Generic Category
Items that are technically similar
Risk
Relative advantage
Relative simplicity
Compatibility with current
behaviour
Ease of small trial use
Ese of ommunication benefits
2.5% of individuals
High income earners
receptive to new ideas
13-14%
Opinion leaders early adopters
Participate in communities
34%
active in community Early majority
No risks - product successful
before they adopt it
34%
Adopt whe forced to
rarely assume leader role
16%
The most local
Resist change
1. Awareness
Levels of analysis Product type
2. Interest Markets and Industries Product class e.g cereal
3. Evaluation
Adoption process
4. Trial A market is comprised of
individuals and organisations who An industry is a group of firms
are interested and willing to buy a that offer a product or class of
5. Adoption good or service to obtain benefits products that are similar and are 1. Change in Industry's growth
that will satisfy a particular need or close substitutes for one another rate
want and who have the resources
to engage in such a transaction 2. Changes in key buyer
segment
Macro level issues - Driving 3. Diffusion of propriety
forces (Michael Porter) knowledge
4. Changes in cost & efficiency
3. Diffusion of Innovation Rivalry is greater if:
Theory 5. Changes in Government
Rate of Adoption depends on: regulations
Seeks to explain the adoption of a High investment intensity
product /service over time amongst a
group of potential buyers No dominant firm exists / only
1. Rivalry among present small fims
competitors
Little product differentiation
The greater the competitive
rivalry the less attractive the
industry High cost to changing suppliers
Porters 5 Competitive forces
Module 5 (determines industry's long term
attractiveness) Entry is more difficult if:
Industry Analysis Strong economies of scale are
Innovators
and present
Competitive Advantage Industry Analysis to
Industry has strong capital
determine attractiveness of 2. Threat of new competitors requirements
Industry: Strong product differentiation
The greater the threat of new
entrants, the less attractive the exists
industry Gaining distribution is particulary
difficult
Introduction
Impact is significant if:
Growth
Limited # of suppliers service
Shakeout
different industries
Adopter categories
Maturity
Switching costs of substitutes is
high
Product life cycle 3. Bargaining power of suppliers
Decline
They can threaten forward
integration
The greater the bargaining
Late majority PAGE 55 - marketing mix power of suppliers, the less
decisions in life cycle phases attractive the industry Suppliers product is large part of
buyers value add
Put a ceiling on the profitability
of an industry by limiting the
price that can be charged Extent of power depends on:
Substitute products are
alternative product types (not 5. Threat of substitute products Extent of buyer concentration
Laggards brands) that perform the same
functions e.g cans vs bottles
Switching costs
4. Bargaining power of buyers
They can threaten backward
integration
The greater the power of high
volume customers, the less Buyer profitability - if buyer
attractive the industry earns low profits more agressive
negotiations