Comilla University

Department of Management Studies

Term Paper On-
“Introducing New market offering.”
Course Title: Marketing Management
Course Code: 415
Submitted to:
Md. Jahid Hasan
Lecturer,
Department of Management Studies
Comilla University.
Submitted by: Group “09” (Session: 2016-17)

Name Class ID Status Remarks

Md Golam Kibria 11705014 Member
Md. Mehadi Hasan 11705029 Member
Md. Sohel Howladwer 11705031 Member
Eshita Talukdar 11705048 Member
Shahnewaz Tamim 11705056 Member
Mahedi Hasan 11705058 Group Leader

Date of Submission: November 30, 2020

 LETTER OF TRANSMITTAL

30 November., 2020
The course instructor
Md. Jahid Hasan
Lecturer in Management studies
Comilla University Bangladesh
Subject: submission on Term Paper on “Introducing New market offering”
Dear Sir,
We submit here our term paper as you assigned us to prepare. You asked us to prepare a term paper
on “Developing new market offering” It is an enormous prospect to prepare a term paper on this
subject after a pre-planned procedure. This term paper has helped us to increase our
understandability on the practical field of the marketing related aspects. By preparing this term
paper, we have identified ample information about implementing a new business idea with respect
to the competitive global market. During the preparation of this term paper, we have enforced our
best effort. It surely enriches our knowledge and understanding and promotes our study. Thank you
for giving us such an opportunity for working on the topic. We will be honored to provide you any
additional information, if necessary.
Sincerely yours,
Group-09
On the behalf of group
Mahedi Hasan (Group Leader)
(id: 11705058)
 Acknowledgement

First of all, we would like to say our special thanks to almighty God and pay d e e p
respect to
Md. Jahid Hasan
Lecturer in Management studies
Comilla University Bangladesh department of BBA,

Due to your generous a n d f r i e n d l y g u i d a n c e . W e a r e a l s o g r a t e f u l t o

y o u f o r h e l p i n g u s t o understand some minute issues as well as those issues, which
we have failed to understand. We would like to express our deepest gratitude and
thanks to those people who have provided us assistance, guideline, support and co-
operation while preparing this report. W e a l s o l i k e t o g i v e o u r h e a r t i e s t t h a n k s t o
Md. Jahid Hasan, lecturer in Management studies d e p a r t m e n t of B B A , Comilla
University Bangladesh for your valuable advice. Without your support it would have been
very difficult for us to complete this term paper. We would remain every to different
personnel of various person who have helped us. Our special thanks goes to the
respondents and my friends for their kind inspiration, patiently, understanding and co-
operation, extended to us during the course of the term paper
Faculty Members of the CoUB for their encouragement and valuable suggestions. We also
deeply wish to express our gratitude to our friends and well-wisher for helping me in making
this term paper for a grand success.
 Executive summary:

Most firms recognize the necessity for and advantages of regularly developing new products and
services. Mature and declining products eventually must be replaced with newer products. New
product development strategy thus is one of the most important activities for any firm in the
contemporary marketplace. If the firm does not obsolete its own products, eventually someone
else will, and all firms should remember that a good idea might not be a good investment.
New products can fail, and the risks of innovation are as great as the rewards. The key to
successful innovation lies in developing better organizational arrangements for handling new
product ideas and developing sound research and decision procedures at each stage of the new product
development process.
The new product development process consists of eight stages: idea generation, idea screening,
concept development and testing, marketing strategy development, business analysis, product
development, market testing, and commercialization. The purpose of each stage is to decide
whether the idea should be further developed or dropped. The company should minimize the
chances that poor ideas will move forward and good ideas will be rejected.
With regard
to the adoption of new products, consumers and/or organizations respond at different
rates, depending on their characteristics and the product’s characteristics. Manufacturers try to
bring their new products to the attention of potential early adopters, particularly those with
opinion leader characteristics.
 Table of Contents

