-recycle life cycles can be traced to their introduction and popularity with different generation.
The idea of the product life cycle has been around for some time, and it is an important principle manufacturers need to understand in order to make a profit and stay in business.
However, the key to successful manufacturing is not just understanding this life cycle, but also proactively managing products throughout their lifetime, applying the appropriate resources and sales and marketing strategies, depending on what stage products are at in the cycle. .(Living Better Media,2011)
THE LAGGARDS
Laggards, contrasted with innovators, are generally defines as the last group of persons to adopt a product, service or an idea although contrasted with non-adopters they do adopt eventually. (Kenneth UHL, Roman Andrus and Lance Poulsen, Journal of Marketing Research 1970)
Everett M. Rogers also in his work Diffusion of Innovations divided the market into five different groups namely, innovators, early adaptors, early majority, late majority and laggards.
Each division has its own characteristics, attributes and companies have to focus on one consumer segment at the time as these consumers have different needs and desires. Mostly innovators and early adaptors are the important segments when launching a new product. While small, these segments are very vital as they act as the entry point to bigger share of the market.
According to Everett M. Rogers, early adaptors are technologies that can see the potential of the new product. This group is more willing to pay higher prices for immature technology, suffer more pain from product malfunctions and defects. Other research also found that early adaptors have exploratory consumer behavior seeking novelty while being characterized by tolerance to ambiguity and low dogmatism (Manning, Bearden &Madden, 1995).
However, laggards consist of a large segment to be ignored. They comprise of about 16% percent of the market(Everett M. Rogers,1995). Other calculations put laggards at 21.9% percent of the market (Mahajan, Muller & Srivastava, 1990).
Therefore it could be concluded that that while it is difficult to come up with an exact accurate number for laggards, the consensus is however that the percentage is not small, therefore the understanding of laggards and their behavior may help in gaining adoption by late majority, laggards and maybe those who are considered to be non-adaptors.
Demographically, laggards have been characterized with low level of education, low income status and low social mobility (Uhl, Andrus & Poulsen, 1970). The scarce financial resources force many people to wait for the product price to fall before they make a purchasethus making them LAGGARDS.
A study by Jacob Goldenberg and Shaul Oreg suggest that laggards do indeed become innovators in some cases (2006) hence marketers should identify and value this segment of the market and work hard at making this suggestion a reality for the growth of their products.
REFERENCES
•Philip Kotler, Marketing Management, 9th Ed.(Upper Saddle River, NJ: Prentice-Hall), p. 345.
•The Encyclopedia of POP Culture, by Jane and Michael Stern. Harper Perennial Press, 1992
•Thom Holland, Sales & Marketing (April 6th, 2011).
•(Internet Center for Management and Business Administration, Inc, Copyright © 2002-2010 NetMBA.com)
•(Kenneth UHL,Roman Andrus and Lance Poulsen, Journal of Marketing Research © 1970 American Marketing Association
Saturday, December 3, 2011
Sunday, November 6, 2011
THE TYPES OF CONSUMERS IN THE CONSUMER MARKET AND THE BUSINESS MARKET
A consumer is a person engaged in evaluating, acquiring and using goods and services to satisfy his needs and wants. In other words a consumer is a person who makes a purchase decision having in mind their expectations and needs coupled with the advertisers attempt to influence their decision through advertising. Consumer is the key figure in market and around him all the activities are carried on.
Consumers can be broadly divided in to two classes
1: Personal Consumer: Personal consumer is that consumer who purchases goods and services for his own personal consumption or uses. We can say that consumer is also called the ultimate or final person because when the marketer produces the goods then he hands over the goods to personal consumer for final consumption. For example: Mr. Abu buys shaving cream for his personal use so he is said to be personal consumer. This category of is also called the consumer market.
2: Organizational Consumer: Organizational consumer consists of the government agencies, business organization, non governmental organization (NGO), firms and different types of manufacturing companies who purchase the goods and services in order to run the business. For example: A manufacturing organization let say Liz Couture purchases raw materials in order to produce cloths for people. This category can also be referred to as the business market.
Armstrong, G.Kotler, P. (2005) in his book: Marketing: An introduction says that different types of consumers are combined within several major categories, i.e. The consumer market and the business market.
Amid these two major categories, the consumer market is comprised of individuals and households that purchase “goods and services for personal consumption,” whereas the business market encompasses organizational entities that purchase goods and services for the “use in the production of other products and services or for the purpose of reselling or renting them to others at a profit.”
Business markets possess a smaller amount of large buyers, unlike the consumer market, and whose consuming traits are “more geographically concentrated.” Dependent on the type of buyer and consumer, characteristics through decision processes may differ. For instance, the consumer market’s behavior is “influenced by four key sets of buyer characteristics: cultural, social, personal and psychological.”
Culture, is defined by social class and group wants and behaviors; social, incorporates the factors of influences by family and small groups that determine ideal brands and products; personal adopts the different age groups and lifestyles, and psychological, utilizes motivators and perception of “beliefs and attitudes.”
Additionally, the business market’s behavior is influenced by a buying center that displays “three types of buying situations: straight rebuys, modified rebuys, and new tasks.”
