The Adoption Process


The adoption process consists of the mental stages an individual goes through in accepting and becoming a repeat purchaser of an innovation. Marketing communicators play a role in accelerating the rate of new product adoption and thereby increasing the probability of product success. As firms have become more sophisticated marketers, the rate of adoption in consumer markets has increased.

Although consumers are accepting new products more readily than ever, there is still a high percentage of failure in the introduction of new products. Understanding the factors that facilitate or impede successful adoption is crucial to a full appreciation of the role of marketing communications and promotion management in modern marketing.

The adoption process consists of five stages: 1) knowledge, 2) persuasion, 3) decision, 4) implementation, and 5) confirmation. Each stage is necessary precondition to a subsequent stage. Various conditions and characteristics act to increase or retard the innovation-decision process. Among the broad groups of variables that influence the various stages are prior conditions (e.g., the consumer’s previous consumption practices), characteristics of the decision-making unit (e.g., socio-economic characteristics), and perceived characteristics of the innovation (e.g., relative advantages).

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

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Degrees of Uncertainty


Statistical decision theory is based on the idea that a manager may face three degrees of uncertainty in making a decision. Some decisions are made under conditions of certainty. Here, the manager knows in advance the outcome of decision. At the opposite extreme, some decisions are made under conditions of uncertainty. Here, the manager cannot even assign probabilities to the likelihood of the various outcomes. Conditions of complete uncertainty are also relatively infrequent. Most management decisions are made under conditions of risk. Under conditions of risk, the manager can at least assign probabilities to each outcome. In other words, the manager knows (either from past experience or by making an educated guess) the chance that each possible outcome will occur.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Statistical Analyses


The role of database is to help select names for modeling, implement the results of the modeling process by scoring names and assigning them to the appropriate decile, and selecting names by decile and other criteria for marketing programs. Most companies use statistical analysis for two principal reasons: a) segmentation, and b) predictive modeling.

Segmentation techniques are used to identify and profile groups of customers whose characteristics are similar. If the objective is to segment customers based on their performance, then the procedure is to group people according to their performance characteristics and then develop profiles of each performance group. Typical segmentation variables are performance measures such as recency, frequency, and monetary value of purchases; types of products purchased; or types of promotions responded to.

By linking this data with customer performance data, marketers can analyze who buys what and use the profiles of customers in each segment as a means of finding other customers like them.

Once the segments have been created, individual customers will be assigned to segments and these assignments will be recorded in the database. This makes subsequent selection of individuals for promotion based on the segmentation criteria relatively simple.

Predictive Modeling, based on previous purchase history, based on recency, frequency, and monetary value, models can be developed to predict who is most likely and least likely to purchase at the next opportunity. This scoring model would be used to determine who should be promoted and what they should be promoted with.

Once scoring models have been executed and customers assigned to deciles, this information is recorded in the database so that subsequent selection of customers who have the highest probability of responding to a promotion is easily accomplished.

End users would use a selection menu in which they would indicate which scoring model they wish to use and either a specific cutoff score or a desired number of names to select. The database would then perform the selection and produce an output file to the specific medium. This would either be a file, a magnetic tape, or mailing labels. A file could either be used for further analysis, or in many cases, the file could be combined with a patterned letter file to produce personalized mailings.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Venture Capital


In starting a business you can use the help of family, friends, and children. You can use the garage and the basement of quarters. You can borrow furniture and equipment. But after all the resources of family and friends have been obtained, there is still the need for some hard cold cash. It takes a little money to pay for things like raw materials, telephone, postage, letterhead stationery, and possibly some salaries and wages. This start-up money is sometimes referred to as seed money. It may be the most venturesome kind of venture capital.

To improve the probability of success in starting a new business, it takes the right kind of person with the right kind of business concept. More than that, the person should be a particular point along the career path and the business concept should be timely in the context of perceived consumer values as well as current technology. Even with the right person at the right time, and the right business concept at the right time, there is still the need for venture capital to give the new business a chance to win in the marketplace competition.

Venture capital is liquid assets invested in an unproven business. Money placed with a proven business enterprise for its prudent use can be thought of as invested capital. Money placed with any other business enterprise is at risk to a greater or lesser degree and can be thought of as venture capital. There are few enough proven business, and it is easier to identify and describe one of them than it is to try and describe one of the many, many unproven businesses.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Planning for Uncertainty


Uncertainty has become so great as to render futile, if not counterproductive, the kind of planning most companies still practice: forecasting based on probabilities.

Unique events have no probability. Yet executives have to make decisions that commit to the future current resources of time and money. Worse, they have to make decisions not to commit resources—to forgo the future. The lengths of such commitments are steadily growing: in strategy and technology, marketing, manufacturing, employee development, in the time it takes to bring a new plant on steam or in the years until a commitment to a store location pays for itself. Every such commitment is based on assumptions about the future. To arrive at them, traditional planning asks, “what is most likely to happen?” Planning for uncertainty asks instead, “What has already happened that will create the future?”

The first place to look is in demographics. There have been two revolutionary changes in the workforce of developed countries: the explosion of advanced education and the rush of women into careers outside the home. Both are accomplished facts. The shift from blue-collar labor to knowledge and service workers as the centers of population gravity is irrevocable. But so is the aging of both the workforce and population.

Business people need to ask: “What do these accomplished facts mean for our business? What opportunities do they create? What threats? What changes do they demand in the ways the business is organized and run, in our goals, in our products, in our services, in our policies? And what changes do they make possible and likely to be advantageous?”

The next question is: “What changes in industry and market structure, in basic values (e.g., the emphasis on the environment), and in science and technology have already occurred but have yet to have full impact?” It is commonly believed that innovations create changes—but very few do. Successful innovations exploit changes that have already happened. They exploit the time lag—in science, often twenty-five or thirty years—between the change itself and its perception and acceptance. During that time the exploiter of the change rarely faces much, if any, competition. The other people in the industry still operate on the basis of yesterday’s reality. And once such a change has happened, it usually survives even extreme turbulence.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Decision Tree


Probably the best known of all decision-making tools, a decision tree is a graphic representation of the options flowing from an initial decision or set of decisions. It is used to map out alternative courses of action and assess the implications of suh decisions. Probabilities (otherwise known as educated guesses) are assigned to the livelihood of the consequences that each decision is expected to generate.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Carrying out Sales Contests


Sales contests are short-term incentive programs designed to motivate sales personnel to accomplish specific sales objectives. Although contests should not be considered part of the firm’s ongoing compensation plan, they offer sales people the opportunity to gain financial, as well as nonfinancial, rewards. Contest winners often receive prizes in cash or merchandise or travel. Winners also receive nonfinancial rewards in the form of recognition and a sense of accomplishment.

Successful contests require the following:

  • Clearly defined, specific objectives.
  • An exciting theme.
  • Reasonable probability of rewards for all salespeople.
  • Attractive rewards.
  • Promotion and follow-through.

Because contests supplement the firm’s compensation program and are designed to motivate extra effort toward some short-term goal, their objectives should be very specific and clearly defined.

The time in which the contest’s objectives are to be achieved should be relatively short. This ensures the salespeople will maintain their enthusiasm and effort throughout the contest. But the contest should be long enough to allow all members of the sales force to cover their territories at least once and to have a reasonable chance of generating the performance necessary to win. Therefore, the median duration of sales contests is three months.

A sales contest should have an exciting theme to help build enthusiasm among the participants and promote the event. The theme should also be designed to stress the contest’s objectives and appeal to all participants.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

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