1 INTRODUCTION.................................................................................................................01
1.1 Objective of the study ..........................................................................................................02
1.2 Scope of the study ................................................................................................................02
1.3 Limitation of the study..........................................................................................................02
2 New production ......................................................................................................................03
2.1 Types of new product ........................................................................................................... 03
3. Challenges in new product development.............................................................................04
3.1 The innovative imperative.....................................................................................................04
3.2 New product success.............................................................................................................04
3.3 New product failure...............................................................................................................05
4. Organizational arrangements..............................................................................................05
4.1 How to budget for a new product or service.........................................................................05
5. Organizing for new product development..........................................................................06
5.1 New product committees......................................................................................................06
5.2 New product development....................................................................................................06
6. Managing the new product development process (Idea)...................................................07
7. Concept development & testing...........................................................................................08
7.1 Product concept...................................................................................................................08
7.2 Concept development...........................................................................................................08
8. Concept testing.....................................................................................................................09
9. Marketing strategy development.......................................................................................10
10. Commercialization.............................................................................................................11
10. Function of commercialization............................................................................................12
10.1 Function of commercialization..........................................................................................12
11. Marketing mix...................................................................................................................13
11.1 Types of consumer goods market testing...........................................................................13
12. The consumer Adaption process………………………………………………………...15
12.1 factors influencing the adaption process………………………………………………….16

13 Conclusion ...................................................................................................................... ….18

Chapter-01. Introduction

introducing New Market Offerings is a process through which development of new core products or
services takes place in order to augment them for building market offerings, and bringing them to market.
In the present globalization era, the rapid product development strategies are being adopted for winning
the competitive advantage as well as the first mover advantage. However, the core of these strategies is
the market orientation concept that is incorporating the customers’ needs and wants in the new market
offerings.

Inc.’s iPod and phone with innovative features based on customers’ needs and satisfaction have been the
results of its new product development strategy. Moreover, these innovative products have also enabled
Apple Inc. to win the first mover and competitive edge over its major rivals such as Blackberry, HTC,
and Nokia etc. new product development and introducing new solutions in the market helps an
organization to strengthen its market position. As we have observed once Apple Inc.   Staggering for
survival in late 2005 in the pc market, however, with the inception of smartphone and music player,
Apple lifted its market position and created a new market of touch smartphones with rich innovative
applications.
Apple, in fact, created a blue ocean for its growth and focused its directions to the rich touch smartphone
and music player. That market was at that time was unexplored which also helped Apple to make huge
profits and become unparalleled until recently. However, this blue ocean now has started to become red
Ocean with the new entrants such as HTC, Nokia, Blackberry, Samsung etc.

New market offering also enables an organization to optimize its resource utilization. Apple shifted its
resources from being a PC maker and decided to enter a new market for the smart mobile phone.   This
strategy not only made it a global brand image and the major rival of Blackberry (RIM inc.) but also
enabled it to revive its growth in the pc market. Moreover, new market offering and product development
strategies become a vehicle for organizational enhancement and renewal. iPod and iPhone have won the
hearts of people throughout the world. In addition, these products have revolutionized Apple Inc. and
opened many new electronics markets and other segments where it can make its way.

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1.2 Objective of the study.
The objective and scope of this Term paper is spanned over the following areas: -

a. To identify the most challenges that a company face in developing new products and services.

b. To identify organizational structures and process that manager use to oversee new product
development.

c. To identify the main stages in developing new products and services.

d. To identify the best way to manage the new product development process.

e. To know the factor that affect the rate of diffusion and consumer adaption of newly launched
products and services.

1.3. Scope of the study

This term paper aims at making an in-depth study of introducing new market offering in Bangladesh.

1.4 Limitation of the study

1. introducing a new market offering has always been a big challenge for many small as
well as large companies

2. Entering into the new market with new product presents various choices for a firm
such as licensing, franchising, and joint-venture etc. each alternative mode of market
entry offers various risk-control and trade-off the firm desires.