Decitica, a marketing strategy and research firm conducted a study in August 2009 spearheaded by Dr. Val Sriniva entitled "Marketing to the Post-Recession Consumers".
In their research they identified four distinct consumer segments emerging from the recession. These four consumers are the Steadfast Frugalists, the Involuntary Penny-Pinchers, the Pragmatic Spenders and the Apathetic Materialists.
These categories were derived by analyzing the frequency, satisfaction and the self-efficacy associated with a variety of spending, purchase and consumption.
Steadfast Frugalists
Steadfast frugalists are committed to self-restraint, engaging in prudence with unequivocal enthusiasm. They make up about one-fifth of the American consumers, representing all income and age groups. "Marketers will find this group to be the most challenging, as they are the least brand loyal and most likely to discount marketing messages," notes Dr. Srinivas.
Eighty-percent of Steadfast Frugalists say the new behaviors they have adopted will likely stay with them for a long time. This is in contrast to twenty-four percent of Apathetic Materialists who feel this way.
Involuntary Penny-Pinchers
Involuntary Penny-Pinchers, about twenty-nine percent of the population, have been severely affected by the recession. They are mainly made up of households with less than $50,000 in income, with more women than men.
This segment has been forced to embrace thrift like never before. Presently, their actual behaviors do not differ widely from those of Steadfast Frugalists. Where they drastically diverge is in their aversion to expending effort in money-saving strategies. Only seventeen percent find buying store or generic labels to be satisfying, compared to fifty-nine percent of Steadfast Frugalists.
Also, the recession has had a heavy emotional impact on Involuntary Penny-Pinchers; they admit to being more scared (seventy-seven percent), stressed (eighty-one percent) and worried (eighty-seven percent) about the future than other groups.
Pragmatic Spenders
"Pragmatic Spenders are the most attractive group for marketers because of their higher spending power," says Dr. Val Srinivas. "While it is true that they have also curbed their spending, they are the most capable, both psychologically and financially, to willfully resurrect their past spending patterns," he added. This group comprises twenty-nine percent of consumers.
Income has blunted the effects of the recession on this segment. Only twenty-eight percent of Pragmatic Spenders feel the recession has changed what and how they will buy in the future, compared to fifty-five percent of Steadfast Frugalists.
Apathetic Materialists
Apathetic Materialists seem least changed by the recession. They have not embraced the new frugality to the same extent as others and get minimal satisfaction from such behaviors. Only about six percent in this group find price comparison to be satisfying, in contrast to eighty-five percent in the Steadfast Frugalists camp.
The Apathetic Materialists segment has more men (fifty-five percent) and younger consumers (seventy-two percent are below the age of forty). They are the least driven by price: only eight percent admit to being very focused on value compared to thirty percent of Pragmatic Spenders and fifty-two percent of Involuntary Penny-Pinchers.
Brad Tuttle (July 2010) also grouped consumers into ten groups in his research entitled; Bound to Buy: The 10 Types of Consumers Who Inevitably Overspend.These consumers are as follows;
The Preemptive Replacer
This consumer is frequently bored with his possessions, and cares way more about whether something is shiny, new, and impressive than about actual functionality, and is disgusted when an item gets a slight scratch, tear, or stain. Could possibly have an unhealthy fetish involving plastic packaging, crinkly shopping bags, and/or “new car smell.”
Likely purchases: new car (when the old one runs fine), new sneakers (every other month), entire new kitchen or bathroom (because the old one was, oh, a little blah), storage unit (to hold all of the stuff that’s still perfectly good)
The Knee-Jerk Outsourcer
This anti-DIYer believes that her time is absolutely invaluable, and can’t be bothered with tasks deemed even marginally difficult or complicated, no matter what the cost.
Likely purchases: landscaping (a.k.a. somebody to cut your lawn), pre-sliced vegetables, Geek Squad assistance, “baby concierge” services
The Hapless Negotiator
The haggling techniques of this squeamish, extremely non-confrontational individual consist of two phrases: “How much?” and “I’ll take it.” Known to perspire heavily in the presence of car salesmen, antique store clerks, and crotchedy old ladies at yard sales.
Likely purchases: inflated auto insurance, inflated cable/Internet/phone plans, car at anything close to sticker price
The Fine Print Ignoramus
Details, details. Who can be bothered with details? Not the fine-print ignoramus, who accepts too-good-to-be-true offers at face value and never investigates the likelihood of “gotchas.”
Likely purchases: “exploding” mortgage, credit card with “great introductory rates” (that only last six months), heavily subsidized cell phone with absurdly high early termination fee
The Shortsighted Sign-Me-Upper
Closely related to and sometimes overlapping with the fine-print ignoramus, the shortsighted sign-me-upper focuses solely on what he must pay to get his hands on the goods right now, and never considers how much the purchase will cost him down the line—or whether he’ll even want the product down the line.
Likely purchases: timeshare, car lease, store-affiliated credit cards, products on infomercials, QVC, and HSN (especially those with “low monthly payments”)
The Early Adopter (and Constant Upgrader)
If it’s been described with the phrase “the next great,” if it features an Apple logo, and/or if mere possession of one will cause strangers to stop in their tracks and stare, then the early adopter must have it. No matter what your opinion of this consumer, you should thank the early adopter’s pioneering ways, because while his actions may seem brave, forward-thinking, foolhardy, egotistical, or some combination therein, he serves a noble purpose: He pays full price and sometimes purchases clunkers so the rest of us wind up with sound gear for much less money later on.
