Product based characteristics of diffusion

Rogers (1995) identified the role of product characteristics in determining the successful diffusion of products into the market. The characteristics were: relative advantage; compatibility; complexity; trialability; observability. Meuter et al (2005, p.81) writing in the Journal of Marketing provided some of the measures that can be used to assess each of these. For example, respondents were asked about trialability using the following questionnaire items: 

• I can use the [innovation] on a trial basis to see what it can do.
• It is easy to try out the [innovation] without a big commitment.
• I’ve had opportunities to try out the [innovation] 

In contrast observability was measured in the following way: 

• I would have no difficulty telling others about the results of using the [innovation]. 
• I believe I could communicate to others the outcomes of using the [innovation]. 
• The results of using the [innovation] are apparent to me.

ith innovations such as the Copenhagen wheel (see video below) it can be interesting to assess how they rate using the criteria such as the ones above.

Co-creation Matrix

There's an increasing number of concepts around the notions of co-production and co-creation. The following matrix helps provide a useful map to navigate between them. The matrix distinguishes between the concepts according to whether they are consumer led or producer led and whether the value being generated is standardised across customers or personalised for the individual.

The complete report from which it is taken is here:

http://personal.lse.ac.uk/samsona/cocreation_report.pdf

Burden of the first mover - teaching customers

This Apple advert shows customers how they can use their iPads.

I think this is an interesting illustration of what happens when a marketer has to anticipate and teach customers their needs, rather than just reacting to them.

The importance (to marketers) of dissatisfaction

Intuition and marketing texts make the importance of customer satisfaction to marketers pretty obvious. Customer dissatisfaction is similarly considered to be obviously bad news. However, there can be instances where dissatisfaction serves a purpose and could even be engineered.

A short while ago there was some analysis undertaken by Neil Cybart about the storage that Apple provides for its smart phones. The assessment was that the 16GB memory option may make the range seem affordable to customers (a lower headline price), but the 16GB option was also supposed to encourage the realisation amongst customers that it was not adequate for their needs. As a result in year two these people would migrate to the 64GB version, which may be more than adequate for their needs.

“While some may say this discussion of purposely limiting storage capacities to help maintain profitability is anti-consumer and a money grab, observers need to look at this process as a bit more than just greed. ”

— http://www.aboveavalon.com/notes/2014/12/18/apple-will-save-3-billion-in-2015-by-selling-16gb-iphone-66-plus

That this is not a new idea is reflected in the comment made by Oliver (1997, p9), he goes on to cite a General Motors executive who is supposed to have said that the company's corporate mission was the 'organised creation of dissatisfaction'. 

“one purpose of new products is to create dissatisfaction with the prevailing style, a common strategy of automobile companies through the release of new models”

— Oliver RL. 1997. Satisfaction: A Behavioral Perspective on the Consumer. McGraw Hill: New York.

Positioning supported by packaging

The Jax Coco example shows how a firm can position a product, that is otherwise similar to others, in such a way that it is seen as being different to competing offers. Also in this instance the packaging chosen supports the position that the firm is trying to achieve.

“Jax Coco’s concept of elevating the natural drink to one of sophistication sets the brand apart from the numerous others. Jane states, “We positioned Jax Coco coconut water as a lifestyle product. Our competition has mainly focused on the sporting sector. We expanded into art, music, and lifestyle.” The company has sponsored Elton John concerts, a charity performance by Chinese classical pianist Li Yundi, and English rugby player Chris Ashton.

Jane highlights another branding difference that sets Jax Coco apart from the rest ‒ the glass bottle. This is unique in the coconut water market, and has been geared toward premium food and beverage clientele, as it’s a sophisticated step up from a Tetra Pak. Restaurants, clubs, bars, hotels, and first class lounges of Eurostar trains stock Jax Coco’s glass bottle; in addition, retailers, Whole Foods, Amazon, Vitacost and Starbucks (Hong Kong) carry both the bottle and Tetra Pak. Cathay Pacific, awardee of Skytrax’s 2014 Airline of the Year, and Asia’s largest international carrier, has reported that it too will offer Jax Coco’s coconut water in its lounges and on selected flights.”

