Chapter 14 PT 2 Developing and Launching New Offerings Jestin Johnson PADM 7040

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 Maturity: after the hype of a new offering has rescinded, leveling off takes place.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.

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.

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)

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)

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.

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 ain’t broke…don'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”

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)

Stages in the Innovation Adoption Process 1.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.

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.

Values of Stages of Change model I.Acknowledges that there are necessary prescribed guidelines to follow in order to progress to a desired position. II.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. III.Specific models can be used to develop segmented approaches to change.

Innovation Characteristics Innovation characteristics 1.“Relative Advantage- degree to which it is perceive to be superior to previous ideas. 2.Compatibility- degree to which it is consistent with the values and experiences of the individuals in the target social system. 3.Complexity- the degree to which it is relatively difficult to understand or use. 4.Divisibility- degree to which it may be tried on a limited basis 5.Communicability- the degree to which the intended results are observable or describable to others.” (Andreason & Kotler, 2003 p.370)