Likely purchases: iPad, untested hybrid or electric car, endless series of smartphones, Blueray paraphernalia, a bajillion other hot new things by the time you read this
The Impulse Buyer (and Frequent Regretter)
Delayed gratification? By the time this consumer manages to say the phrase—which does have a lot of syllables, come to think of it—she has excitedly scooped up a handful of “must-have” trifles that caught her eye.
Likely purchases: shoes, purses, gag gifts, infomercial products (as gag gifts or otherwise), anything in a store window or near a checkout line
The Whiny Kid Appeaser
Pity this poor soul, whose buttons can be pushed by offspring with multifaceted manipulation skills way beyond their years. Sometimes, a child’s momentary melancholy glance down at the store shelf is all it takes to prod a parent into surrender, albeit with a moral victory via the words, “Just one, OK?”
Likely purchases: toys, DVDs, video games, florescent cereal, yogurt-like products featuring Nickelodeon characters
The Illogical Rationalizer
This well-intentioned but misguided consumer believes that spending money is an excellent means to save money. And while this logic sometimes holds true—for example, it makes sense to pay extra for a product that’s more durable than a cheaper one that’ll have to be replaced often—not spending money is generally an even better way to save. The illogical rationalizer also has a weakness for words such as “deal,” “discount,” and “half off,” and when confronted with questions about the worthiness of a given product at any price may respond defensively by saying, “But I had a coupon!”
Likely purchases: ride-on lawnmower, extended warranty, elaborate home improvement projects, random stuff you’d never otherwise purchase but bought anyway solely because it was “on sale”
The Creature of (Bad) Habit
The “habitual offender,” if you will, faces what is arguably the most difficult challenge in fixing one’s finances. Human beings are comforted by routine and repetition, and if changing one’s habits was easy, no one would have habits that are bad, unhealthy, or costly, at least not for long. The key to stopping bad habits is to stay focused not on what you’re giving up, but on the benefits of what you get from good habits. For instance, by cooking at home rather than eating out all the time, you’ll be healthier, you’ll spend more time together with your family, and you’ll have more money—which will come in handy when your kid gives you that desperately sad look at the toy store. Likely purchases: cigarettes, lottery tickets, Starbucks, fast food
REFERNCES
•Dr. Val Srinivas(2009),Principal Decitica, Marketing to the Post-Recession Consumers
•Brad Tuttle (July 23, 2010), Bound to Buy: The 10 Types of Consumers Who Inevitably Overspend
•Armstrong, G., Kotler, P. (2005). Marketing: An introduction. (7th ed.). [Electronic Version].
Consumers can be broadly divided in to two classes
1: Personal Consumer: Personal consumer is that consumer who purchases goods and services for his own personal consumption or uses. We can say that consumer is also called the ultimate or final person because when the marketer produces the goods then he hands over the goods to personal consumer for final consumption. For example: Mr. Abu buys shaving cream for his personal use so he is said to be personal consumer. This category of is also called the consumer market.
2: Organizational Consumer: Organizational consumer consists of the government agencies, business organization, non governmental organization (NGO), firms and different types of manufacturing companies who purchase the goods and services in order to run the business. For example: A manufacturing organization let say Liz Couture purchases raw materials in order to produce cloths for people. This category can also be referred to as the business market.
Armstrong, G.Kotler, P. (2005) in his book: Marketing: An introduction says that different types of consumers are combined within several major categories, i.e. The consumer market and the business market.
Amid these two major categories, the consumer market is comprised of individuals and households that purchase “goods and services for personal consumption,” whereas the business market encompasses organizational entities that purchase goods and services for the “use in the production of other products and services or for the purpose of reselling or renting them to others at a profit.”
Business markets possess a smaller amount of large buyers, unlike the consumer market, and whose consuming traits are “more geographically concentrated.” Dependent on the type of buyer and consumer, characteristics through decision processes may differ. For instance, the consumer market’s behavior is “influenced by four key sets of buyer characteristics: cultural, social, personal and psychological.”
Culture, is defined by social class and group wants and behaviors; social, incorporates the factors of influences by family and small groups that determine ideal brands and products; personal adopts the different age groups and lifestyles, and psychological, utilizes motivators and perception of “beliefs and attitudes.”
Additionally, the business market’s behavior is influenced by a buying center that displays “three types of buying situations: straight rebuys, modified rebuys, and new tasks.”
Decitica, a marketing strategy and research firm conducted a study in August 2009 spearheaded by Dr. Val Sriniva entitled "Marketing to the Post-Recession Consumers".
In their research they identified four distinct consumer segments emerging from the recession. These four consumers are the Steadfast Frugalists, the Involuntary Penny-Pinchers, the Pragmatic Spenders and the Apathetic Materialists.
These categories were derived by analyzing the frequency, satisfaction and the self-efficacy associated with a variety of spending, purchase and consumption.
Steadfast Frugalists
Steadfast frugalists are committed to self-restraint, engaging in prudence with unequivocal enthusiasm. They make up about one-fifth of the American consumers, representing all income and age groups. "Marketers will find this group to be the most challenging, as they are the least brand loyal and most likely to discount marketing messages," notes Dr. Srinivas.