3. The potential threats and risks from the financial and marketing side are also required
to be considered while making a choice of market-entry with new market offerings. At
the point of entry, firms usually face financial risk as a major one that can be minimized
by low-intensity alternatives of market entry such as market penetration. 

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 Chapter 2: New product option:

A product option used for the product that come in various variations.

2.1 Make or buy:

A company can affix new products through development. A make or buy decision is an act of choosing
between manufacturing a product in house or purchasing it from an external supplier. But firms can make
many acquisitions. There becomes an urging need for organic growth – the improvement of new product
from within the company. For product improvement, the firm can create new products in its own laboratory
or it can covenant with independent researcher. The acquisition way can take three forms.

 The company can purchase from other company

 It can purchase license or franchise from other companies
 It can get patents from other company

For example, Swiss food giant Nestlé reached it’s availability in North America via it’s achievement of such
various brands as Hills Brothers, Carnation and Chef America.

2.2Types of New product:

There are various kind of new products. They all are quite different from each other.

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  New to the world
New products limit from new to the world products that makes a completely new market at one end.
It allows the firm to enter in the existing market. The alternative evaluation of new products already
indicates what most consumer would define as a new product.
For example, the iPod and iPad, Polaroid Camera etc.
 Improvement and revision of existing product
Recent products made better.
For example, Wheel power white have been revised numerous times throughout their history
 Repositioning
That is the product are retargeted for a new use or application. It is becoming quite difficult to
identify products that will transform a market. But continuous improvement to better customer needs
can force competitors to play catch up. Product innovation and feasible marketing programs have
approved these firms to increase their “marketing footprint”.

Chapter 3: Challenges in New Product Development:

New product indication has accelerated in present years. In many companies, such as retailing, electronics,
customer products etc. takes time to launching product to market.

3.1 The innovative imperative

In economy of quick change, continuous improvement of innovation is important. Highly innovative

companies are able to identify and rapidly seize new products scope. Innovative firms develop a positive
attitude towards innovation and risk adopting, routinize the innovation process and assume their people to
trial and even fail.

3.2 New product success

 Incremental innovation: Most recognized firm’s focus on incremental innovation. Incremental

innovation can assume companies to enter new markets by pinching products for new customers, use
different core product to continue the market and create temporary solution for industry wide
problems. For example, Southwest Airlines has created some famous incremental innovations.
 Disruptive technologies: Recent firms create disruptive technologies that are cheaper and more
likely to change the competitive position. Recognized companies can be slow to respond or invest in
these disruptive technologies because they forebode their investment. Then they figure out
themselves moving new competitors and many fail. To ignore this trap, firm must sincerely monitor
the preference of both consumer and non-consumers overtime and difficult to explicit customer
needs.

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 Most of the company carefully identifies the target market, product necessity and advantages before
proceeding. Other success factors are marketing synergy and market attractiveness.

3.3 New product failure

New product failure can lay down for many reasons. Such as avoiding
market research, overestimates of market type, high prosperity costs,
imperfect design, wrong price etc. There are also some additional factors
obstructing new products improvement.

 Shortage important ideas in certain areas: There may few

process left to develop some initial products such as detergents
 Fragmented markets: Firm’s must target their new products at smaller market segments.
 Social and governmental constraints: New products must satisfy customer safety and demand
concern.
 Cost of development: A firm must create many ideas to find just one valued development and often
faces marketing expenditures.
 Capital shortage: Some firms with good concept cannot develop the fund research.
 Shorter required development time: Companies must gather experience how to reduce time by
using new methods, skill full partners, early ideas test and forward market planning.

Chapter 4. Organizational Arrangements

Many firms use customer-driven engineering to develop new products, incorporating customer preferences
in the final design. Some rely on internal changes to develop more successful new products.

4.1How to Budget for a New Product or Service

Building a budget for a new product or service can be a daunting task. Whether developing a new service for
a landscaping business or creating a new piece of software for the iPhone, the steps to success are the same.
Follow the six P’s of new product planning and budgeting to increase profitable product introductions.