— https://www.credit-suisse.com/uk/en/news-and-expertise/news/entrepreneurs.article.html/article/pwp/news-and-expertise/2015/02/en/jax-coco-coconuts-conquer-the-lifestyle-market.html

▶ Huawei - more watch symbolism

The video illustrates how, for watches at least, this marketer tries to develop an innovation that looks and feels as much as what people have become used to wearing.

Credibility in advertising

One of the most widely commented limitations of using advertising is that viewers tend to discount the claims being made, because the advertiser has an incentive to present only the positive aspects of the product.

The following advertisement challenges this.

Unlike most adverts you'll see people actually saying that they hate the product. This is effective in a number of different ways and not least because the viewers will tend to view the marketer as being honest.

How to use a Leica M Rangefinder: Craig Semetko

This video shows potential customers how they can spend 10x more than they would for competing products in order to buy something that is actually more challenging to use. Then again he is talking about a Leica - the only brand other than Apple I ever heard Steve Jobs mention at an Apple keynote presentation.

“10:32AM “You gotta see this in person. This is beyond the doubt, the most precise thing, and one of the most beautiful we’ve ever made. Glass on the front and back, and steel around the sides. It’s like a beautiful old Leica camera.””

— http://leicarumors.com/2010/06/07/steve-jobs-on-the-new-iphone-4-its-like-a-beautiful-old-leica-camera.aspx/

This point is also picked up in the following news article:

“I love my camera. I love it even though I took terrible pictures with it for a month. I love it even though I have to adjust the aperture, worry about depth of field and annoy my family while I twiddle with its metal knobs. I love it because it makes me think: about light, colour, composition. I take fewer pictures with it than I take with my phone, but much better ones. And I’m not alone in my love for my camera. While sales of point and shoot technology continue to decline, the market for fiddly manual cameras is growing nicely.”

— http://www.theguardian.com/commentisfree/2015/mar/04/why-we-should-design-things-to-be-difficult-mastery

So some references then, to the hedonic benefits that customers can derive from this brand, and there are some more after this video.

I think the following comments from a review of the camera on DigitalSpy give some indication of its hedonic attributes:

“When you consider what you could buy for more than £5,000 plus the cost of a lens, the Leica M starts to look overpriced. Is it worth spending all that extra dough when your photos are only slightly better? Assuming, of course, you get the composition right. Perhaps not. But then this camera is not for those on a budget or the penny conscious.

Like an expensive Ferrari turns a mundane drive into something special, the Leica M brings back the satisfaction from photography mastery.



”

— Read more: http://www.digitalspy.co.uk/tech/review/a573573/leica-m-typ-240-review-keepin-it-old-school.html#ixzz3TIr488Z1 Follow us: @digitalspy on Twitter | digitalspyuk on Facebook

Going back to the comparison with Apple, DPreview.com had this to say about the Leica T (which is made from a single block of aluminium), 'This, you can't help but feel, is the kind of camera that Apple might make, if it were so inclined.' http://www.dpreview.com/previews/leica-t-typ701

Ryanair's reintermediation

Last year Ryanair went back to using a GDS (global distribution system) and struck a deal with Amadeus. Until that time Ryanair had sought to sell its tickets only via its online presence. The Amadeus will enable Ryanair to sell tickets via travel agents and to customers who would otherwise not have bought directly from the company

More about Amadeus:

“Today over 70 low fare airlines have chosen Amadeus as their distribution partner and low fare airline bookings via the Amadeus system increased by 21% during 2013. Since its introduction in 2007, Amadeus’ XML link has enabled low fare airlines to benefit from the reach and yield provided by travel agency distribution without the complexity associated with traditional ticketing processes for airlines. Amadeus’ Light Ticketing enhancements were first deployed by a low cost airline in 2013, allowing travel agents to use standard pricing workflows whilst being able to access the airline’s content from the standard neutral availability flow, modify PNRs and finalise the booking process with the creation of ticket numbers – just as they do when booking traditional flag carriers.
”

— http://www.amadeus.com/web/amadeus/en_1A-corporate/Amadeus-Home/News-and-events/News/2014_9_24_Ryanair-partners-with-Amadeus-for-travel-agency/1319560217161-Page-AMAD_DetailPpal?assetid=1319606953943&assettype=PressRelease_C

Pebble watch, innovation and fund-raising.