Eighty-percent of Steadfast Frugalists say the new behaviors they have adopted will likely stay with them for a long time. This is in contrast to twenty-four percent of Apathetic Materialists who feel this way.
Involuntary Penny-Pinchers
Involuntary Penny-Pinchers, about twenty-nine percent of the population, have been severely affected by the recession. They are mainly made up of households with less than $50,000 in income, with more women than men.
This segment has been forced to embrace thrift like never before. Presently, their actual behaviors do not differ widely from those of Steadfast Frugalists. Where they drastically diverge is in their aversion to expending effort in money-saving strategies. Only seventeen percent find buying store or generic labels to be satisfying, compared to fifty-nine percent of Steadfast Frugalists.
Also, the recession has had a heavy emotional impact on Involuntary Penny-Pinchers; they admit to being more scared (seventy-seven percent), stressed (eighty-one percent) and worried (eighty-seven percent) about the future than other groups.
Pragmatic Spenders
"Pragmatic Spenders are the most attractive group for marketers because of their higher spending power," says Dr. Val Srinivas. "While it is true that they have also curbed their spending, they are the most capable, both psychologically and financially, to willfully resurrect their past spending patterns," he added. This group comprises twenty-nine percent of consumers.
Income has blunted the effects of the recession on this segment. Only twenty-eight percent of Pragmatic Spenders feel the recession has changed what and how they will buy in the future, compared to fifty-five percent of Steadfast Frugalists.
Apathetic Materialists
Apathetic Materialists seem least changed by the recession. They have not embraced the new frugality to the same extent as others and get minimal satisfaction from such behaviors. Only about six percent in this group find price comparison to be satisfying, in contrast to eighty-five percent in the Steadfast Frugalists camp.
The Apathetic Materialists segment has more men (fifty-five percent) and younger consumers (seventy-two percent are below the age of forty). They are the least driven by price: only eight percent admit to being very focused on value compared to thirty percent of Pragmatic Spenders and fifty-two percent of Involuntary Penny-Pinchers.
Brad Tuttle (July 2010) also grouped consumers into ten groups in his research entitled; Bound to Buy: The 10 Types of Consumers Who Inevitably Overspend.These consumers are as follows;
The Preemptive Replacer
This consumer is frequently bored with his possessions, and cares way more about whether something is shiny, new, and impressive than about actual functionality, and is disgusted when an item gets a slight scratch, tear, or stain. Could possibly have an unhealthy fetish involving plastic packaging, crinkly shopping bags, and/or “new car smell.”
Likely purchases: new car (when the old one runs fine), new sneakers (every other month), entire new kitchen or bathroom (because the old one was, oh, a little blah), storage unit (to hold all of the stuff that’s still perfectly good)
The Knee-Jerk Outsourcer
This anti-DIYer believes that her time is absolutely invaluable, and can’t be bothered with tasks deemed even marginally difficult or complicated, no matter what the cost.
Likely purchases: landscaping (a.k.a. somebody to cut your lawn), pre-sliced vegetables, Geek Squad assistance, “baby concierge” services
The Hapless Negotiator
The haggling techniques of this squeamish, extremely non-confrontational individual consist of two phrases: “How much?” and “I’ll take it.” Known to perspire heavily in the presence of car salesmen, antique store clerks, and crotchedy old ladies at yard sales.
Likely purchases: inflated auto insurance, inflated cable/Internet/phone plans, car at anything close to sticker price
The Fine Print Ignoramus
Details, details. Who can be bothered with details? Not the fine-print ignoramus, who accepts too-good-to-be-true offers at face value and never investigates the likelihood of “gotchas.”
Likely purchases: “exploding” mortgage, credit card with “great introductory rates” (that only last six months), heavily subsidized cell phone with absurdly high early termination fee
The Shortsighted Sign-Me-Upper
Closely related to and sometimes overlapping with the fine-print ignoramus, the shortsighted sign-me-upper focuses solely on what he must pay to get his hands on the goods right now, and never considers how much the purchase will cost him down the line—or whether he’ll even want the product down the line.
Likely purchases: timeshare, car lease, store-affiliated credit cards, products on infomercials, QVC, and HSN (especially those with “low monthly payments”)
The Early Adopter (and Constant Upgrader)
If it’s been described with the phrase “the next great,” if it features an Apple logo, and/or if mere possession of one will cause strangers to stop in their tracks and stare, then the early adopter must have it. No matter what your opinion of this consumer, you should thank the early adopter’s pioneering ways, because while his actions may seem brave, forward-thinking, foolhardy, egotistical, or some combination therein, he serves a noble purpose: He pays full price and sometimes purchases clunkers so the rest of us wind up with sound gear for much less money later on.
Likely purchases: iPad, untested hybrid or electric car, endless series of smartphones, Blueray paraphernalia, a bajillion other hot new things by the time you read this
The Impulse Buyer (and Frequent Regretter)
Delayed gratification? By the time this consumer manages to say the phrase—which does have a lot of syllables, come to think of it—she has excitedly scooped up a handful of “must-have” trifles that caught her eye.
