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Rogers’ curve is shaped as a standard normal curve, and has a phase of growth and of decline. The five
categories of adopters in highlights are:
Innovators, who are eager to try new ideas; since they’re interested in being the first owners of a
new technological product, they’re often price insensitive. They’re usually risk-takers, wealthier than
the average and generally young.
Early adopters are not interested in technology for its own sake, but they can detect the value of a
new product and how it will enhance their lives or their businesses; this group is critical in making a
new technologically based product successful.
Early majority; these buyers are interested in new technologies, but take a wait-and-see attitude to
determine if the product is worthy. It’s a large group and it’s necessary to attract them for the
product to be commercially viable.
Late majority adopters are similar to the early majority, but are much more conservative in terms of
how much of an industry infrastructure must be built before they’ll buy.
Laggards are often not interested in new technologies, sceptic approach.
If a brand had to choose, the preferable shape of a Rogers curve is the steepest and shortest, since it
expresses a very fast diffusion of the product: the brand knows anything about the potential repeat purchases,
so being fast to spread the product means high initial cashflow). What’s important is that the Rogers curve
tells nothing about the product life-cycle or
repeated purchases: it simply represents the
time needed for a product to become
widespread.
We can compare the Rogers curve to the PLC
curve, and notice that even after the peak of
the Rogers curve, the PLC still is in growth
phase. The area between the PLC and the
Rogers curve represents purchases made by
those who already purchased the product once,
namely, repeated purchases. If the PLC
follows the shape of the Rogers curve, it’s a
complete failure for the new product, because
it means that those who once purchased the
product weren’t satisfied with it and decided
not to re-purchase.
Theoretical Product Life-Cycle.
The theoretical PLC curve divides the life-cycle of a product in four different stages, with own
characteristics: they’re fundamental for market analysis and marketing strategy, since strategies adopted by
the firms must be consistent with the phase of the PLC in which they’re adopted.
1. In the introduction phase the growth rate is at its maximum, while the size of the market is still low.
The company has very few information about potential market and market shares, since the market
itself still is not well defined: usually there’s one company, the pioneer, which developed the
product; if he’s effective in building demand (or the category appears attractive to other companies),
the number of competitors will increase, as the size of the market. Normally, this is a phase of
hardship for the pioneer, because of the huge investments needed to develop the product, which
cause negative profits. Since the number of competitors is low and the market is still growing, there
are low entry barriers.
2. Eventually, the market reaches its growth phase: during this phase the market still grows quickly;
potential market is still not definable, and the market shares are more or less equally distributed
among competitors and they start to become more stable. In this phase the number of competitors is
at its maximum, since many see the potential of high profits and try to enter in a still unstructured
market: this means fierce competition for market shares. Moreover, company usually gained some
experience and volume of sales increased, so that they can achieve economies of scale or experience
curves, lowering costs and increasing profits.
3. When market growth becomes steady, the product reaches its maturity phase: the potential market is
now low, and market shares are concentrated among the largest competitors, since during the growth
phase small firms and competitors left the market. Market share consequently become more stable,
even if competitors try to steal market shares from each other. Profits are stable, but may be quite
high, depending on cost function of each firm (even if in average are lower than in previous phases).
Entry barriers are high.
4. At some point (variable in time), the market slows down and the decline phase starts: instead of
growing the market decreases, and potential market is very small. Market shares become more and
more concentrated and volatile, since weaker firms leave the market due to decreasing sales,
consequently, also number of competitors decreases. Due to lower volume of sales, profits decrease.
The entry barrier concept no longer makes sense, since there are no incentives to enter in a low-
income market.
The PLC is however a theoretical model, because often categories do not follow perfectly the pattern, and
the curve may go through several cycles (frequently when aggressive promotions give a push) or scalloped
patterns (frequent in cases of new generations of the product, as happens with iPhones).
III. Perceived quality / Brand-based differentiation. Many products and services differentiate
themselves from competitors by doing a better job of giving customers the perception that they
are of higher overall quality or better on particular product characteristic. Perceptual differential
advantages are often used when actual product differences are small, hard to achieve or difficult
to sustain.
Perceptual differential advantages can be conveyed using all elements of the marketing mix:
high price can communicate high quality, advertising can be used as a vehicle for delivering
images and feelings, and exclusive distribution channels to provide customers with the feeling
that the product is rare and expensive. The dimension of a perceptual differential advantage are
the same as for an actual one: we can refer, again, to Porter’s value chain. The main difference
between this approach to competitive advantage and that based on actual quality is that in this
case the claims are more difficult for customers to verify.
An important tool in understanding how your brand or product is perceived is marketing
research that measures customers’ perceptions of your product on a variety of attributes; this
kind of research is then conceptualized in a perceptual map, which provides information about
how the brand is perceived on attributes that customers consider important in choosing among
competitors. However, the map gives you information about perceptions of your brand relative
to competitors, or the brand positions (customers are often asked to provide ratings).
One of the key ways to define a perceptual differential advantage is through the brand name: the
value of a brand name (reputation) is communicating quality or other aspects of the products is
called brand equity. Brand names by themselves are powerful communicators of product quality
that form an important part of the product’s differential advantage.
Another core strategy issue is product positioning, which is basically the process of putting in practice
the value proposition and competitive advantages; in order to perform it, we need to know dimensions
customers use to evaluate product offerings, and how important these dimensions are in the decision
process, and what decision process customers do actually use. Positioning, often, involves both actual
and perceived differential advantages. Re-positioning occurs when the manager is dissatisfied with the
current positioning and seeks a new perceived advantage, which might be difficult if the product has a
high awareness level of the former image.
5. Marketing mix, which is the set of decisions about price, channels of distribution, product,
communications and customer relationship management that implements the marketing strategy; often
referred to as the “4Ps” (price, place, promotion, product). So the marketing mix is the implementation
stage of the strategy, which obviously must be consistent with the strategy: a high quality proposition
must be implemented with the appropriate channels of distribution, advertising, product features, a
commensurate price, and customer service and other relationship activities consistent with the desired
image.