The product lifecycle concept refers to the adoption of an innovation by end-customers, since the vertical axis can be measured in terms of sales. The Pebble story is an interesting one insofar as it takes place in a world where consumers can also be investors and the firm's performance so far has shown how the two domains of fund-raising and consumer marketing can overlap. By appealing to consumers in terms of fund-raising the firm is also hoping to validate its technology and appeal in a way that focusing on private equity may not necessarily have done.

Co-creation at Lego

Lego has announced its annual results for 2014. The FT describes the firm as having come back from a 'near death experience' to being the largest toy company in the world. This is a corporate presentation by Connie Kalcher. She explains how Lego has sought to engage customers.

Spiral of silence

Writing in the Academy of Management Review, Clemente and Roulet (2015) deal with the 'spiral of silence', which explains how public opinion is formed. Individuals avoid expressing views publicly that they think are marginalised. As a result, 

“members of a minority ae less likely to express their opinion, while members of a majority are more likely to express theirs. These dynamics lead to the emergence of a dominant opinion.”

— Clement & Roulet (2015:101)

Clemente, M., and Roulet, T. J.  (2015) Public opinion as a source of deinstitutionalisation: A 'spiral of silence approach', Academy of Management Review, Vol. 40, No. 1, 96–114. 

Behavioural economics and health

Keeping the motivation to go to the gym can be difficult. Pact uses behavioural economics to address this. 

Loss aversion, the fear of losing money is 2.5 times more effective in changing behaviour than receiving a reward. One of the founders of PACT is an endocrinologist and he finds the incentive aspect of the app important, clearly having information about the benefits of exercise is not enough.

There's more about this in the following story in the FT:

http://www.ft.com/cms/s/0/11f7908c-b796-11e4-8807-00144feab7de.html#axzz3SZcSZEef

Market driving and market driven - the case of impressionist art

For many years the Bible of marketing, Kotler's text on the subject, held forth that marketing oriented firms responded to customers' needs and wants, while the less sophisticated product oriented firms were fixated on selling customers whatever it was that they were making.

In more recent years Kotler has made the subtle distinction and now also refers to 'market driving' firms, those whose products may not immediately be seen by customers as meeting a need or want, but which ultimately become successful.

The following story in the Guardian newspaper is a good example of an historical illustration of this. It's particularly useful since nowadays it is often technology businesses that are given the label of being market-driving.

“Innovative artists needed an innovative dealer and Durand-Ruel’s particular genius was not just to spot the talent of the young impressionists, but to promote them indefatigably and create a market for them where previously there had been none.

To gain them the recognition he was convinced they deserved, he developed a range of new ways of promoting them that redefined the relationship between dealers and artists.

He found himself and his charges “attacked and reviled by upholders of the academy and old doctrines, by the most established art critics, by the entire press and by most of my colleagues”.

Among the other methods used to bolster his artists, Durand-Ruel would sell works through other dealers on a profit-sharing basis, and he did this with collectors, too. He would lend works against business capital and buy his own artists’ paintings at auction to inflate the price. He also opened his own house to visitors on Tuesdays, when the main galleries were closed, so that his collection of impressionist works could be seen. ”

— http://www.theguardian.com/artanddesign/2015/feb/21/the-man-who-made-monet-how-impressionism-was-saved-from-obscurity

Generalised exchange and carbon offset

The following video shows how Toyola stoves in Ghana have been able to market a product that saves consumers money by using lower levels of charcoal. This also has a clear positive impact on the environment, by reducing the number of trees that have to be cut and also generates health benefits, since the more efficient stoves also create less smoke.

However the cost of the stoves can be too high for local consumers. This provides an opportunity for carbon-offer schemes:

“Carbon offset projects around the world enable you to immediately meet your carbon reduction target and finance the development of crucial renewable energy and resource conservation activities. Many projects also deliver benefits to communities and biodiversity, providing a positive association for your brand.”

— http://www.carbonneutral.com/carbon-offsets/carbon-offset-project-videos

Such schemes make the stoves more affordable and enable polluters in richer countries to meet their carbon emission targets.