Likely purchases: shoes, purses, gag gifts, infomercial products (as gag gifts or otherwise), anything in a store window or near a checkout line
The Whiny Kid Appeaser
Pity this poor soul, whose buttons can be pushed by offspring with multifaceted manipulation skills way beyond their years. Sometimes, a child’s momentary melancholy glance down at the store shelf is all it takes to prod a parent into surrender, albeit with a moral victory via the words, “Just one, OK?”
Likely purchases: toys, DVDs, video games, florescent cereal, yogurt-like products featuring Nickelodeon characters
The Illogical Rationalizer
This well-intentioned but misguided consumer believes that spending money is an excellent means to save money. And while this logic sometimes holds true—for example, it makes sense to pay extra for a product that’s more durable than a cheaper one that’ll have to be replaced often—not spending money is generally an even better way to save. The illogical rationalizer also has a weakness for words such as “deal,” “discount,” and “half off,” and when confronted with questions about the worthiness of a given product at any price may respond defensively by saying, “But I had a coupon!”
Likely purchases: ride-on lawnmower, extended warranty, elaborate home improvement projects, random stuff you’d never otherwise purchase but bought anyway solely because it was “on sale”
The Creature of (Bad) Habit
The “habitual offender,” if you will, faces what is arguably the most difficult challenge in fixing one’s finances. Human beings are comforted by routine and repetition, and if changing one’s habits was easy, no one would have habits that are bad, unhealthy, or costly, at least not for long. The key to stopping bad habits is to stay focused not on what you’re giving up, but on the benefits of what you get from good habits. For instance, by cooking at home rather than eating out all the time, you’ll be healthier, you’ll spend more time together with your family, and you’ll have more money—which will come in handy when your kid gives you that desperately sad look at the toy store. Likely purchases: cigarettes, lottery tickets, Starbucks, fast food
REFERNCES
•Dr. Val Srinivas(2009),Principal Decitica, Marketing to the Post-Recession Consumers
•Brad Tuttle (July 23, 2010), Bound to Buy: The 10 Types of Consumers Who Inevitably Overspend
•Armstrong, G., Kotler, P. (2005). Marketing: An introduction. (7th ed.). [Electronic Version].
Saturday, October 29, 2011
CRITERIA FOR SELECTING MEDIA FOR INTERNATIONAL ADVERTISING
International advertising refers to advertising which is carried out in multiple countries around the world. In other words international advertising is advertising a product, idea or service across borders of the country of production/origin.
Effective international advertising requires specialized cultural knowledge that considers differences between target audiences in different countries.
For example, Proctor & Gamble went to great lengths to observe, listen, and understand the shaving needs and desires of men in India before introducing or advertising a single shaving product.
The way to success with international advertising initially understanding the needs, wants, and desires of consumers in a particular culture, making the necessary changes or innovations to products or services offered, and offering those products or services in a way that fulfills the needs of consumers.
Susan P. Douglas and C. Samuel Craig in their book International Advertising said it entails dissemination of a commercial message to target audiences in more than one country.
Target audiences differ from country to country in terms of how they perceive or interpret symbols or stimuli; respond to humor or emotional appeals, as well as in levels of literacy and languages spoken. In encoding a verbal message, care needs to be taken in translation. Numerous examples exist of translation problems with colloquial phrases. For example, an American Dairy Association entered Mexico with its "Got Milk?" campaign, and the Spanish translation read it as “Are You Lactating?”
Once the advertising message has been created, a media plan must be developed and specific media vehicles purchased to deliver the message to the target audience. The media through which messages are broadcasted also varies from country to country and must be carefully selected to broadcast ad messages.
A medium can be defined as “a channel of communication, information, or entertainment” (Mish 1989, 455).
A Quality media as interpreted by McIlroy and Walker (1993) means “fitness for purpose”, Juran (1989) also defines quality as “fitness for use”.
Hence any media that an advertiser selects for broadcasting messages must be fit to achieve its purpose of creating awareness and persuading or stimulating.
For a medium to be able to achieve the functions above, advertisers must be sure to select a quality medium. Below are some criteria for consideration before selecting a medium for international advertising;
•Nature of product
The nature of the product to be advertised influences the type of media to be selected for advertising. This is because some products cannot effectively be advertised using some medium to achieve good results.
For instance, let’s say a makeup company wants to advertise their products in Ghana, after answering these questions advertiser must come to a decision of selecting either television or newspaper to advertise makeup.
This is because a product like make up will need illustrations on the use and results of applying it; hence such an advert must be visual to achieve its aim of creating awareness and stimulating some interest in viewers, thus being cost effective.
Hence advertiser must select appropriate media to advertise appropriate product.
•Cost of media:
The first question advertisers must ask themselves before selecting a medium is…… Is the medium cost effective? Can it reach a wide enough audience? Is the medium cost affordable? (Peter J. P. 1999)
Answers to these questions above should lead advertiser to making a good choice to advertise his product. For instance, let’s say a makeup company wants to advertise their products in Ghana, after answering these questions advertiser must come to a decision of selecting either television or newspaper to advertise makeup.
This is because a product like make up will need illustrations on the use and results of applying it; hence such an advert must be visual to achieve its aim of creating awareness and stimulating some interest in viewers, thus being cost effective.
