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Assignment on Skimming Price and Penetration Price

   

Added on  2019-09-26

11 Pages3142 Words171 Views
CREATE THE VALUEAssignment 3Create the ValueAhmadrezaMohmmadiMKTG 2431August 2, 2016

CREATE THE VALUETable of Contents3.1 Diffusion 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..................................................................................53.3 Pricing 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 meet individual environmental and social needs. It also means an increased opportunity to add the quality of their personal life. On the other hand, a newly introduced item in the market for the marketers and involved companies significances signifies the beginning of a fundamental technique to for maintaining the competitive, profitable and the growth of an organization. From a marketing perspective, diffusion is used to describe a macro process that is related with the spread of a newly introduced item from its source the target consumers. Yet, adoption is a micro process that concentrates on various steps through which a particular consumer observes before either 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 a new product, as advertised by the Microsoft. Some of the major factors that are likely to influence the diffusion of this tablet include relative advantage, compatibility, complexity, trial-ability and observability (Microsoft). To begin with, the relative advantage of this tablet will affect the speed at which it will be diffused and adopted in the market. In this case, how improved the products appear to the end users will affect the speed of adoption. From the link provided, the Surface, which is the new product, is likely to have relative advantage. This is mainly because it can be used for various purposes, since it can be converted from a laptop to a tablet and the reverse.Secondly, this product is highly compatible and can easily be assimilated in different ways in the life of the consumer. For instance, the Surface, on the website is described as a product that can be used for the school work, office as well as in the studio. It is also highly convenient for the users. The third factor is complexity of the product. This factor proposes that products that are too complex are less likely to be diffused in the market. Ideally, this product has a touch sensitive screen, with an option of a keyboard. Thus, it is less complex and hence more likely to be adopted. Trial-ability proposes that an innovation that is relatively easy to experiment 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 diffusion 1

CREATE THE VALUErate. According to the website, the signature cover of the Microsoft is designed using luxurious materials, 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 as psychological 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 significantly influences the rate of diffusion in the market. In this case, the Microsoft can significantly relate the Surface with different cultures so as to capture the conservative consumers. For instance, the product might be sold preloaded with tens of hundreds of traditional recipes, languages, songs or even directions to popular joints that reflect the culture of the target market. The second recommendation involves increased awareness. Even though advertising a product is a sufficient marketing strategy, hyping it makes it more appealing. It also increases the desires of the buyers to try the new product as a result of enhanced awareness. The third marketing recommendation involves opinion leaders. Making use of such moves increases the awareness of the product as well as its popularity, increasing the rate of diffusion. This can be done by initiating strategic alliance with celebrities. In this case, the fans and loyal followers can be combined with the loyal clients of Microsoft, increasing the speed of diffusion of the Surface. Fourthly, Microsoft should initiate marketing strategies that are customers 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 other Microsoft products, to buy newly introduced items. The primary driver of such customer behavior is the reputation of the product, where the majority of consumers believe that all Microsoft products are of high quality. Lastly, another major factor that should be considered in increasing the speed of diffusion is promotion of the product. Even though this comes in handy with the creation of awareness, it requires its specific strategies.2

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