 Project the demand: Is there a market for the product? What are the characteristics of the market as
far as number of customers, competitors, average selling price, volumes, market barriers, and so on?
 Provide the specification: When asking the company engineers or developers to provide a good
estimate on what it will cost in time and money to develop a product, give them a detailed
specification for what features the product requires to meet customer needs. If you do not give a
relatively complete specification, the accuracy of rules 3 through 6 will suffer. Generating a good
product specification is the most important step to accurate budgeting for new products and services.
 Plan the development: Based on the specification from rule 2, the development team will provide
estimates on how long and how much money it will take to develop the product. Get separate
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 estimates on each major feature of the specification so feature decisions can be made as quickly as
possible while minimizing the number of cycles through the budgeting process.
 Produce the product: Work with the production and development team to determine a cost estimate
for producing the product. Look at the sales margin (based on average sales price and the production
cost) to see whether it meets the company’s gross margin requirements.
 Promote the product: What kind of sales collateral needs to be produced? What sales channel is
needed to sell the product? How much is the chosen sales channel going to cost?
 Provide the product: What does it take to provide the developed product to the customer in terms of
costs and time? In the case of a service, the bulk of the cost is in providing the service. In the case of
a physical product, the costs may include shipping, installation, maintenance, and warranty service
costs.

Each of these rules needs to be budgeted in terms of time and dollars. Unfortunately, it is difficult to
accurately estimate costs for rules 3 through 6 without doing a thorough job on rules 1 and 2. The more
complex the product or service, the more difficult the budgeting process. Because of this, managers often go
through the entire rule list two or more times to tighten up the estimates and span times. For example, if a
product specified in rule 2 is deemed too expensive by either the developers (No. 3) or the production people
(No. 4), the product will need to be bounced back up to rule 1 or 2 for modification. These repeat planning
cycles cost time and money.

Chapter 5. Organizing for new product development

firms must be organized so personnel can stimulate and coordinate new product development.

5.1 New product Committees

 most common arrangement for new product development.

 primarily review and evaluate others new product plans rather than develop their own.
 Tend to move slowly and conservatively in large companies.

5.2 New product Developments

 Encourage innovation as a full-time activity.

 Department head typically has substantial authority.

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6. Managing the new product development process (Ideas)

 Idea Generation

The fact only few ideas are good enough to be commercially successful. New product ideas can come from
several sources. They may come from internal sources marketing managers, researchers, sales personnel.
Inventors and other ''creators'' represent a key source of technological innovation and product ideas from
outside the company. Correcting ideas according to internal and external sources is called idea generation.
Internal source means when company take ideas to cooperate their internal employees. In this process
employee research new product development. And external source means when expertise research the new
product market and customers want and needs.

*An invention or innovation as a result of a gap in the current market.

*An idea to produce a product or service not currently available.

For example: iPad.

 Idea Screening

In process of screening, the ideas with the greatest potential are selected for future review. During
screening, product ideas are analyzed to determine whether they match organizational objectives and
resources. Compared with other phases, a largest number of new product ideas is rejected during the
screening phase.
* Not all ideas are good ones (i.e. New Coke, McPizza etc.)
*Markets need to test consumer reaction to their idea before they continue
* Throw the idea around and see what people think.

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 Chapter 7. Concept development
and testing

7.1 Product concept:

Product concept is a unique idea that attractive to

the consumer’s terms, creating the customer value
as well as satisfying the customers’ needs and
wants. Product concept reflect the product details to the customers. A customer doesn’t want a product idea,
they received the product concept that fulfil their valuable desired.

7.2 Concept development.

Concept development means implementing product idea with alternative idea.

Concept development refers to develop the new product into alternative product concept which introduce a
product with more affordable as well as creates the mass market version.