The cost of the media selected must also be economical or suitable or conform to advertiser’s budget.
•Accessibility / Availability of media:
Advertisers must ask themselves – Is the medium available and accessible? Does it facilitate wide distribution? Is it convenient to use for the product? How many people can be reached by the medium? (Peter J. P. 1999)
The medium that would be selected must be easily accessible to a lot of people because for response to product to be great then a lot of awareness must be created by thus media.
Medium selected should be able to reach a large number of people with just a single broadcast. With respect to example stated above, a medium like Tv3 would be suitable, this is because it will reach the right target of young women who use make up and would reach a large number of people even with one broadcast because of its nationwide coverage.
•Effectiveness of media
- Is the medium effective? Does it achieve its aim efficiently? Will the medium achieve required or expected feedback? (Peter J. P. 1999)
Media differ in their effectiveness in carrying different appeals. A message may, therefore, not get through to the audience because of people's inability to understand it (due to literacy problems), because they misinterpret the message by attaching different meanings to the words or symbols used, or because they do not respond to the message due to a lack of income to purchase the advertised product. (Susan P. Douglas and C. S. Craig)
Media limitations also play a role in the failure of a communication to reach its intended audience. (Susan P. Douglas and C. S. Craig, International Advertising).
•Social-Political Suitability of media:
Advertisers must ask themselves – Is the medium socially and politically suitable? Does its use coincide with social and political agendas of governing bodies? (Peter J. P. 1999)
Studies carried out by specialists and international agencies including UNESCO (1979, as cited in Da Silva & Esposito 1990) make it clear that “illiteracy and other educational disabilities are structural problems, closely associated with social, political, cultural, and economic factors”. The problem is that “there are significant levels of physical, linguistic, cultural, political and economic diversity within developing nations.
Hence advertisers are being asked to design messages to suit local environments in an effort to solve the social, political, and economic problems unique to nation they choose to advertise their product and medium selected for this purpose must support this effort.
Many nations are also eager to participate in world trade and become more prosperous. However, political and social organizations within the nations may be concerned about globalization as a threat to their way of life.
This impact is particularly evident in the Middle East region where information going in and out of the country, including Internet access, is highly restricted. Therefore advertiser must select media that is allowed to broadcast messages carefully crafted to consumers.
Advertisers must research or observe all these before selecting a medium appropriate for advertising.
•Cultural Friendliness of media:
Advertisers must ask themselves – Is the medium culturally appropriate? Does it coincide with the culture’s traditional way of living?
A criticism frequently leveled at international advertising is that it promulgates Western values and mores, notably from the US, in other countries.
This is viewed particularly negatively in societies with strong religious or moral values, which run counter to those of the West as, for example, Islamic societies in the Middle East.
When Western advertising depicts sexually explicit situations or shows women in situations considered as inappropriate or immoral, it is likely to be considered a subversive force undermining established cultural mores and values.
Equally, in some countries such as France, there is a strong negative reaction to the imposition of US culture, values and use of English in advertising. (Susan P. Douglas and C. S. Craig).
Hence advertisers must ensure that if it is television they select for their adverts, it does not contain images, symbols and songs that attract disapproval and frown from the target country because of their culture.
•Motivational Value of media:
- Is the medium motivating? Does it encourage listeners or viewers to take a step of trying the products? Does it persuade target consumers?
Media selected for ad must be able to achieve desired effect on target audience. It is aimed that after the consumer sees an ad they should be motivated to also want to try out the said product.
Therefore medium selected should be effective enough to create that feeling of in consumers. For instance with the example on makeup, when a TV is selected to broadcast this ad, after the viewer sees how the makeup looks good on someone, they are motivated to also want to try it out.
In conclusions, Media differ from country to country in their availability, effectiveness and efficiency in delivering an ad message, therefore an advertiser must carefully go through the required method of selecting a media which will be appropriate for promoting products internationally.
REFERENCES
• Peter J. Patsula (1999),Sookmyung Women's University, Seoul..
• Mayur (2009), International advertising.
• Susan P. Douglas and C. Samuel Craig, International Advertising ,New York University Stern School of Business
• De Mooij, M. 1998, Global Marketing and Advertising: Understanding Cultural Paradoxes. Sage Publications, Thousand Oaks, CA.
• Douglas, S.P. and Craig, C.S. 1995, Global Marketing Strategy. McGraw Hill, New York.
• Grein, A. and Ducoffe, R. 1998, Strategic Response to Market Globalization among Advertising Agencies. International Journal of Advertising, 17, 301-319.
• Hall, Edward T. 1976, Beyond Culture. Anchor Press, Garden City, NY.
• Peebles, D.M. and Ryans, J.K., Jr. 1984, Management of International Advertising: A Marketing Approach. Allyn and Bacon, Boston.
• Rijkens, R. 1992, European Advertising Strategies. Cassell, London.
Effective international advertising requires specialized cultural knowledge that considers differences between target audiences in different countries.
For example, Proctor & Gamble went to great lengths to observe, listen, and understand the shaving needs and desires of men in India before introducing or advertising a single shaving product.
The way to success with international advertising initially understanding the needs, wants, and desires of consumers in a particular culture, making the necessary changes or innovations to products or services offered, and offering those products or services in a way that fulfills the needs of consumers.
