 2007 Thomson South-Western

Chapter Seven Facilitation of Product Adoption, Brand Naming, and Packaging  2007 Thomson South-Western

Chapter Seven Objectives • Appreciate marcom’s role in facilitating the introduction of new products. • Explain the innovation-related characteristics that influence adoption of new products. • Understand efforts employed by marketing communicators to manage the diffusion process. • Appreciate word-of-mouth communications in facilitating new product adoption.

Chapter Seven Objectives • Be familiar with the role of “buzz” in facilitating product adoption. • Understand the role of brand naming and the requirements for developing effective brand names. • Explain the activities involved in the brand-naming process.

Chapter Seven Objectives • Appreciate the role of logos. • Describe the various elements underlying the creation of effective packages. • Explain the VIEW model for evaluating package effectiveness. • Describe a five-step package-design process.

Marcom and New Product Adoption • Introducing new products is essential for most companies’ success and long-term growth • New idea and product failure-rate estimated 35-45% • Marketing communications facilitate successful new product introductions and reduce the product failure rate

New-Product Adoption Process Model Three stages of adopting a new product Awareness Class Trier Class Repeater Class

Relative Advantage • A product innovation is perceived as better than existing alternatives • Positively correlated with an innovation’s adoption rate • Exist when a new product offers: • Better performance, increased comfort, saving in time and effort, or immediacy of reward

Compatibility • An innovation is perceived to fit into a person’s way of doing things • The greater compatibility, the more rapid a product’s rate of adoption • Overcome perception of incompatibility through heavy advertising to persuade consumers

Complexity • An innovation’s degree of perceived difficulty • The more difficult, the slower the rate of adoption

Trialability • An innovation can be used on a limited basis prior to making a full blown commitment • The trial experience serves to reduce the risk of a consumer’s being dissatisfied with a product after having permanently committed to it through outright purchase

Observability • The product user or other people can observe the positive effects of new product usage • Higher the visibility, more rapid the adoption rate

Managing the Diffusion Process Objectives 1. Secure sales quickly - rapid takeoff 2. Achieve rapid acceleration - rapid acceleration 3. Secure maximum sales potential - maximum penetration 4. Maintain sales as long as possible - long-run franchise

Stimulating Word of Mouth Influence • Impersonal sources: information received from television, magazines, the Internet, and other mass-media sources • Personal sources: word-of-mouth influence from friends, acquaintances, and from business associates

Opinion Leader • A person who frequently influences other individuals’ attitudes or overt behavior • An informer, persuader, and confirmer • Influence is typically limited to one or several consumption topics • Influence moves horizontally through a social class

Opinion Leaders Market Mavens Individuals who have information about many kinds of products, places to shop, and other facets of markets, and initiate discussions with consumers and respond to requests from customers from market information.

Stimulating Word of Mouth Influence • Positive word-of-mouth communication is critical in the success of a new product of service • Unfavorable WOM has devastating effects because consumers seem to place more weight on negative information in making evaluations

Creating “Buzz” The systematic and organized effort to encourage people to talk favorably about a particular item (a product, service, or specific brand) and to recommend its usage to others.

Creating an Epidemic • The law of the few • The stickiness factor • The power of context

Igniting Explosive Self-Generating Demand • Design the product to be unique or visible. • Select and seed the vanguard. • Ration supply. • Use celebrity icons. • Tap the power of lists. • Nurture the grass roots.

Brand Naming Brand A company’s unique designation or trademark, which distinguishes its offering from other product category entries.

Power of Brand Name • Affects the speed with which consumers become aware of the brand • Influences the brand’s image • Plays major role in brand-equity information

The Brand Naming Process Step 1: Specify Objectives for the Brand Name Step 2: Create Candidate Brand Names Step 3: Evaluate Candidates Step 4: Choose a Brand Name Step 5: Register Trademark

The Role of Logos • Graphic design element that is related to the brand name • Companies use logos with or without brand names • Not all brand names possess a distinct logo but many do e.g., the Nike swoosh, Ralph Lauren’s Polo

Functions of the Package • Contain and protect the product • Draw attention to a brand • Break through competitive clutter at the point of purchase • Justify price/value to the consumer • Signify brand features and benefits • Motivate consumers’ brand choices

Packaging Structure • Sensation Transference: a tendency to impute characteristics from a package to the brand itself. • Gestalt-consumers react to the unified whole of the package not the individual parts.

Packaging Structure Color Design,Shape Size Physical Materials

Evaluating the Package: The VIEW Model Visibility Information Emotional Appeal Workability

Designing a Package

 2007 Thomson South-Western