The Product Diffusion Curve is a useful model that helps you think about who you should be targeting at different stages of the life of your product or service.
With an understanding of the Product Diffusion Curve, you can target your marketing efforts intelligently, getting the best returns from your effort. More than this, you can maximize the chances of success for your product, for example, by pinpointing the most influential target clients right at the start of your marketing effort.
The Product Diffusion Curve model uses a bell-shaped curve or an s-shaped curve to show the stages in which a successful product is adopted by people within your market.
The curve is shown below:
People within the market are represented depending on how quickly they accept and purchase new products. Some welcome novelty, adopting new products as soon as they come to market. Others only purchase new products only when it becomes the last resort.
According to the model, five different groups of people will purchase your product at different stages of the product’s life
What’s the best way to introduce a new product, or change an existing one? You could just move forward boldly with a new idea and keep your fingers crossed that it works. Or you could reduce risk by doing market research – before you go through all the trouble of creating something customers don’t want or don’t like.
Getting a product ‘right’ involves a lot of variables. The most obvious feature is functionality – how it works. However, other things also play a role in the final purchase decision – such as packaging, promotion, materials, and even where a product is manufactured.
For example, people buy cars to get from point A to point B. The type of car they buy is based on many things, including fuel consumption, styling, reliability, and color. While any of these product attributes may be the primary selling feature, people make decisions by considering all the attributes together.
Getting all of these features in the right combination is pretty difficult if you just rely on guesswork. So, how can you evaluate your goods and services by considering their attributes all together, or jointly? ‘Conjoint Analysis’ accomplishes exactly that.
First and foremost, conjoint analysis is a tool that measures buyer preferences. Using statistical analysis, it establishes the impact on the buying decision of one combination of product attributes compared with other combinations. By doing this, you get an understanding of consumer preferences that’s much deeper than simply asking consumers to rate individual product attributes.
For instance, a typical preferences survey tells a restaurant that customers rank their priorities as service, price, location, and then cleanliness. So the restaurant makes improvements to service and price, but sales don’t increase significantly. They wonder what went wrong… until they try a conjoint analysis, which tells them that the combination of service and location actually ranks higher than the combination of service and price.
Conjoint analysis helps you truly understand consumer trade-offs. What are customers willing to trade if they can’t get the perfect set of attributes? To get the warranty they want, will they pay a higher purchase price? To get the 10% discount they want, will they buy a package of eight, rather than a package of six? To get the performance they want, will they settle for fewer color options?
Conjoint analysis determines the utility (usefulness or desirability) values that consumers attach to different levels of a product’s attributes. By showing potential consumers different product offer combinations, and asking them to rank the various offers, you can identify the most appealing combination of attributes. From there, you can make a business decision using parameters like estimated market share and profit potential
Kano Model Analysis is a useful technique for deciding which features you want to include in a product or service.
It helps you break away from a profit-minimizing mindset that says you’ve got to have as many features as possible in a product, and helps you think more subtly about the features you include. This can be the difference between a product or service being profitable or unprofitable.
More than this, it helps you develop a product that will truly delight your customers.
According to the Kano Model (developed by Dr Noriaki Kano in the 1980s), a product or service can have three types of attribute (or property):
Threshold Attributes affect customers’ satisfaction with the product or service by their absence: If they’re not present, customers are dissatisfied. And even if they’re present, if no other attributes are present, customers aren’t particularly happy (you can see this as the bottom curve on the graph below).
Figure 1 – The Kano Model
Using the example of a cell phone, the ability to store people’s names and telephone numbers is a Threshold Attribute. While a cell phone without this function would work, it would be grossly inconvenient.
It’s on Performance Attributes that most products compete. When we weigh up one product against another, and decide what price we’re prepared to pay, we’re comparing Performance Attributes. These are shown as the middle line on the graph.
On a cell phone, Performance Attributes might be polyphonic ringtones or cameras (although to a teenager, polyphonic ringtones may be Threshold Attributes!)
Excitement Attributes are things that people don’t really expect, but which delight them. These are shown as the top curve on the graph above. Even if only a few Performance Attributes are present, the presence of an excitement attribute will lead to high customer satisfaction.
For the right person (and at the time of writing!), a free Bluetooth headset might be an Excitement Attribute on a cell phone.
(There’s also a fourth type of attribute: Things customers don’t care about at all.)
To use Kano Model Analysis, follow these steps:
Where possible, get your customers to do the classification for you. Partly this will keep you close to your market, but partly it will keep you and even the most out-of-touch people in your company up-to-date with people’s changing expectations.
Using the example above, only a few years ago, polyphonic ring tones (and even phone number lists!) were Excitement Attributes on cell phones.
Also, make sure when you choose customers, that you choose customers who are typical of the market you want to sell to
How to use the 4Ps,
with James Manktelow & Amy Carlson.
What is marketing? The definition that many marketers learn as they start out in the industry is:
Putting the right product in the right place, at the right price, at the right time.
It’s simple! You just need to create a product that a particular group of people want, put it on sale some place that those same people visit regularly, and price it at a level which matches the value they feel they get out of it; and do all that at a time they want to buy. Then you’ve got it made!
There’s a lot of truth in this idea. However, a lot of hard work needs to go into finding out what customers want, and identifying where they do their shopping. Then you need to figure out how to produce the item at a price that represents value to them, and get it all to come together at the critical time.
But if you get just one element wrong, it can spell disaster. You could be left promoting a car with amazing fuel-economy in a country where fuel is very cheap; or publishing a textbook after the start of the new school year, or selling an item at a price that’s too high – or too low – to attract the people you’re targeting.
The marketing mix is a good place to start when you are thinking through your plans for a product or service, and it helps you avoid these kinds of mistakes.
The marketing mix and the 4 Ps of marketing are often used as synonyms for each other. In fact, they are not necessarily the same thing.
“Marketing mix” is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. The 4 Ps is one way – probably the best-known way – of defining the marketing mix, and was first expressed in 1960 by E J McCarthy.
The 4Ps are:
A good way to understand the 4 Ps is by the questions that you need to ask to define you marketing mix. Here are some questions that will help you understand and define each of the four elements:
The 4Ps model is just one of many marketing mix lists that have been developed over the years. And, whilst the questions we have listed above are key, they are just a subset of the detailed probing that may be required to optimize your marketing mix.
Amongst the other marketing mix models have been developed over the years is Boom and Bitner’s 7Ps, sometimes called the extended marketing mix, which include the first 4 Ps, plus people, processes and physical layout decisions.
Another marketing mix approach is Lauterborn’s 4Cs, which presents the elements of the marketing mix from the buyer’s, rather than the seller’s, perspective. It is made up of Customer needs and wants (the equivalent of product), Cost (price), Convenience (place) and Communication (promotion). In this article, we focus on the 4Ps model as it is the most well-recognized, and contains the core elements of a good marketing mix.
The marketing mix model can be used to help you decide how to take a new offer to market. It can also be used to test your existing marketing strategy. Whether you are considering a new or existing offer, follow the steps below help you define and improve your marketing mix.
Check through your answers to make sure they are based on sound knowledge and facts. If there are doubts about your assumptions, identify any market research, or facts and figures that you may need to gather.
The marketing mix helps you define the marketing elements for successfully positioning your market offer.
One of the best known models is the Four Ps, which helps you define your marketing options in terms of product, place, price and promotion. Use the model when you are planning a new venture, or evaluating an existing offer, to optimize the impact with your target market