Susan P. Douglas and C. Samuel Craig in their book International Advertising said it entails dissemination of a commercial message to target audiences in more than one country.
Target audiences differ from country to country in terms of how they perceive or interpret symbols or stimuli; respond to humor or emotional appeals, as well as in levels of literacy and languages spoken. In encoding a verbal message, care needs to be taken in translation. Numerous examples exist of translation problems with colloquial phrases. For example, an American Dairy Association entered Mexico with its "Got Milk?" campaign, and the Spanish translation read it as “Are You Lactating?”
Once the advertising message has been created, a media plan must be developed and specific media vehicles purchased to deliver the message to the target audience. The media through which messages are broadcasted also varies from country to country and must be carefully selected to broadcast ad messages.
A medium can be defined as “a channel of communication, information, or entertainment” (Mish 1989, 455).
A Quality media as interpreted by McIlroy and Walker (1993) means “fitness for purpose”, Juran (1989) also defines quality as “fitness for use”.
Hence any media that an advertiser selects for broadcasting messages must be fit to achieve its purpose of creating awareness and persuading or stimulating.
For a medium to be able to achieve the functions above, advertisers must be sure to select a quality medium. Below are some criteria for consideration before selecting a medium for international advertising;
•Nature of product
The nature of the product to be advertised influences the type of media to be selected for advertising. This is because some products cannot effectively be advertised using some medium to achieve good results.
For instance, let’s say a makeup company wants to advertise their products in Ghana, after answering these questions advertiser must come to a decision of selecting either television or newspaper to advertise makeup.
This is because a product like make up will need illustrations on the use and results of applying it; hence such an advert must be visual to achieve its aim of creating awareness and stimulating some interest in viewers, thus being cost effective.
Hence advertiser must select appropriate media to advertise appropriate product.
•Cost of media:
The first question advertisers must ask themselves before selecting a medium is…… Is the medium cost effective? Can it reach a wide enough audience? Is the medium cost affordable? (Peter J. P. 1999)
Answers to these questions above should lead advertiser to making a good choice to advertise his product. For instance, let’s say a makeup company wants to advertise their products in Ghana, after answering these questions advertiser must come to a decision of selecting either television or newspaper to advertise makeup.
This is because a product like make up will need illustrations on the use and results of applying it; hence such an advert must be visual to achieve its aim of creating awareness and stimulating some interest in viewers, thus being cost effective.
The cost of the media selected must also be economical or suitable or conform to advertiser’s budget.
•Accessibility / Availability of media:
Advertisers must ask themselves – Is the medium available and accessible? Does it facilitate wide distribution? Is it convenient to use for the product? How many people can be reached by the medium? (Peter J. P. 1999)
The medium that would be selected must be easily accessible to a lot of people because for response to product to be great then a lot of awareness must be created by thus media.
Medium selected should be able to reach a large number of people with just a single broadcast. With respect to example stated above, a medium like Tv3 would be suitable, this is because it will reach the right target of young women who use make up and would reach a large number of people even with one broadcast because of its nationwide coverage.
•Effectiveness of media
- Is the medium effective? Does it achieve its aim efficiently? Will the medium achieve required or expected feedback? (Peter J. P. 1999)
Media differ in their effectiveness in carrying different appeals. A message may, therefore, not get through to the audience because of people's inability to understand it (due to literacy problems), because they misinterpret the message by attaching different meanings to the words or symbols used, or because they do not respond to the message due to a lack of income to purchase the advertised product. (Susan P. Douglas and C. S. Craig)
Media limitations also play a role in the failure of a communication to reach its intended audience. (Susan P. Douglas and C. S. Craig, International Advertising).
•Social-Political Suitability of media:
Advertisers must ask themselves – Is the medium socially and politically suitable? Does its use coincide with social and political agendas of governing bodies? (Peter J. P. 1999)
Studies carried out by specialists and international agencies including UNESCO (1979, as cited in Da Silva & Esposito 1990) make it clear that “illiteracy and other educational disabilities are structural problems, closely associated with social, political, cultural, and economic factors”. The problem is that “there are significant levels of physical, linguistic, cultural, political and economic diversity within developing nations.
Hence advertisers are being asked to design messages to suit local environments in an effort to solve the social, political, and economic problems unique to nation they choose to advertise their product and medium selected for this purpose must support this effort.
Many nations are also eager to participate in world trade and become more prosperous. However, political and social organizations within the nations may be concerned about globalization as a threat to their way of life.
This impact is particularly evident in the Middle East region where information going in and out of the country, including Internet access, is highly restricted. Therefore advertiser must select media that is allowed to broadcast messages carefully crafted to consumers.
Advertisers must research or observe all these before selecting a medium appropriate for advertising.
•Cultural Friendliness of media:
Advertisers must ask themselves – Is the medium culturally appropriate? Does it coincide with the culture’s traditional way of living?
A criticism frequently leveled at international advertising is that it promulgates Western values and mores, notably from the US, in other countries.
This is viewed particularly negatively in societies with strong religious or moral values, which run counter to those of the West as, for example, Islamic societies in the Middle East.
When Western advertising depicts sexually explicit situations or shows women in situations considered as inappropriate or immoral, it is likely to be considered a subversive force undermining established cultural mores and values.