The consumer needs and wants are increasing day by day. Consumers are interesting to spend their valuable
money to get their desired product which fulfill their demands. Because a consumer is influenced by a new
product. There are a lot of products are available in the present market. The consumer may or not search for
more information, if the consumers drive is strong and satisfying product he or she is likely to buy it then.

Product concept development add the extra value on product that increase the product value for the
consumers. When a customer gets their desirable product which fulfill their demand, they pay money to get
this. Concept development involves coming up with a detailed description of idea, explained from the
perspective of your customers. Concept development usually highlight the following terms of a product. It
highly influenced the customer’s needs. Sometime concept development changes the customer demands as
well as introducing with new product.

I. Convenience
II. Usability
III. Quality
IV. Functionality
V. Performance
VI. Price
VII. Values
VIII. Experience

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  Convenience: means customer normally buy frequently, immediately and without great
companion or buying effort.
 Usability: can be described as the capacity of a system to provide a condition for its users to
perform the task safety, effectively, and efficiently while enjoying the experience.
 Quality: quality is the most important factor of a product. It creates a positive attitude about the
product on the consumer mind. A customer wants to spend their money to get the quality full
product. Customer satisfaction highly depends on the product quality.
 Functionality: a product’s functionality is used by marketers to identify product features and
enables a user to have a set of capabilities. Functionality may or may not be easy to use.
 Performance: described as the response of a product to external actions in its working
environment. It is an aspect of market performance that denotes the quality and performance of
existing products and firm’s records with respect to the development of new product.
 Price: is the quantity of payments that given by one party to another in return for one unit of
goods and services.
 Values: is the benefits that customers get by using a product to satisfy her needs.
 Experience: focus on the total of the customer journey that takes place within the product itself.

Chapter 8. Concept testing

Concept testing means testing new product concept with group of target consumers. The concept may be
presented to consumer symbolically or physically.

Consumer concept testing identify the final reaction on the product. Two types of reaction arrived from
the customer when launched a final product in the market. It could be positive or negative.

Producer get valuable information about their desire product from the market. It aids to develop a new
product based on the actual demand of consumers. The more the tested concepts resemble the final
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 product or experience. Concept testing is the important opportunities to get the proper feedback from the
consumers. The producer produces their product to fulfill the consumer demands. If consumer don’t
satisfy by their desirable product, a company can’t run their business or can’t increase their wealth
maximization. As a result, they can’t get profit from their product, ultimately they become failure.

Concept testing aids the producer to get sufficient information from the market as well as helps to
determine the consumer needs and wants. After receiving information, researchers measure product
dimension by having consumer respond to the following types of question.

 Communicability and believability: when a firm creates believability to the customer on their
product then they can launch their final product in the market. You firstly make sure, are the
benefits clear to you and believable? If the scores are low, then concept must be refined.
 Need level: when a product can solve the consumer problem or can fulfill consumer demand, the
stronger need arises from the consumer.
 Gap level: there are lot of products are available in the market. When alternatives product meet
the current demand then arise gap level with customers. So think, do other product currently meet
this demand and satisfy you?
 Perceived value: is the price reasonable in relationship value? The higher the perceived value, the
higher is expected consumer interest.
 Purchase intention: it is an important factor. A firm acquire competitive advantage as well as
make profit and wealth maximization While arising high level purchase intention by the
consumer.
 Use target customer: firms should be identifying, who are the final consumer for their product?
The more creating customer, the more making profit maximization.

Chapter 9. Marketing strategy development

Marketing strategy development designing an initial marketing strategy for a new product based on the
product concept.

Marketing strategy is the goal to create value for customer and build profitable customer relationship.
The marketing strategy statement consist of three parts.

1. Describe the target market

2. The planned value proposition
3. The sales, market share and profit goal for the first few years

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  Describe the target market: in this stage management decide for whom produce their product.
In order to market your product or service, it is imperative that you tailor your marketing and sales
efforts to specifically reach the segment of population that will most likely buy your product or
service. It is critical that you first determine or clearly identify your primary market. Your energies
and funds then can be spent more efficiently. If you don’t know who your customers are, how will
you be able to assess whether you are meeting their needs? Since success depends on your being able
to meet customers’ needs and desires, you must know who your customers are, what they want,
where they live and what they can afford.

