Assignment on Skimming Price and Penetration Price

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CREATE THE VALUEAssignment 3Create the ValueAhmadrezaMohmmadiMKTG 2431August 2, 2016
CREATE THE VALUETable of Contents3.1Diffusion of Innovation and Product Concepts.........................................................................13.2 Product Management Concept...................................................................................................3A.Competitive Factors in Starbucks...........................................................................................3B.Marketing Concept..................................................................................................................4C.Starbucks Branding Strategy...................................................................................................5D. Marketing Recommendation...................................................................................................5E. Product Life Cycle of Starbucks Products..................................................................................53.3Pricing Strategy.........................................................................................................................6A. A &D of Skimming price and Penetration price for organizations.........................................6B.A&D of Skimming price and Penetration price for customers...............................................7References........................................................................................................................................9
CREATE THE VALUE3.1 Diffusion of Innovation and Product ConceptsTypically, a new product for the customers means an increased opportunity to meetindividual environmental and social needs. It also means an increased opportunity to add thequality of their personal life. On the other hand, a newly introduced item in the market for themarketers and involved companiessignificancessignifiesthe beginning of a fundamentaltechniquetofor maintaining the competitive, profitable and the growth of an organization. Froma marketing perspective, diffusion is used to describe a macro process that is related with thespread of a newly introduced item from its source the target consumers. Yet, adoption is a microprocess that concentrates on various steps through which a particular consumer observes beforeeither accepting or rejecting a newly introduced product in the market.Subsequently, there are various factors that tend to affect the speed of the adoption of anew product, as advertised by the Microsoft. Some of the major factors that are likely toinfluence the diffusion of this tablet include relative advantage, compatibility, complexity, trial-ability and observability (Microsoft). To begin with, the relative advantage of this tablet willaffect the speed at which it will be diffused and adopted in the market. In this case, howimproved the products appear to the end users will affect the speed of adoption. From the linkprovided, the Surface, which is the new product, is likely to have relative advantage. This ismainly because it can be used for various purposes, since it can be converted from a laptop to atablet and the reverse.Secondly, this product is highly compatible and can easily be assimilated in differentways in the life of the consumer. For instance, the Surface, on the website is described as aproduct that can be used for the school work, office as well as in the studio. It is also highlyconvenient for the users. The third factor is complexity of the product. This factor proposes thatproducts that are too complex are less likely to be diffused in the market. Ideally, this producthas a touch sensitive screen, with an option of a keyboard. Thus, it is less complex and hencemore likely to be adopted. Trial-ability proposes that an innovation that is relatively easy toexperiment with is high likely to be adopted. At this point, the Microsoft website does not offer auser friendly website where a person can easily operate a virtual tablet. Therefore, this is likely toreduce the rate of adoption. The observability of this product is likely to increase its diffusion1
CREATE THE VALUErate. According to the website, the signature cover of the Microsoft is designed using luxuriousmaterials, making the product beautiful and wonderful to the touch.Incidentally, there are other relevant non-product related factors that might also influencethe rate of diffusion of innovation. Most of these factors are based on the consumer behavior.They include psychological factors, age, perceived value, modernity and awareness. Personally,the major factors that influence me to buy new products include awareness as well aspsychological factors. It is highly likely that I buy a product, which is trending in the market.Also, the product must meet my personal desires so that I can fit in the social class.The Surface, as it is being advertised by the website seems to be a good product, in whichthe diffusion rate can be increased steadily. As previously indicated, modernity significantlyinfluences the rate of diffusion in the market. In this case, the Microsoft can significantly relatethe Surface with different cultures so as to capture the conservative consumers. For instance, theproduct might be sold preloaded with tens of hundreds of traditional recipes, languages, songs oreven directions to popular joints that reflect the culture of the target market. The secondrecommendation involves increased awareness. Even though advertising a product is a sufficientmarketing strategy, hyping it makes it more appealing. It also increases the desires of the buyersto try the new product as a result of enhanced awareness.The third marketing recommendation involves opinion leaders. Making use of suchmoves increases the awareness of the product as well as its popularity, increasing the rate ofdiffusion. This can be done by initiating strategic alliance with celebrities. In this case, the fansand loyal followers can be combined with the loyal clients of Microsoft, increasing the speed ofdiffusion of the Surface. Fourthly, Microsoft should initiate marketing strategies that arecustomers oriented. This will increase the satisfaction of the clientele, increasing the image of theorganization and its products. Eventually, more customers will flock to the Surface, among otherMicrosoft products, to buy newly introduced items. The primary driver of such customerbehavior is the reputation of the product, where the majority of consumers believe that allMicrosoft products are of high quality. Lastly, another major factor that should be considered inincreasing the speed of diffusion is promotion of the product. Even though this comes in handywith the creation of awareness, it requires its specific strategies.2
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