Equally, in some countries such as France, there is a strong negative reaction to the imposition of US culture, values and use of English in advertising. (Susan P. Douglas and C. S. Craig).
Hence advertisers must ensure that if it is television they select for their adverts, it does not contain images, symbols and songs that attract disapproval and frown from the target country because of their culture.
•Motivational Value of media:
- Is the medium motivating? Does it encourage listeners or viewers to take a step of trying the products? Does it persuade target consumers?
Media selected for ad must be able to achieve desired effect on target audience. It is aimed that after the consumer sees an ad they should be motivated to also want to try out the said product.
Therefore medium selected should be effective enough to create that feeling of in consumers. For instance with the example on makeup, when a TV is selected to broadcast this ad, after the viewer sees how the makeup looks good on someone, they are motivated to also want to try it out.
In conclusions, Media differ from country to country in their availability, effectiveness and efficiency in delivering an ad message, therefore an advertiser must carefully go through the required method of selecting a media which will be appropriate for promoting products internationally.
REFERENCES
• Peter J. Patsula (1999),Sookmyung Women's University, Seoul..
• Mayur (2009), International advertising.
• Susan P. Douglas and C. Samuel Craig, International Advertising ,New York University Stern School of Business
• De Mooij, M. 1998, Global Marketing and Advertising: Understanding Cultural Paradoxes. Sage Publications, Thousand Oaks, CA.
• Douglas, S.P. and Craig, C.S. 1995, Global Marketing Strategy. McGraw Hill, New York.
• Grein, A. and Ducoffe, R. 1998, Strategic Response to Market Globalization among Advertising Agencies. International Journal of Advertising, 17, 301-319.
• Hall, Edward T. 1976, Beyond Culture. Anchor Press, Garden City, NY.
• Peebles, D.M. and Ryans, J.K., Jr. 1984, Management of International Advertising: A Marketing Approach. Allyn and Bacon, Boston.
• Rijkens, R. 1992, European Advertising Strategies. Cassell, London.
Wednesday, May 20, 2009
DIFFERENCES AND SIMILARITIES OF THE LIBERITARIAN AND SOCIAL RESPONSIBILITY THEORY OF THE PRESS
The Social Responsibility and Libertarian theory are basis upon which the free press should and does run in a democratic society. It is essential to examine these theories, noting their obvious similarities and differences, and through this form of socratic analysis, come to a conclusion as to not which theory is 'better' per se, but which holds most true to its ideals and to its assurances to society. Both theories have many similarities, and as such, one is seemingly an outgrowth of the other. However, in order to properly determine the relationship between the two and their association to the press, indepth examination proves essential.
It is obvious to note that the libertarian theory vastly differ from the resposibility theory, yet there are certain vital similarities that encompass both theories. the idea of progress, ddemocracy and modern trend of living outlines the rise of the libertarian theory where the media is given some sort of freedom to operate without state restriction. The social responsibility theory spells out freedom but it is much concerned with the duty of shaping to be better. In fact to state categorically the simillarities between the two theories, it cab be seen from a perspective that the following exist in both theories.
It is obvious to note that the libertarian theory vastly differ from the resposibility theory, yet there are certain vital similarities that encompass both theories. the idea of progress, ddemocracy and modern trend of living outlines the rise of the libertarian theory where the media is given some sort of freedom to operate without state restriction. The social responsibility theory spells out freedom but it is much concerned with the duty of shaping to be better. In fact to state categorically the simillarities between the two theories, it cab be seen from a perspective that the following exist in both theories.
- Freedom is prevalent in both theories without any restriction from state.
- They both define the same major functions of the media, which are transmission of information and the adoption of a forum for disparate views.
- Both theories also provide an avenie for the establishment of private media due to capitalism. Since both theories operate in the capitalist system, many private media houses are being established.
- Also in both theories, the media serves as a watchdog and supervises the society from certain abuses.
- The notion of free press and democracy in the libertarian and social responsibilty theories is false sine the media is faced with prosecution.
- They both abandoned the ideas of coveting knowledge as in the Authritarian system, and instead accepted scientific and socratic methods to arrive at the truth that is attainable by rational man. Although the Social Responsibility theory sees man as reluctant participant in seeking knowledge and truth, it concedes to the inadequacy that relying upon such methods of implementation, and regulating solely by forces such as the self-righting process is indeedd ineffective.
However, amidst the similarities, there are certain differences between the two theories.
- As much as the social responsibilty theory is expected to be accountable to the society in its performance, the libertarian theory flouts accountability.
- Again, there is self-censorship in the social responsibilty theory. Prior to this, the social resposibilty theory is suppressed in the performance of its functions not to abuse the society. Unlike the libertarian theory, there is no such thing as self-censorship, so the media can feed the society with abusive information without any restriction internally.
- To add to it, even though in both theories, there is objectivity, the social responsibility theory is subjective to the media in the interest of the state or authority.
- Under the social rsponsibilty theory, there is strict regulation. It is difficult to notice that the libertarian theory is taken through such regulations.
- Finally, the social responsibilty theory is also concerned with the code of ethics governing the various media houses. In contrast, the libertarian theory does not respect such codes.
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