Types of Markets There are three major types of markets.

1. The consumer market

2. The industrial market.
3. The reseller market.

 The planned value proposition: Planned Value is the approved value of the work to be completed
in a given time. It is the value that you should have been earned as per the schedule. In this stage
describes the product’s planned price, distribution and marketing budget for the first year.
 The sales, market share and profit goal for the first few years: in this stage marketing strategy
statement describes the planned long run sales, profit goals and marketing mix strategy.

 Market strategy involves two key questions.

1. Which customer will be serve.

2. How will we create value for them?

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Chapter 10. Commercialization
Commercialization is a way in which introducing the
new product or production method into the market. It
is the final and most important phase of new product
development process. The company or firm most
money will have to be spent in this phase for
accomplish some activities such as advertising, sales
promotion and other marketing efforts.
Commercialization provides new products and
services that can be used to solve some of life’s most pressing problems, as well as making incremental
improvements to the quality of life for consumers and business effectiveness.

Some factors should be considered before the new product is commercialized:

 Introduction timing for instance, if the economy of the country is down it might be wise to wait
until the following year to launch the product. However, if the rivals are ready to introduce their
products, the firm should push to introduce their own product as soon as possible because of getting
'first mover advantage '.
 Introduction place The company must be deciding where to launch their new product. Should it be
a single location, a region, the national or international market? Normally companies don't have
confidence, Capital and capacity to launch new product into in nationally or internationally
distribution from the start. Instead of they choose a single one or two attractive location to distribute
their products.
 To Whom It might be target market prospects. Within the launch of a product, the company must
target initial distribution and promotion to select the best prospects group of customer. Ideally these
should be happened before the product is generate by marketing researcher of the company. The goal
of the target market prospects is to generates strong sales as soon as possible to attract further
prospects.
 How introduction new product into the market New product launch is more expensive rather than
their expected that's why many potential successful offering suffer from underfunding. In this regard,
the company should allocate sufficient time and Resources yet not to overspend. The management of
the company can use critical path scheduling(cps) to coordinate many tasks in launching new
products. Cps shows how much time to takes each activity, and what tasks will be done sequentially
etc.

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10.1 The functions of commercialization are to successfully development of new
product:

 Physical prototypes
The aim of the company’s Research and development
department is to find out a perfect prototype that embodies
the premier multiplication of new product concept
statement and which performs safely under normal use and
condition. This prototype can have produced within
predetermined budgeted of manufacturing cost. Research
and development Department must be thinking and decide
how the consumers will be reacting to several colors, size,
weights and other external attributes. The wonderful
packaging of the products can attract customer to buy it
and it creates extra value of the product. The firm should
provide a holistic overview statements which clearly states
what the product is and what it does and benefit using this
product from a customer point of view.
 Customer test

Customer test is also called the acceptance test. When the

physical prototypes are ready the firm must be carry out
customer test before the products enter into the marketplace.

It refers the process of gathering feedback directly from

potential customers about all performance of product. The
feedback can be through a formal programmer, informal
surveys or other indirectly data on online advertisements or
own website. Customer test helps the firm to ascertained the
viability of the product. Customer test is most important especially before launch the product because its
crucial to get an outside Perspective of firm's product.

 Test marketing

Test marketing involves launching the product in small part (usually geographic) part of the target
market in order to gauge the viability of a product or service in the target market prior to a main launch.
The aim of the test marketing is to improve the success of the product launch. Through test marketing, a
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 marketer may ascertain the success ratio of the new product and the marketing campaign and can design
the marketing mix very well before launch.

Chapter 11. Marketing mix such as -:

 Product itself
 Promotion level of the product
 Distribution channel
 Geographic area (place)
 Price

11.1 Types of Consumer-Goods Market Testing:

 Sales-Wave Research

Under this test, the consumer is offered the product, again and again (sales waves), free of cost. This is
done to determine the willingness and satisfaction of the customers to use the product every time it is
offered.

 Simulated Test Marketing

Under this test, 30-40 customers are selected and are invited to the store where they can buy anything.
The new products are placed with the old or competitor’s product and then consumer’s preference is
ascertained through their selection of the products. In case, the new product is not chosen by them, then
the free samples are given to the customers and are inquired telephonically about their product
experience after some weeks.

 Controlled Test Marketing

Under this test, the company select certain stores in different geographic areas and ask them to keep its
new product into their stores in return for a fee. The company controls the shelf position, displays, point
of purchase promotions and pricing.

 Test Markets

Under this, the firm chooses the representative cities where the full-fledged launch of the new product is
done starting from the promotion campaign to the ultimate sales. Once it is successful, the firm goes for
the national launch.

 The Launch
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 The launch of a new product is truly the beginning of the implementation of a sustained marketing plan.
Marketing plan is a plan that will be analyzed, evaluated, and adjusted throughout the product life cycle.
There certain marketing techniques that figure more prominently during the launch phase.

 Press Strategies

Often companies issue press releases about new products in order to increase visibility through gained
media. The press release can be sent to targeted press outlets, posted on the company Web site, sent as
an information message to customers, and distributed to industry influencers. The goal of the press
strategy is to build broad visibility for the product, backed up by the credibility of the media outlet.

 Price Discounts

Companies will sometimes offer a price discount during a product launch to capture or grab the market.
In generally customers is unwilling to buy new products without any offer or discount that's why
company offering some discount of new products to retain their potential customer.

 Channel Partner Incentives

If the company depends on a partner to sell or distribute the pricing, it might choose to offer pricing
discounts and incentives to the distribution partner. A new product carries some risk, and an incentive at
launch can encourage channel partners that might be reluctant to add the new product or to sell it
aggressively

Chapter 12: The consumer Adaption process

Adoption is making consumer loyal enough to buy the same product again and again.
In previous days, new-product marketers used a mass market approach to launch a new product which
causes heavy marketing expenditure and wasted many exposers.
So, now a day, new-product marketers use heavy-users target marketing approach in which heavy users are
identifiable and are early adopters. Some heavy users are loyal to existing brand. So new-product marketers
target the early adopters through the theory of innovation diffusion and consumer adoption.
Stages in the Adoption Process:
Innovation is something that someone hasn't experience before. It could be a product, a service or idea.
People take time to adopt innovation.
Everettee Rogers defines the innovation diffusion process as " the spread of a new idea from its source of
invention to its final users or adopters".
Consumer adoption process is the integration of some mental factors which is to be considered by the
consumer after hearing about an innovation to finally adopt the innovation
Adopters of new product move through five stages:
1. Awareness: the consumers get informed about the innovation but lack information about it.
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2 Interest: the consumer starts to seek more information about the innovation
3. Evaluation: the consumer starts thinking about the innovation.
4. Trial: the consumer starts using the innovation to estimate its value.
5: Adoption: the consumer decides to be loyal and buy the innovation again and again

The new-product marketers should make these stages easy for consumers. For example:
Many consumers may know about 'Food panda'. They are also interested but they are afraid of getting poor
services. So Food panda offers free delivery and up to 75% discount on first order to facilitate the trial stage.

12.1 Factors Influencing the Adoption Process:

Researchers have found some factors that influence the adoption process. These factors are:
1. Readiness to Try New Products;
2 Personal Influence;
3. Rates of adoption;
4. Organization Readiness to Try New Products
These factors are described below:
12.1.1. Readiness to Try New Products:
A person’s innovativeness depends on how fast he/she adopts a new idea than the other members of his
social system. Behind every innovation there are pioneers and early adopters are the first to use innovation.
Based on the innovativeness we can categorize the consumers into five adopter’s groups.

Figure: Time of adoption of innovation

a) Innovators: innovators are the most curious type of person. They enjoy experiment and mastering their
intricacies. They are the first to test the innovation and report on early weaknesses.
b) Early Adopters: Early adopters are the most optimistic persons. They carefully search for new innovation
that might give them a heavy competitive advantage. They are less price sensitive and willing to adopt the
product if given personalized solutions and service support. Example:
From 1990's to 1996'' there were not more than 500 people who used internet to get competitive advantages.
They are the early adopters of internet.

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c) Early Majority: Early majority are very conscious type of persons. They adopt innovation when its
benefits are proven and a huge adoption has already taken place. Example: people accepting online business
right now.
d) Late majority: they are suspicious conservatives, risk adverse, technology shy and price sensitive like
people who are ignoring online business right now.
e) Laggards: Laggards are tradition-bound and resist the innovation until they find the status quo is no
longer defensible. Example: people who never believe in education but at their middle age they receive mass
education.
Different type of marketing approach should be selected for each group if the marketers want to move its
innovation through the full product life cycle
12.1.2. Personal Influence:
A person can influence the purchase probability of another person. Early adopters influence the next group
early majority. One persons' experience is a review for another person. It has more significance in evaluation
stage than other stages. It has more influence on late adopters than early adopters.
12.1.3. Rate of adoption:
Some product may have higher rate of early adoption; some may have late majority. Five characteristics
influence the rate of adoption of an innovation. These are describing below:
a) Relative advantage: Comparatively high advantage than the same existing product. The greater the
advantage, the more quickly the innovation will be adopted. Example: The use of telephone has almost gone
after the introduction of mobile phone because of relative advantage
b) compatibility: the degree to which the innovation matches the values and experience of the individuals.
Example: iPhone has a huge market in Europe but could not make a convenience place in Asia.
c) Complexity: The degree to which the innovation is relatively difficult to understand and use. Example:
Between windows and android phone, android is more preferable because android is relatively easy to use.
d) Divisibility: the degree to which the innovation can be tried on a limited basis. People want trial before
adopting. Example: Mini-pack shampoo increased the rate of adoption of shampoo.
e) Communicability: The faster the beneficial results of using an innovation spreads, the more the adoption
rates increases. Example: Online business is growing very faster because of review system in website and
social media community.
Other characteristics that influence the rate of adoption are cost, risk and uncertainty, scientific credibility
band social approval.

12.1.4) Organizations' Readiness to Adopt Innovations:

An organization must have the ability to go through the stages of adoption process. They need to consider
their size, profit and the community in which they are going to launch an innovation. They must have legacy
and the support of the government. They must consider the standard of living of the targeted consumers.

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 Conclusion:

Once a company has segmented the market, chosen its target customer groups and identified their needs,
and determined its desired positioning, it is ready to develop and launch appropriate new products and
services. Marketing should participate with other departments in every stage of new-product
development.

Successful new-product development requires the company to establish an effective organization for
managing the development process. Companies can choose to use product managers, new-product
managers, new-product committees, new-product departments, or new-product venture teams.
Increasingly, companies are adopting cross-functional teams, connecting to individuals and
organizations outside the company, and developing multiple product concepts.

Eight stages take place in the new-product development process: idea generation, screening, concept
development and testing, marketing strategy development, business analysis, product development,
market testing, and commercialization. At each stage, the company must determine whether the idea
should be dropped or moved to the next stage.

The consumer-adoption process is the process by which customers learn about new products, try them,
and adopt or reject them. Today, many marketers are targeting heavy users and early adopters of new
products, because both groups can be reached by specific media and tend to be opinion leaders. The
consumer-adoption process is influenced by many factors beyond the marketer’s control, including
consumers’ and organizations’ willingness to try new products, personal influences, and the
characteristics of the new product or innovation.

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